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The Court of Appeal has held in Okedina v Chikale that the defence of illegality could not apply to claims arising out of a contract of employment where such claims arose after the employee's immigration permission to remain in the UK had expired.

The claimant had been brought to the UK from Malawi to work as a live-in domestic worker. Her employer obtained a six-month worker visa giving a good deal of false information.  When the visa expired, the claimant remained in the UK and continued to work for her employer. Her employer kept her passport and applied for a visa extension. Although the application failed, the employer told the claimant that the necessary steps were being taken to extend her visa, and, as a result, she had no knowledge that she did not have the right to remain or work in the UK. She worked for very long hours and low pay, and was summarily dismissed when she asked for more money. She brought various claims, including claims for unfair dismissal, unlawful deductions from wages, and unpaid holiday pay. Her employer sought to raise a defence of illegality on the basis that the contract was illegal, or illegally performed, because the claimant no longer had leave to remain and that accordingly any contractual claim was unenforceable.

The Court of Appeal held that the defence of statutory illegality did not apply.  Sections 15 and 21 of the Immigration, Asylum and Nationality Act 2006 subject employers to civil and criminal penalties when a foreign national works illegally, but do not provide that the contract of employment concluded with a person without the appropriate immigration status needs to be unenforceable. As far as common law illegality was concerned, the claimant had not been aware that her leave to remain in the UK had expired or that she had no right to work. She had been misled by her employer and so the doctrine of illegality could not apply.

Take note: Okedina is an unusual case in that the claimant was unaware that she had no leave to remain in the UK. Generally the individual will be aware that they have overstayed their leave to remain.