Source: http://ukscblog.com/case-comment-hounga-v-allen-anor-2014-uksc-47/
Timestamp: 2019-04-23 18:55:10+00:00

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At the end of July, the Supreme Court handed down judgment in Hounga v Allen  UKSC 47. The case hung on a narrow point regarding illegality and discrimination on the grounds of nationality but also touches on a number of wider issues concerning immigration, contract and employment law. As Lord Wilson put it in the case ‘[a] small claim generates an important point’ and, one could add, some interesting and contentious obiter.
There is some difficulty in outlining the facts, due to the ‘tribunal’s widespread failure to find facts’, which indeed ‘hampered the inquiry at all three appellate levels’ . This was, to an extent, due to the unreliability of both claimant and respondent.
However, in summary, Miss Hounga arrived in the UK from Nigeria in January 2007, when she was around 14 years of age. For two years preceding her arrival she had worked for Mrs Allen’s brother in Lagos as a live-in home-help. Mrs Allen’s brother and mother jointly proposed to Miss Hounga that she should go to live in England with Mrs Allen where she would both work in her house and go to school (a proposal she readily accepted, particularly due to the prospect of education, and to which Mrs Allen added the offer to pay her £50 a month in addition to bed and board). To achieve this, Mrs Allen, her mother and brother and Miss Hounga conspired for Miss Hounga to swear a false affidavit as to her age and identity, leading to a Nigerian passport to be issued with incorrect details, and to gain entry clearance to the UK as a 6-month visitor, through the use of a document in which Mrs Allen’s mother purported to be Miss Hounga’s grandmother and which contained an invitation to stay with her in England. For 18 months Miss Hounga worked as ‘a sort of au pair’  but did not receive the promised income or education. And, while she was not entirely confined to the house, she was subjected to serious physical abuse and threatened with prison should she leave the house and be found by the police. She left the house following an incident during which Mrs Allen smacked, beat, drenched and evicted her causing her to sleep outside in wet clothes. She was then taken to social services by a stranger.
Miss Hounga brought claims, reliant on contract, for wrongful dismissal, unfair dismissal, unpaid wages and holiday pay and complaints in tort for discrimination and harassment. The Employment Tribunal dismissed the contract claims on grounds of illegality (such dismissal being upheld by the EAT and not appealed further) and held that the harassment claim fell foul of the then statutory grievance procedure (again upheld by the EAT but overturned by the Court of Appeal due to the tribunal’s failure to consider the exceptions to the requirement to follow the grievance procedure) but allowed the discrimination claim, awarding £6,187 for injury to feelings (again upheld by the EAT but overturned on the grounds of illegality by the Court of Appeal).
The Supreme Court unanimously agreed that the Court of Appeal was incorrect to hold that the illegality defence defeated the complaint of discrimination, although there was a dispute as to the reasoning, with Lord Wilson giving the leading judgment (with the agreement of Lady Hale and Lord Kerr) and with Lord Hughes (with whom Lord Carnwath agreed) dissenting in part. The harassment claim, which the Court of Appeal had held was possible save for the presence of illegality, was consequentially remitted to the Employment Tribunal. While there was an attempt to introduce new points, the judgment primarily considers the doctrine of illegality.
‘As Lord Wilson’s penetrating analysis clearly shows, a generalised statement of the conceptual basis for the doctrine under which illegality may bar a civil claim has always proved elusive’ (per Lord Hughes at ). However, Lord Wilson drew a contrast between the doctrine’s use in contract and in tort (and, furthermore, within contract, considering that unfair dismissal might arguably require analysis different from a claim for wrongful dismissal). While claims of illegality in contract have their own complexities, the application in tort is highly problematic -. In determining whether a claim is ‘inextricably linked’ to unlawful activity, there is clear ‘potential for inconsistent application driven by subjective considerations’ . Thus the three justices of the Court of Appeal could think the link obvious whereas the five justices of the Supreme Court could hold the illegality was ‘no more than the context in which Mrs Allen then perpetrated the acts of physical, verbal and emotional abuse by which, among other things, she dismissed Miss Hounga from her employment’  (or that, in Lord Hughes’s words, there was no ‘sufficiently close connection between the illegality and the tort to bar the claim’ ). The majority fortified that decision through reference to international laws on human trafficking and the balancing of competing public policy concerns, the defence of illegality running ‘strikingly counter to the prominent strain of current public policy against trafficking and in favour of the protection of its victims’ .
