Veitch Penny LLP - Exeter | Crediton, Devon

Case

Mihovil Vakante v Governing Body of Addey & Stanhope School
Court of Appeal Decision - (30th July 2004)

Issues

1) Contracts
(2) Illegality
(3) Public Policy

Facts

Mr Vakante was a Croatian National who applied for asylum in the UK in 1992. Whilst the application was being processed, he was advised that he could not work in the United Kingdom without a permit. Nevertheless he applied to the Local Authority for a job as a Graduate Trainee Maths Teacher, stating in his application that he did not need a work permit in breach of the Immigration Act 1971. He did not apply for permission to work. He supplied them with a National Insurance Number that he had obtained.

Mr Vakante began employment but was dismissed 8 months later. He presented a complaint of direct race discrimination and victimisation to the Employment Tribunal, on the grounds that his employer had not allowed him opportunities for training and other benefits and facilities.

At first instance, the Employment Tribunal held that he could not proceed with his claim on the basis of his illegal conduct, which consisted of Mr Vakante obtaining employment in breach of the Immigration Act and making fraudulent statements about his employment status in order to receive benefits. This was in line with the principles set out in Hall –v- Woolston Hall Leisure Limited (2000).

He appealed the decision to the Employment Appeal Tribunal which upheld the original Tribunal’s decision.

Mr Vakante then appealed to the Court of Appeal. He argued that his claim for race discrimination did not involve the assertion or enforcement of his rights under or based on a Contract of Employment and accordingly illegality could not defeat that claim.

Decision

The appeal would be dismissed, and the previous decision upheld.

The Court of Appeal confirmed that the approach to be taken by Employment Tribunals was identical to that used in sex discrimination cases, noting that the approach was flexible and allowed the tribunal to reach sensible and just decisions in most cases. This meant that the Tribunal had to consider whether the applicant’s claim arose out of or was so clearly connected or inextricably bound up or linked with the illegal conduct of the applicant that the Court could not permit the applicant to recover compensation without appearing to condone that conduct.

This does not restrict the Tribunal to simply consider the matter of causation. Matters of fact and degree had to be considered such as the circumstances surrounding the applicant’s claim, the nature of the conduct and the extent of the applicant’s involvement.

In this case, the complaints made by Mr Vakante were so closely bound with the illegality of his conduct in obtaining and continuing the employment that if the Tribunal were to permit him to recover compensation for discrimination, the tribunal would appear to condone his behaviour. Mr Vakante was solely responsible for his conduct, which had gone to the roots of the employment situation.

Comments

Historically the approach when dealing with illegal contracts in discrimination cases has been less rigid than in respect of claims founded on the Contract of Employment itself (eg unfair dismissal) because such claims do not arise from the contractual obligations itself but were a separate statutory tort.

To successfully argue illegality in cases such as this there must be a causal link between the claim itself made by the applicant and the illegality. This is a question of fact in each case to determine whether there has been a sufficient degree of participation by the employee. Simply participating in wrongdoing does not automatically bar a worker’s claim.