Hounga v Allen and another

The illegality defence does not automatically bar a statutory discrimination claim arising from unlawful employment. In tort, the claimant’s illegality must be sufficiently closely connected with the claim that granting relief would compromise the integrity and consistency of the legal system.

The court must also consider countervailing public policies. Where unlawful immigration merely provides the context for discriminatory dismissal, compensation for injury to feelings neither rewards the illegality nor evades a criminal penalty. Strong public policy against trafficking and in favour of protecting its victims may require the illegality defence to give way.

Hounga v Allen and another concerned a Nigerian girl who entered the United Kingdom at about 14 years of age under a false identity and without permission to work. Mrs Allen employed her as a domestic worker, paid her no wages and subjected her to serious physical abuse and threats. She eventually dismissed her by violently evicting her from the home.

The Employment Tribunal dismissed the contractual claims for illegality but upheld the complaint of racially discriminatory dismissal under section 4(2)(c) of the Race Relations Act 1976. The Employment Appeal Tribunal upheld that award. The Court of Appeal set it aside because the discrimination complaint was inextricably linked with the illegal employment: [2012] EWCA Civ 609, [2012] IRLR 685.

The central issue was whether the illegality defence defeated the statutory tort claim for discriminatory dismissal.

1. Disposition. The Supreme Court unanimously allowed the appeal. The Employment Tribunal’s award of £6,187 for injury to feelings was restored. The complaint of pre-dismissal harassment on grounds of race or ethnic or national origins was remitted to the tribunal to determine the grievance-procedure issue and, if appropriate, the merits.

2. Connection between illegality and the tort. Lord Wilson, with whom Lady Hale and Lord Kerr agreed, held that the unlawful contract supplied only the context in which the physical, verbal and emotional abuse constituting the discriminatory dismissal occurred. It was not inextricably linked with that tort. The claimant did not seek to enforce the illegal contract but to obtain compensation for a distinct statutory wrong. The decisions in Cross v Kirkby [2000] EWCA Civ 426 and Hall v Woolston Hall Leisure Ltd [2001] ICR 99 supported the requirement for a close connection. Vakante v Governing Body of Addey and Stanhope School (No 2) [2004] EWCA Civ 1065 was materially different because the employee’s deception was central to obtaining employment from an innocent employer.

3. Public policy. Lord Wilson held that the defence rests on public policy and requires consideration both of the policy supporting the defence and of any policy which its application would affront. Compensation for discriminatory injury to feelings did not permit the claimant to profit from her immigration offences, evade a criminal penalty or encourage illegal employment. Refusing relief might instead encourage employers to discriminate against workers with irregular immigration status with impunity.

4. Trafficking and international obligations. Lord Wilson considered the case to be trafficking within the accepted international definition or so close to trafficking that the distinction was immaterial. The public policy against trafficking and in favour of protecting victims strongly opposed the defence. Article 15(3) of the Council of Europe Convention on Action against Trafficking in Human Beings required domestic provision for victims to obtain compensation from perpetrators. Applying the illegality defence would run counter to that obligation and to the protection afforded by article 4 of the European Convention on Human Rights.

5. Concurring reasons. Lord Hughes, with whom Lord Carnwath agreed, reached the same result because the immigration offences merely supplied the setting for the tort and lacked a sufficiently close connection with it. He declined to treat general public policy as a separate trumping test. He also considered that trafficking supplied no additional ground: it does not automatically remove criminal liability, and the instruments concerning compensation did not require recovery for the distinct statutory tort.

1. United Kingdom Supreme Court: In Hounga v Allen and another [2014] UKSC 47, the court unanimously allowed the appeal, restored the Employment Tribunal’s compensation award and remitted the pre-dismissal harassment complaint.
2. Court of Appeal: In [2012] EWCA Civ 609, [2012] IRLR 685, the court set aside the compensation award because it considered the discriminatory-dismissal complaint inextricably linked with the illegal employment. It identified a possible exception to the grievance procedure but considered remittal futile in light of its illegality ruling.
3. Employment Appeal Tribunal: The appeal tribunal dismissed the employer’s cross-appeal against the discrimination award. It also dismissed the employee’s appeals concerning the contractual claims and pre-dismissal harassment.
4. Employment Tribunal: The tribunal dismissed the contractual claims for illegality and the harassment complaint for non-compliance with the statutory grievance procedure. It upheld the complaint of discriminatory dismissal and awarded £6,187 for injury to feelings.