Believe it or not

Klusova v London Borough of Hounslow

Section 8 of the Asylum and Immigration Act says it is illegal for employers to hire someone who is not entitled to live and work in the UK. In Klusova v London Borough of Hounslow, the Court of Appeal said that it is fair to dismiss someone as long as the employer holds a genuine belief that an employee is not entitled to work, even if that belief turns out to be mistaken.

Basic facts

Ms Klusova, a Russian national, started to work for the Council in November 2000. At that point, she had the right to live and work here until May 2004. In March and May 2004 she applied to the Home Office for "a leave to remain work permit”, but both applications were refused.

When the Council contacted the Home Office in early March 2005 to ask whether Ms Klusova had a right to work, it was told that she was an "overstayer". Confusingly, it was subsequently told that she was allowed to work until her appeal was heard.

The Council made further inquiries in July 2005 and was again told she was not entitled to work. When she failed to provide any documentary evidence to show that she was allowed to work, the Council summarily dismissed her on 10 August. It did not follow the statutory dismissal and disciplinary procedure (DDP) and refused to let her appeal.

She claimed unfair dismissal. The Council argued the dismissal was fair under section 98(2)(d) of the Employment Rights Act (that a dismissal is potentially fair if employing the person would contravene a statutory restriction), or under section 98(1)(b) for some other substantial reason (SOSR).

Tribunal and EAT decisions

The tribunal decided that, as Ms Klusova had made an in-time application, her leave to remain had been extended and she therefore still had the right to work. As a result, the Council could not rely on section 98(2)(d), as it was not enough to genuinely believe there had been a breach of immigration law. There had to be an actual breach of the statutory provision.

The tribunal also rejected the Council's argument of "some other substantial reason" under section 98(1)(b). It held that the dismissal was automatically unfair, saying that the Council had failed to notify or consult with Ms Klusova about its concerns so that she could get clarification from the Home Office. It was also procedurally unfair as the Council had not followed the statutory DDP.

But the Employment Appeal Tribunal said the tribunal’s decision that Ms Klusova had made a valid in-time application was perverse, as there was no evidence to substantiate that. Instead, it concluded that, at the time of her dismissal, Ms Klusova could not continue to work without contravening the law. As the Council had a genuine belief that she could not continue in her employment without contravention of an enactment. this amounted to "some other substantial reason".

Court of Appeal decision

The Court of Appeal partially reversed the EAT decision. It said there was some evidence to show that Ms Klusova had made a valid in-time application and she therefore had the right to work, pending a decision on her application. The confusion had arisen because of differing advice from different sections of the Home Office.

On the other hand, the Court agreed with the EAT that her dismissal could be “for some other substantial reason”. Although there were flaws in the procedure the Council had followed to establish whether Ms Klusova was allowed to remain and work, it clearly held a genuine belief that it she did not have a legal right to work here.

But although the Council succeeded on this point, the dismissal was still unfair because it had failed to follow the statutory DDP.