United Kingdom Employment Appeal Tribunal

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Cite as: [1991] UKEAT 253_90_1010

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BAILII case number: [1991] UKEAT 253_90_1010

Appeal No. EAT/253/90

EMPOLYMENT APPEAL TRIBUNAL

4 ST. JAMES'S SQUARE, LONDON, SW1 4JU

At the Tribunal

On 10th October 1991

Judgment delivered 28 November 1991

Before

THE HONOURABLE MR JUSTICE WOOD MC (P)

MR T S BATHO

MR K GRAHAM CBE

MR R K SHARMA APPELLANT

HINDU TEMPLE & OTHERS RESPONDENTS

Transcript of Proceedings

JUDGMENT

Revised

APPEARANCES

For the Appellant DR S JUSS

(of Counsel)

Messrs Jane Coker & Co

Solicitors

523/525 High Road

Tottenham

LONDON

N17 6SB

For the Respondents No appearance by or

representation on behalf

of the Respondents

For the Amicus Curiae MISS T GILL

(of Counsel)

The Treasury Solicitor

Queen Anne's Chambers

28 Broadway

LONDON

SW1H 9JS

MR JUSTICE WOOD (PRESIDENT): By an Originating Application dated 23rd June 1989, Mr Sharma who is a Hindu Priest, complained of unfair dismissal. On the 17th and 18th January 1990 an Industrial Tribunal sitting at Reading under the Chairmanship of Mr Jenkinson heard evidence from both sides. Mr Sharma was represented by a member of the Free Representation Unit (FRU) and the Trustees appeared in person. The Tribunal found that Mr Sharma had been employed by the Respondents from the 26th July 1986 to the 3rd April 1989.

At the end of the second day the Tribunal itself raised the question of the legality of the contract of employment. The Hearing was adjourned. The Applicant was ordered to produce his passport and this he did. By letter of 25th January 1990 the Chairman recited the visas in that passport and continued:

"There is no visa relating to Mr R K Sharma's stay, or employment in the United Kingdom for the period between 15 May 1987 and 17 May 1989. His employment with the Hindu Temple at Slough lasted from 26 July 1986 to 3 April 1989. That employment was never validated by the grant of a visa. It appears to be in breach of the first visa referred to at 2(a) above.

4. Mr Sharma remained, and remains in the United Kingdom from 15 May 1986 to date.

5. His right to remain in the United Kingdom was from time to time extended while he pursued an appeal under the Immigration Act 1971. No written authority has been disclosed, however, authorising his work at that Hindu Temple, Slough.

6. The Chairman invites those parties to this Tribunal Application who have entered a Notice of Appearance to submit written representations to the Tribunal before 13 February 1990, on the point:

whether or not the applicant's employment at the Hindu Temple, Slough was conducted under a contract of employment which was illegal, having regard to the applicant's status by virtue of the Immigration Act 1971.

7. The Tribunal will then consider the matter further."

Written submissions were made on behalf of both parties. Those of the Applicant are quoted verbatim in the Decision and are rejected. We have not seen those of the Respondents. We are also unsure precisely which documents were before the Tribunal. There is different legal representation before us on this Appeal.

The Industrial Tribunal decided that the contract of employment was tainted by illegality and therefore unenforceable. It held that it had no jurisdiction to entertain the application.

Mr Sharma appeals. This was and is a difficult matter and we are grateful to Mr Juss and to Miss Gill, as Amicus Curiae, for their assistance. The employers had not been represented before us. The Industrial Tribunal had an unenviable task; it involved trekking through the jungle of immigration law without expert assistance.

The first point taken by Mr Juss is that the Tribunal were wrong to refer to "want of jurisdiction" and the appropriate wording is to be found at the end of the Decision when they say:

"his contract of employment therefore was illegal."

It was therefore unenforceable. We agree with Mr Juss, but that alone would not undermine the Decision. There are far more difficult and fundamental matters.

We are not satisfied that the Tribunal was shown all the relevant documents. We have seen quite a number and it is clear that they were not all in evidence before the Tribunal nor was the Tribunal referred to all the relevant law. The issue properly raised required findings of fact after hearing evidence and we have therefore accepted the submissions from Counsel that justice demands that this whole matter be remitted for a fresh hearing.

The history appears to be as follows. Mr Sharma is a citizen of India. On the 15th May 1986 he entered the United Kingdom. His passport was endorsed:

"Leave to enter the United Kingdom on condition that the holder does not enter employment, paid or unpaid other than with Hindu Temple Trust, Southall, and does not engaged in any business or profession with the consent of the Secretary of State for the Home Department is hereby given for/until ONE YEAR .... 15 May 1986"

On the 26th July 1986 he ceased to be employed at Southall and took employment as the Hindu Priest at Slough. A Home Office explanatory statement under reference S.66588 gives a more detailed history, but suffice it to say that on the 27th April 1987 Mr Sharma applied to the Home Office for leave to remain in the United Kingdom to work for the Hindu Society in Slough. By a letter dated June 1987 the Home Office wrote to Mr Sharma's Member of Parliament saying that:

"Mr Sharma's application will be considered under the provisions of the Immigration Rules relating to Ministers of Religion."

