Sometimes, according to a recent Court of Appeal case.
The employee, a live-in domestic worker, did not have a visa for the entirety of her employment. However, her employer led her to believe that a visa was in place, despite the employer knowing that her visa application had been refused. After her dismissal the employee issued a number of employment tribunal claims, and was awarded in excess of £72,000 (£64,000 relating to unpaid wages).
During the proceedings the employer tried to argue the defence of “illegality”: it said that, as the employee did not have permission to remain in the UK after her visa had expired, the employment contract was illegal, and therefore any contractual claim against the employer (eg for unpaid wages) should be unenforceable.
It was found that the employee had not knowingly participated in the illegal performance of the employment
contract. She did not know that her visa application had been unsuccessful as the employer had retained her passport and had continued to employ her.
The Court of Appeal explored whether there were grounds to argue a defence of illegality based on the provisions of the Immigration Asylum and Nationality Act 2006 (“Act”). The court found that the relevant sections of the Act impose civil penalties and criminal sanctions but do not expressly prohibit an employment contract being made. This meant the employer in this case could not rely on the defence of illegality to avoid liability for the employment tribunal claims issued against it.
The facts of this case were unusual and extreme, but it does highlight that an employer who fails to complete right-to-work checks may be liable for a penalty under the Act and still remain liable for employment tribunal claims (notwithstanding that the employee may have been working illegally). What is sometimes not stressed in commentaries relating to this case, however, is that the employee here was not complicit in (or even aware of) the illegality and, in most cases involving contract termination due to illegality, the employee will not only be aware of it but also usually the cause of it. In those cases the employer is far more likely to have a defence to any employment claim that may be made.