An employee (anyone with a contract of employment) is entitled to bring a variety of contractual claims in the event of a breach, but what happens if the contract is illegal? The Employment Appeal Tribunal (EAT) said in Zarkasi v Anandita and Tan that a worker cannot enforce rights under a contract if it was illegal from the outset.

Basic facts

Ms Zarkasi, who was Indonesian, agreed to travel to the UK to work for two years for the daughter of her sister’s employer. She obtained an identity card, passport and tourist visa from the passport office in Jakarta by assuming a false identity.

She flew to London in March 2007 where she lived with her employers, caring for their son. At the end of the two years, she asked to return to Indonesia, but, after an argument with her employer who wanted her to stay longer, she agreed to stay until August 2009.

She left her employers’ house in August, went to a trafficking charity and brought a number of contractual claims as well as a claim for race discrimination.

Although Ms Zarkasi accepted that her contract was unenforceable because it was illegal, she argued that as a trafficking victim, she was entitled to rely on the Council of Europe Convention on Action against Trafficking in Human Beings, which states that signatories should provide victims of trafficking with the right to compensation as part of their domestic laws.

Tribunal decision

Finding that Ms Zarkasi had freely and voluntarily taken part in arrangements to enter the UK by pretending to be someone else, the Tribunal said her contract was unlawful and therefore unenforceable.

She could not, however, rely on the convention because, as a statutory body, it did not have the jurisdiction to hear a claim under the convention and did not therefore consider whether she was a victim of trafficking or not.

In considering her claims under the Race Relations Act 1976 (now part of the Equality Act 2010), it said that the correct comparator would be someone who was also in the country illegally and who was employed illegally.

The reason she had been exploited was not because she was Indonesian but because she was in the UK illegally and without the relevant work permit. This could not constitute a racial ground within the meaning of the Race Relations Act.

EAT decision

The EAT agreed with the Tribunal that the contractual claims could not succeed because to hold otherwise “would be to render a contract valid that legislation holds otherwise to be invalid”.

Although it agreed that the public policy of a state “must necessarily include respect for and taking proper account of [its] international obligations”, the Tribunal was right not to hold that a contract was lawful “as a matter of discretion or interpretation” when it was obvious that it was not.

If, however, it could be persuaded that the Tribunal did make an error of law in its approach to the convention, and should have made conclusions specifically about trafficking, the EAT said that her claim would still not succeed.

This was because, on the facts found by the Tribunal (that she entered the UK freely and willingly), she did not fit the definition of trafficking in human beings under article 4 which includes the use of threats or other forms of coercion or abduction.

Finally, with regard to the race relations claim, the EAT said that the Tribunal was entitled to conclude that the proper comparator was somebody who had no right to work or remain in the UK and that as a matter of fact, her treatment “had nothing to do with her nationality”.