Employment Lawyers: Illegal Working and Unfair Dismissal

A case heard by the Court of Appeal (Klusova v London Borough of Hounslow) illustrates the difficulties that an employer can encounter when trying to avoid contravening the immigration legislation. Ms Klusova, a Russian national, had leave to remain and work in the UK until May 2004. In November 2000, she began working for Hounslow Council.
In March and May 2004 she applied to the Home Office for further leave to remain but both applications were refused. However, the May application was not actually dealt with until a formal refusal letter was sent to Ms Klusova at the end of 2005. When a worker applies before the expiry of their permit for an extension to their right to remain, permission to do so continues until the request has been dealt with.
Hounslow Council received contradictory advice from the Home Office but was told that Ms Klusova was an ‘overstayer’.
Ms Klusova maintained that she had applied for an extension but did not provide satisfactory evidence to this effect. Believing that continuing to employ her would contravene the Asylum and Immigration Act 1996, the Council dismissed her in August 2005. It did not follow the normal statutory dismissal procedures as it believed these did not apply when the dismissal was for breach of a statutory restriction. As it turned out, the Council was mistaken in its belief that continuing to employ Ms Klusova was an offence under the immigration legislation. Ms Klusova brought a claim for unfair dismissal.
The Court of Appeal found that the Council’s mistaken belief that Ms Klusova’s employment was unlawful was not sufficient for it to justify her summary dismissal. The employment must actually be unlawful for such justification to be relied on. However, given that the Council had received conflicting advice and had genuinely believed it could not lawfully continue to employ Ms Klusova, her dismissal was potentially fair for ‘some other substantial reason’.
Unfortunately for the Council, however, the statutory dismissal procedures do apply in these circumstances. As the Council had failed to follow the procedures, Ms Klusova’s dismissal was automatically unfair.
The case was remitted back to the Employment Tribunal to determine the appropriate compensation.

Pinder Reaux & Associates