Okedina v Chikale

A contract of employment is not rendered illegal at inception merely because its later performance would contravene immigration law. The court must identify a clear statutory intention to invalidate the contract; provisions imposing penalties or criminal liability on an employer for employing a person without permission do not, without more, do so. A contract lawful when made may fall within the third category of illegality where it is later illegally performed, but unenforceability depends on the employee’s knowing participation and the public-policy analysis in Hounga v Allen [2014] UKSC 47 and Patel v Mirza [2016] UKSC 42. A reconsideration application may be refused where there is no reasonable prospect of varying or revoking the original decision, although that test differs from the appellate sift test.

A Malawian domestic worker was brought to the United Kingdom under immigration arrangements permitting work for a limited period. She continued working after her permission expired and was later dismissed. The Employment Tribunal upheld claims including unfair and wrongful dismissal, unauthorised deductions and holiday pay, finding that the contract was not illegal at inception and that the claimant had not knowingly participated in any later illegality.

The respondent appealed on the illegality issue and separately challenged the Employment Tribunal’s refusal to reconsider its decision after an adverse appellate sift ruling. The central questions were whether immigration provisions invalidated the employment contract from inception and whether reconsideration could properly be refused in those circumstances.

Both appeals were dismissed.

1. Illegality at inception. The court applied the three-category approach in Hall v Woolston Hall Leisure Ltd [2001] ICR 99. If the employment contract was the contract entered into in Malawi, there was no basis for saying that it was illegal when made. Even assuming that a new contract was made in 2013, its description as indefinite did not make it fixed-term. It was terminable on six weeks’ notice by either party and was therefore not illegal at inception.
2. Immigration legislation. Sections 15 and 21 of the Immigration Asylum and Nationality Act 2006 imposed penalties and potential criminal liability on an employer but did not clearly invalidate the employment contract. Applying the clear-implication principle in St John Shipping Corporation v Joseph Rank Ltd [1957] 1 QB 267 and the purposive approach in Patel v Mirza [2016] UKSC 42, the provisions did not render the contract void from inception. Section 98(2)(d) of the Employment Rights Act 1996 was consistent with a contract becoming unlawful during performance.
3. Public policy and knowledge. The immigration rules could make continued performance unlawful, bringing the case within the third category identified in Hall v Woolston Hall Leisure Ltd [2001] ICR 99. The public-policy analysis described in Hounga v Allen [2014] UKSC 47 and Patel v Mirza [2016] UKSC 42 required consideration of the purpose of the prohibition, countervailing policies and proportionality. The Employment Tribunal found that the claimant had not knowingly participated in the later illegal performance. That finding was not open to challenge, so the contract remained enforceable by her.
4. Reconsideration. The test under rule 70 of the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2013 was distinct from the sift test under rule 3(7) of the EAT Rules 1993. The Employment Tribunal’s process was unclear and potentially open to criticism. Nevertheless, after the appellate stages had rejected the factual challenges and the illegality argument had failed, there was no reasonable prospect of the original decision being varied or revoked. The second appeal was therefore academic and the refusal of reconsideration stood.

The later application to review the judgment under rule 33 of the EAT Rules 1993 was refused because the alleged factual error was disputed and would not have affected the result.

• Employment Appeal Tribunal — the first appeal proceeded to a full hearing on the illegality issue, and the second appeal concerned refusal of reconsideration. Both appeals were dismissed.
• London (South) Employment Tribunal — upheld the claimant’s employment claims, dismissed the race discrimination claim, and subsequently refused the respondent’s reconsideration application.