Breach of Immigration Rules and the Illegality defence

It fell to the EAT in the recent case of Okedina v Chikale to consider whether a Respondent employer could rely on the defence of illegality in circumstances where the Claimant employee was working in breach of Immigration Rules.

Miss Chikale, a Malawian national, came to the UK in 2013 to work for Mrs Okedina as a domestic worker.  Her immigration status meant that after 6 months she was working illegally.  When her employment ended in June 2015 she brought claims including unfair and wrongful dismissal against Mrs Okedina, who sought to argue that the claims must fail because the employment contract was in breach of immigration law and was thus unenforceable.  The ET rejected this argument on the basis that Miss Chikale did not knowingly participate in the illegal performance of her contract, knowledge being one of three potential reasons identified in Hall v Woolston Hall Leisure Ltd  as to why a contract would be unlawful and consequently unenforceable.

Mrs Okedina appealed on the basis that the contract of employment was unlawful when it was formed because its effect was either expressly or implicitly prohibited by statute, such prohibition being an alternative cause of illegality identified in Hall.  The EAT rejected the appeal, finding that the contract itself did not breach immigration law because even though it did not expressly limit Ms Chikale’s employment to 6 months, it did provide for termination of employment by either party with 6 weeks’ notice.  The EAT further found that despite the Immigration Asylum and Nationality Act 2006 providing for a potential criminal offence on the part of the employer, breach of that Act does not automatically invalidate a contract entered into by the employer.

Comment:      This case serves as a warning to employers who may seek to avoid their duty to dismiss fairly, even in circumstances where the employee being dismissed is working illegally.  Employers should also note that employing illegal workers could potentially result in criminal sanctions including fines and/or imprisonment.