The discrimination claim, having held that illegality did not prevent it, was not amenable to further challenge despite the attempt to introduce new points in the case (concerning the private household exemption re nationality in the Race Relations Act 1976 (but which not does not appear in the Equality Act 2010) and the correct comparator for direct discrimination with echoes of Patmalniece v SSWP  UKSC 11 and Lewisham v Malcolm  UKHL 43).
While the case does not overrule previous authority and relies on a recognition of subjectivity, the case may have wider importance. Lord Hughes considered that a ‘case in which… all the members of this court are agreed on the outcome of the appeal is not a suitable vehicle to essay a general synthesis such as has been so difficult to formulate’ with regard to the doctrine of illegality . Nonetheless, the majority suggest an approach to illegality whereby competing public policy interests are balanced, whereas the minority ‘do not think that the cases establish a separate trumping test of public policy’ . That division may prove fertile ground for further debate.
That is not the only difference between the two judgments in this case. The division becomes starker when looking at the possible effect on contract law. The majority suggest that the test could have allowed a claim for unpaid wages to succeed (though apparently not an unfair dismissal claim)  whereas the minority emphatically hold that as a lawful contract is required for breach of contract claims (and by extension unfair dismissal) such claims, unlike the tortious ones, would not succeed . Furthermore, the two judgments show diametrically opposed views as to the effect of the Convention on Action against Trafficking in Human Beings CETS No 197, art 15(3) as to whether the provision is limited to compensation only for trafficking or mandates compensation for related acts of discrimination. At the very least, it stands as yet another example that discrimination law is less restrictive than that prohibiting unfair dismissal, but may have wider-reaching consequences.
James Hand is an Associate Senior Lecturer at the School of Law, University of Portsmouth, with particular interest in Discrimination and Employment Law and aspects of Constitutional and Tort Law. Further published articles by James Hand can be accessed here.
Do you feel that the decision on the Hounga v Allen case was a stimulant for the enactment of the Immigration Act 2014, similar to the enactment of the Employment Permits (Amendment) Act 2014 in Ireland, was fueled by the landmark decision made in Hussein v Younis (2012)?
The timing seems rather different. As far as I know the none of the earlier decisions in Hounga were mentioned in parliamentary debate on the Immigration Bill. The Modern Slavery Bill by contrast was mentioned in the UKSC (and Hounga in turn has been mentioned in evidence on the Bill this month).
I cannot be satisfactory for the law to be unfair dismissal claim fails becasue of illegality yet discrimination claim can proceed despite illegality. That is inconsistency across two jurisdictions and exactly the same facts might be deployed in both claims.
Thanks. I am fairly sanguine about a general principle that the same facts may produce different outcomes in different jurisdictions but accept that illegality has complexity heaped upon confusion, particularly if there may be some contractual claims (pay) and not others (UD) as the majority may be read as suggesting. As a side point, if the majority had engaged in individual exposition some of the points may have had greater light shone on them. It will be interesting to see what happens next.
The judgment ratio can be supported only on the basis of a remedy in tort/human rights doctrine rather than contract. If illegality is going to be thought always elusive, it is a recipe for the steady erosion of the ground of illegality in contract which in my humble view should not be allowed to happen barring the rarest of rare cases. Public policy considerations often have an echo in tort and tort remedies can be found by the Court rather than having the Supreme Court having to whittle down illegality doctrine in Contract so as to be doing justice.
If illegality is going to be thought always elusive, it is a recipe for the steady erosion of the ground of illegality in contract which in my humble view should not be allowed to happen barring the rarest of rare cases.
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References: UKSC 
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