Illegal contracts of employment

14 August 2019

Employers who are found to be employing workers without the right to work in the UK can face a fine of up to £20,000 per illegal worker and, in the most serious of cases, criminal prosecution. It is therefore incumbent upon every employer to carry out right to work checks before employment starts and to make further checks for any employee whose right to work in the UK is time limited.

What should an employer do if they subsequently discover that an employee does not have the right to work in the UK or that their right to work in the UK has expired? In such a situation, it is vital that an employer takes immediate steps to investigate the employee’s immigration status. If an employee cannot demonstrate that they have the right to work in the UK, the employer may have to terminate the employee’s employment. The question arises as to the reason for dismissal.

In the recent case of Okedina v Chikale, the employer, Mrs Okedina, argued that because of the employee’s illegal immigration status, the contract of employment was unenforceable.

Ms Chikale was a domestic servant working for Mrs Okedina and her husband. She arrived in the UK in July 2013 under a six-month domestic worker visa. Mrs Okedina retained Ms Chikale’s passport and, at the time of expiry in November 2013, told her that she was taking the necessary steps to apply for an extension. She did so, providing false information and forging Ms Chikale’s signature. The application was refused and, in January 2015, an appeal was unsuccessful. Some six months’ later, Ms Chikale was dismissed. She brought a number of claims in the Employment Tribunal, including unfair dismissal, breach of the Working Time Regulations, failure to pay National Minimum Wage and race discrimination.

Mrs Okedina argued that Ms Chikale was not able to bring her claims because of her immigration status. She argued that the contract of employment was illegal from the date on which Ms Chikale’s right to work in the UK had expired, and was therefore unenforceable. The Court of Appeal did not accept that argument. When looking at the relevant sections of the Immigration, Asylum and Nationality Act 2006, the Court noted that there was no provision that said that a person without the appropriate immigration status may not be a party to a contract of employment and, further than that, no provision that said that any such contract was unenforceable. There was also no common law illegality, since Mrs Okedina had known about, and participated in, Ms Chikale’s illegal immigration status.

Where the employee in question has two years’ service, it falls on the employer to establish a potentially fair reason for dismissal under section 98 of the Employment Rights Act 1996 in order to avoid an allegation of unfair dismissal. An employer will typically rely on section 98(2)(d), which covers a situation where an employee cannot continue to work in the position they hold without contravention (either on their part or on that of their employer) of a legal duty or restriction. In the alternative, an employer may rely on ‘some other substantial reason’ under section 98(1)(b).

The employer must also ensure that they act reasonably in dismissing the employee. We have previously reported the case of Afzal v East London Pizza Ltd (t/a Dominos Pizza) in which it was noted that it is important to offer the right to appeal in immigration status dismissal cases. Adopting a proper dismissal procedure is important in these cases.

By Michelle Tudor

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