Heads I Win, Tails You Lose

07 Nov 2011

Mrs Okuoimose is Nigerian.  Her husband is Spanish.  By virtue of EU Directive 2004/38 on the rights of citizens of the EU and their families, Mrs Okuoimose has the right to live and work in the UK; however, her passport was endorsed with a stamp which said that a:

"right of residence in the UK as a family member of an EEA National (Mr Okuoimose), who is resident in the UK in the exercise of a treaty right, is hereby given until 8th July 2010."

On 28th March 2010, Mrs Okuoimose was employed by Asda at its store in Stevenage.  What would you have done in July when, according to the stamp in her passport, her right of residence expired?

Most employers would have done exactly what Asda did.  On 8th July 2010 they suspended Mrs Okuoimose, without pay, and asked her to provide evidence of her eligibility to work in the UK.  They also wrote to UKBA to enquire about Mrs Okuoimose's immigration status.  At the same time, she wrote to UKBA applying to renew the permit in her passport.

By a letter dated 12 August 2010, UKBA told Asda that it could not confirm that Mrs Okuoimose was entitled to work in the UK.  It went on to say that:

"…unless your employee is able to provide you with appropriate evidence of their entitlement to work, you will not have a statutory excuse against liability for payment of a civil penalty for employing an illegal migrant worker."

Asda dismissed Mrs Okuoimose on 20 August on the ground of illegality.  Later that day, Mrs Okuoimose produced a letter she had received from UKBA (dated 16 August) confirming that she was free to live and work in this country.  Asda reinstated Mrs Okuoimose and reimbursed her pay from 16 August but she claimed an unlawful deduction from pay under section 13 of the Employment Rights Act, namely loss of earnings between 8 July and 16 August.

The Employment Judge decided that the contract became illegal on 8 July and he dismissed the claim.  Mrs Okuoimose appealed.  

In the appeal proceedings, Mrs Okuoimose argued that she had a right to work in the UK which was not lost because of the stamp in her passport.  Asda argued that it had done the best it could on the evidence presented to it.

The Employment Appeal Tribunal (EAT) found in favour of Mrs Okuoimose.  Crucially, it accepted that there is a distinction between rights, on the one hand, and permissions, grants and discretions, on the other.  In particular, it found that the exercise of a right to work does not depend upon stamps in a passport. Therefore, the contract was not illegal and the stoppage of pay was unlawful.

The EAT went onto say that the reasonableness of Asda's behaviour and its concerns about civil penalties were irrelevant.

We have a lot of sympathy with Asda and other employers who are faced with this sort of problem.  You try to do the right thing by the Immigration Rules but you get no assistance from UKBA and fall foul of employment law. However, the EAT's decision is entirely consistent with other authoritative judgments which have been given during the last couple of years, so the message is clear: if you intend to dismiss an employee for illegality, make sure your belief in the illegality of the contract is absolutely sound.