The Slough Hindu Society withdrew its support for Mr Sharma saying:

"there were quite a number of Priests settled in the United Kingdom looking for employment"

and on the 9th February 1988 the Home Secretary refused the application as he was not satisfied that the Applicant was still engaged in the category of full time employment for which he had been admitted, or that his employer wished to continue to employ him.

The permission to enter and to remain in the United Kingdom granted in this first visa prima facie expired on the 14th May 1987, but it was automatically extended until 28 days after the refusal on the 9th February 1988 by the Immigration (Variation of Leave) Order 1976 (SI 1976 1572). That extension includes the conditions originally attached - SHAUKAT ALI v. CHIEF ADJUDICATION OFFICER - C.A. - The Times Newspaper 24.4.85.

The original leave therefore expired on the 8th March 1988.

On the 24th February 1988 Mr Sharma appealed to the Adjudicator.

On the 3rd April 1989 he was dismissed from Slough.

On the 2nd May 1989 a fresh application for leave was made by the Hindu Temple in Greenwich.

On the 5th May 1989 Mr Sharma withdrew his Appeal.

On the 16th May 1989 a second visa was granted which reads:

"Leave to remain in the United Kingdom is hereby given until 15 May 1990. The holder is not to engage in employment paid or unpaid other than with the Greenwich Hindu Mandir (Temple)... 16th May 1989"

We understand that Mr Sharma has now been granted unlimited leave to reside in the United Kingdom.

His period of employment falls conveniently into two parts. From the 26th July 1986 until the 8th March 1988 he was in this country under his first visa which included conditions. From 8th March 1988 until his employment at Slough terminated on the 3rd April 1989 the refusal of his application for extension of his original visa was the subject of appeal.

The relevant sections of the Immigration Act 1971 read as follows:

"Section 3 (1) Except as otherwise provided by or under this Act, where a person is not [a British citizen] -

(a)he shall not enter the United Kingdom unless given leave to do so in accordance with this Act; ...

(c)if he is a limited leave to enter or remain in the United Kingdom, it may be given subject to conditions restricting his employment or occupation in the United Kingdom, or requiring him to register with the police, or both.......

..........................................................................

(5)A person who is not [a British citizen] shall be liable to deportation from the United Kingdom -

(a)if, having only a limited leave to enter or remain, he does not observe a condition attached to the leave or remains beyond the time limited by the leave;........

.............................................................................

Section 14Appeals against conditions

(1) Subject to the provisions of this Part of this Act, a person who has a limited leave under this Act to enter or remain in the United Kingdom may appeal to an adjudicator against any variation of the leave (whether as regards duration or conditions), or against any refusal to vary it; and a variation shall not take effect so long as an appeal is pending under this subsection against the variation, nor shall an appellant be required to leave the United Kingdom by reason of the expiration of his leave so long as his appeal is pending under this subsection against a refusal to enlarge or remove the limit on the duration of the leave. ........

Section 24Illegal entry and similar offenses

(1) A person who is not [a British citizen] shall be guilty of an offence punishable on summary conviction with a fine .... or with imprisonment for not more than six months, or with both, in any of the following cases:-

(a).............................................................................

(b)if, having only a limited leave to enter or remain in the United Kingdom, he knowingly either -

(i)remains beyond the time limited by the leave; or

(ii)fails to observe a condition of the leave;

(c)etc .." (our emphasis)

The first submission made is by Mr Juss is that although it could be argued that Mr Sharma was in breach of the conditions of his first visa during his period of employment up to the 8th March 1988, thereafter no conditions existed and that he was therefore free to take what employment he liked. His ability to take employment was wholly unrestricted.

The submission is based upon the technical use of the word "leave" throughout the legislation. It has the same meaning as "permission" or "a permit", the use of which wording might simplify an understanding of the Statutory provisions. It is submitted that an examination of the wording of paragraph 3 of the Variation of Leave Order and Section 14(1) of the Act, leads to the conclusion that on the expiration of the leave (permit) 28 days after refusal to renew or vary, the only protection against deportation pending appeal is to be found in Section 14(1),

"nor shall an appellant be required to leave".

Thus during that period no valid leave (permit) exists and there are no conditions. Hence an applicant is entitled to obtain employment without restrictions pending the hearing of his appeal or its withdrawal. Both Counsel supported this construction of the provisions.

In the light of our subsequent reasoning, we do not find it necessary to decide that point in the present case. It is said to be a recognised lacuna and would mean for example that if an initial limited leave of one month conditional upon place of employment were granted and within that month the employer and employee were shown to be incompatible and the employment terminated, that immigrant having appealed would be in the United Kingdom without any condition for some eighteen months to two years pending the hearing of any appeal. We would draw this situation to the attention of the Home Secretary; whether any changes are made and in what form is not a matter for us.

