It is well established in law that courts will not uphold an illegal contract of employment as that would amount to condoning the illegality. However, in Hounga v Allen and anor the Supreme Court said that the defence only applied when it could be inextricably linked to the claimant’s own unlawful conduct.

Basic facts

Ms Hounga, a Nigerian national in her early teens, came to the UK in January 2007 under arrangements made by Mrs Allen’s family. She was aware that the family had secured her entry to the UK using a false identity and that she was only allowed to stay for six months. Although she had no right to work in the UK and no right to remain beyond July 2007, she looked after Mrs Allen’s children, unpaid, for 18 months.

Mrs Allen then started to be physically abusive towards Ms Hounga and told her that if she left the house, she would be thrown in jail as she was in the UK illegally. In July 2008, Mrs Allen forcibly evicted the young woman from her home and dismissed her.
Ms Hounga lodged a number of claims including racial discrimination.This was based on the argument that, by dismissing her, Mrs Allen had treated her less favourably than she would have treated someone else because of her nationality.

Decisions of lower courts

The tribunal dismissed most of her claims but upheld her complaint of unlawful discrimination which related to her dismissal and ordered Mrs Allen to pay compensation of £6,187 for injury to feelings.

The Employment Appeal Tribunal dismissed Mrs Allen’s cross-appeal against the order, but the Court of Appeal overturned the tribunal’s decision on the basis that to uphold an illegal contract of employment (which formed a material part of Ms Hounga’s complaint) would amount to condoning the illegality. Ms Hounga appealed against that decision.

Supreme Court decision

The Supreme Court agreed that the defence of illegality must apply when the claim is so closely connected or inextricably bound up with the claimant’s own illegal conduct that the court could not permit them to recover without appearing to condone that conduct.

However, Ms Hounga’s complaint was not “obviously” (contrary to what the Court of Appeal suggested) inextricably linked to her own unlawful conduct, but simply provided the context in which Mrs Allen perpetrated various acts of abuse against Ms Hounga, which included dismissing her. Indeed, by applying the defence of illegality there was a danger that it would encourage employers like Mrs Allen to believe that they could discriminate against their employees with impunity.

In addition, as the defence of illegality was founded on public policy, courts also needed to consider what aspect of public policy underpinned the defence and whether it ran counter to another aspect of policy.

In this case, Ms Hounga was essentially trafficked from Nigeria, a crime which the UK authorities in the UK were constantly trying to combat. The decision of the Court of Appeal to uphold Mrs Allen’s defence of illegality ran “strikingly counter” to the current public policy against trafficking and in favour of protecting its victims. “The public policy in support of the application of that defence, to the extent that it exists at all, should give way to the public policy to which its application is an affront”.

Ms Hounga's appeal should therefore be allowed.