Illegal Contracts and Settlement Agreements.

Working illegally does not automatically prevent an employee from the protection the judicial system provides in the UK. However, an employee who works illegally under a contract of employment may not benefit from certain contractual and statutory employment protections.

For example, an employee who works illegally under a contract of employment may not make a claim for an unlawful deduction of wages or a breach of contract claim in the employment tribunal. For public policy reasons cases involving discrimination have received different treatment so are not automatically barred. However both these positions were brought before the Supreme Court in the case of Hounga v Allen.

The legal concept of illegality seeks to prevent individuals benefitting from their own illegal conduct. However, such a rigid rule will render individuals liable to exploitation from human trafficking and other forms of forced labour within the UK. As a result, claims for discrimination will only be barred in limited circumstances where the illegal conduct of the employee is so inextricably linked to the claim itself. For example, a drug dealer would be barred from bringing a claim for a breach of health and safety for being forced to work in an unsafe work environment. The legal test is not straightforward and involves an element of subjectivity but its intention is to ensure that compensation is only awarded in circumstances where it would not be tantamount to condoning the illegality.

Furthermore, human trafficking considerations have come to the fore in recent years and the Modern Slavery Bill 2014/15 seeks to protect those who are forced to work and are susceptible to exploitation.

The case itself analysed the current law and whether the complaint of harassment and racial discrimination was so inextricably linked to the illegal employment of a live in nanny. The public policy reasons for allowing the claim to proceed were conclusive, the Supreme Court upheld Mrs Allen’s appeal. Her illegal work as a nanny and her subsequent harassment and discrimination were not inextricably linked. The Court even suggested that the claimant would have been able to appeal regarding her claim for unlawful deduction of wages.

If you are considering a settlement agreement in these circumstances, please do not hesitate to contact a member of the team.

del.icio.us digg stumbleupon buzzup BlinkList mixx myspace linkedin facebook reddit.com ma.gnolia.com newsvine.com furl.net google yahoo bebo.com twitter.com technorati.com