However, before that submission can be raised an industrial tribunal would need to have heard evidence and decided whether Mr Sharma was "knowingly" in breach of the conditions of his leave. To this end all the surrounding circumstances and documentation would need to be examined. It would also be important to study the immigration rules and in particular Rules 38, 40 and 123.

In considering the enforceability of this contract of employment and its legality there are two relevant approaches which are conveniently set out in the Judgment of Devlin J in ST JOHN SHIPPING CORPORATION v. JOSEPH RANK LTD 1957 [1QB 267 at 283] in referring to the principles relating to illegal contracts he says this:-

"There are two general principles. The first is that a contract which is entered into with the object of committing an illegal act in unenforceable. The application of this principle depends upon proof of the intent, at the time the contract was made, to break the law; if the intent is mutual the contract is not enforceable at all, and, if unilateral, it is unenforceable at the suit of the party who is provided to have it. This principle is not involved here ... The second principle is that the court will not enforce a contract which is expressly or impliedly prohibited by statute. If the contract is of this class it does not matter what the intent of the parties is; if the statute prohibits the contract, it is unenforceable whether the parties meant to break the law or not. A significant distinction between the two classes is this. In the former class you have only to look and see what acts the statute prohibits; it does not matter whether or not it prohibits a contract; if a contract is deliberately made to do a prohibited act, that contract will be unenforceable. In the latter class, you have to consider not what acts the statute prohibits, but what contracts it prohibits; but you are not concerned at all with the intent of the parties; if the parties enter into a prohibited contract, that contract is unenforceable."

Thus, applying the first of those principles, if Mr Sharma be held knowingly to be in breach of the condition of his leave, the contract of employment will be illegal in its formation.

Even if that issue is not decided against him the Court or the industrial tribunal will still have to consider the second principle and may find that the contract is tainted with illegality. It is in this connection that it is so important that employers should ensure that immigrants are legally entitled to be employed in the United Kingdom. See DHATT v. MACDONALDS HAMBURGERS LTD [1988] ICR 591 EAT:[1991 ICR 238 CA].

This second principle has been considered in many cases such as CORAL LEISURE GROUP v. BARNETT [1981] ICR 503 and NEWLAND v. SIMMONS & WILLER (HAIRDRESSERS) LTD [1981] ICR 521, but most recently by the Court of Appeal in HEWCASTLE CATERING LTD v. AHMED & ELKAMAH (Thursday 20th June 1991) as yet unreported. The Court of Appeal relied upon and followed two earlier cases SAUNDERS v. EDWARDS [1987] 1 WLR 116 and EURO-DIAM v. BATHURST [1988] 2 WLR 517.

The emphasis is now clearly laid on the approach of "public policy". This is emphasised by Nicholls LJ at SAUNDERS v. EDWARDS AT P.1132C where he says:

"The refusal of the court to enforce an agreement entered into in a particular form for an unlawful purpose is based on public policy, and public policy is not a blunt, inflexible instrument."

We would also refer to the Judgment of Bingham LJ at p.1134 B where he says:

"Where issues of illegality are raised, the courts have (as it seems to me) to steer a middle course between two unacceptable positions. On the one hand it is unacceptable that any court of law should aid or lend its authority to a party seeking to pursue or enforce an object or agreement which the law prohibits. On the other hand, it is unacceptable that the court should, on the first indication of unlawfulness affecting any aspect of a transaction, draw up its skirts and refuse all assistance to the plaintiff, no matter how serious his loss nor how disproportionate his loss to the unlawfulness of his conduct.... But I think that on the whole the courts have tended to adopt a pragmatic approach to these problems, seeking where possible to see that genuine wrongs are righted so long as the court does not thereby promote or countenance a nefarious object or bargain which it is bound to condemn."

In a full review of all the authorities Kerr LJ in EURO-DIAM LTD v. BATHURST says this at p.526 at D:

"The ex turpi causa defence ultimately rests on a principle of public policy that the courts will not assist a plaintiff who has been guilty of illegal (or immoral) conduct of which the courts should take notice. It applies if in all the circumstances it would be an affront to the public conscience to grant the plaintiff the relief which he seeks because the court would thereby appear to assist or encourage the plaintiff in his illegal conduct or to encourage others in similar acts".

It will be for an industrial tribunal to find all the relevant facts. Thus if Mr Sharma is not found to be knowingly in breach of his condition then the formation of his contract of employment is unlikely to be held to be illegal. However, it will be open for an industrial tribunal to consider whether in all the circumstances that the contract is tainted with illegality as being contrary to public policy. This is essentially a matter for their application of the facts to the law.

We sympathise with this Industrial Tribunal in the position in which it found itself. We are uncertain what documents were before it; it was not referred to the relevant sections of the 1971 Act nor to the Immigration Rules nor to the Statutory Instrument; it did not therefore hear evidence on the relevant issues. In those circumstances we do not feel that this Decision can stand; a re-Hearing will be necessary. Discovery from both sides seems essential, as does the calling of evidence. We hope that this Judgment may be of some assistance in this difficult area of this jurisdiction.

Appeal allowed, case remitted for a re-Hearing.