LEGAL CORNER: Court decides illegal worker is entitled to compensation after suffering discrimination and dismissal

29th Aug 2014

In June 2012 (Issue 278) I wrote about the Court of Appeal’s decision in Hounga v Allen. Mrs Allen held dual British and Nigerian nationality and her family lived in Nigeria. Ms Hounga (who was around 14 at the time) worked for Mrs Allen’s mother and brother in Nigeria. She was offered the chance to come to the UK to work for Mrs Allen and provide her with housekeeping and childcare assistance in exchange for £50 per month. She did not, however, have the right to work in the UK. She was therefore persuaded by Mrs Allen and her mother to dishonestly assert to a judge in Nigeria that she was a relative of Mrs Allen and provide a false name; this name was then used to obtain a passport for Ms Hounga. She then entered the UK on a six-month visitor’s visa, under which she had no right to work, telling immigration officials that she had come to visit her ‘grandmother’.

Ms Hounga worked for Mr and Mrs Allen for approximately 18 months. The Employment Tribunal, which initially heard her case, accepted that during that time she was subjected to serious physical abuse by Mrs Allen. She was subsequently thrown out of their home and dismissed.

Ms Hounga presented claims of unfair dismissal, unlawful deductions from wages, and holiday pay to the Employment Tribunal. She also brought claims of race discrimination arising out of her treatment during her employment and race discrimination arising out her dismissal. The Employment Tribunal found that the employment relationship between Ms Hounga and Mr and Mrs Allen was illegal. They also found that Ms Hounga, despite her age and her lack of education, was complicit in that illegality in that she knew that lying to a judge and changing her name in order to obtain a visa was wrong. She also knew that she was not allowed to work in the UK. Therefore, the Employment Tribunal held on public policy grounds that claims which were founded on an illegal contract of employment could not succeed. Ms Hounga was therefore unsuccessful in her claims for unfair dismissal, unlawful deductions of wages and holiday pay.

However, the Employment Tribunal did go on to find that Ms Hounga was entitled to compensation for the discrimination she had suffered and made an award in her favour. This decision was upheld by the Employment Appeal Tribunal, but, as I set out previously, overturned by the Court of Appeal on the basis that Ms Hounga had been a willing participant in the illegal contract and there was a direct link between her illegal conduct and her discrimination claim such that she should not be allowed to benefit from it.

Ms Hounga appealed to the Supreme Court and they gave their decision on July 30, 2014: [2014] UKSC 47. The Supreme Court overturned the Court of Appeal’s decision for two main reasons. First, they found that Ms Hounga and Mrs Allen were not equal participants in the illegal contract and it was clear that Mrs Allen bore the greater responsibility. It would be most unfair for her to have played the greater role in creating the situation whereby the discrimination occurred, and then to prevent Ms Hounga from succeeding because of her actions.

The defence of ‘illegality’ is one based on public policy – you should not be able to benefit from your own illegal actions. In this case, the Supreme Court held that compensating Ms Hounga did not mean she benefitted from her illegal conduct since the damages related to the discrimination she had suffered. Moreover, compensating her would not compromise the integrity of the legal system by appearing to encourage those in her situation to enter into illegal contracts of employment. Conversely, there was the possibility that applying the illegality defence to this case might encourage those in the situation of Mrs Allen to enter into illegal contracts of employment since it might engender a belief that they could even discriminate against such employees with impunity.

The Supreme Court therefore reinstated the tribunal’s award of compensation to Ms Hounga for the discrimination she had sustained.

It should be borne in mind that this case does not provide full protection to those individuals who are complicit in illegal contracts since Ms Hounga was not entitled to compensation for wages and unfair dismissal. However, it does draw the distinction between claims arising out of the illegal contract, which will not succeed, and claims separate to the contract, such as those of discrimination, which may succeed.

Safia Tharoo, 42 Bedford Row, London

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