Hounga v Allen & Anor [2014] UKSC 47

A young Nigerian woman was trafficked to the UK, employed illegally by Mrs Allen as a home help, abused, and violently dismissed. The Supreme Court held the illegality defence did not defeat her race discrimination claim regarding dismissal, restoring her compensation.

Facts

Miss Hounga, a Nigerian national aged approximately 14 at the material time, was brought to the UK in January 2007 pursuant to a plan orchestrated by Mrs Allen’s family, in which Miss Hounga knowingly participated. She entered the UK using a false identity and a six-month visitor’s visa obtained by deception. She then lived in Mrs Allen’s home in Hanworth for 18 months, working as an unpaid home help caring for Mrs Allen’s children, despite having no right to work or (after July 2007) to remain in the UK.

The Employment Tribunal found that Mrs Allen inflicted serious physical abuse on Miss Hounga and threatened her with imprisonment if she left the house and was found by the police. On 17 July 2008, following an incident in which Mrs Allen beat Miss Hounga, threw her out, poured water over her, and told her to leave and die, Miss Hounga was effectively evicted and dismissed. She spent the night in the garden and was later found in a supermarket car park.

The Tribunal upheld only her complaint of unlawful discrimination in relation to the dismissal itself (on grounds of nationality) and awarded £6,187 for injury to feelings. The contract claims (unfair dismissal, unpaid wages, etc.) were dismissed on illegality grounds. The Court of Appeal set aside the discrimination award, holding that the illegality of the employment contract was inextricably linked with the discrimination complaint.

Issues

The central issue, as framed by Lord Wilson, was:

In what circumstances should the defence of illegality defeat a complaint by an employee that an employer has discriminated against him by dismissing him contrary to section 4(2)(c) of the Race Relations Act 1976?

Arguments

For Mrs Allen

The illegality of the contract of employment was inextricably linked to the discrimination complaint, and upholding the complaint would condone the illegality. Miss Hounga was a willing participant in the illegal contract and her complaint depended on the vulnerability arising from her illegal immigration status.

For Miss Hounga

The statutory tort of discrimination was not inextricably linked with her immigration offences; the illegality merely provided the context. Furthermore, she was a victim of trafficking and public policy against trafficking, reflected in international instruments to which the UK is party, required that her complaint be heard.

Judgment

Lord Wilson (with Lady Hale and Lord Kerr)

Lord Wilson reviewed the authorities on the illegality defence in tort, including National Coal Board v England, Saunders v Edwards, Tinsley v Milligan, Stone & Rolls Ltd v Moore Stephens, Cross v Kirkby, Hall v Woolston Hall Leisure Ltd, and Vakante v Governing Body of Addey and Stanhope School (No 2). He noted the difficulties with the reliance test and the inextricable link test, observing that the latter is inherently subjective.

Applying the inextricable link test, Lord Wilson considered the link was absent: entry into the illegal contract and its operation provided no more than the context in which Mrs Allen perpetrated the discriminatory dismissal.

More fundamentally, Lord Wilson asked what aspect of public policy founded the defence, drawing on McLachlin J’s judgment in Hall v Hebert, that the illegality defence exists to preserve the integrity of the legal system. He concluded that the award did not permit Miss Hounga to profit from wrongdoing, evade any criminal penalty, or encourage others to enter illegal contracts. Conversely, applying the defence would encourage employers like Mrs Allen to exploit illegal workers with impunity.

Additionally, Lord Wilson considered the UK’s obligations under the Palermo Protocol, the Council of Europe Convention on Action against Trafficking, and Article 4 ECHR (citing Rantsev v Cyprus and Russia, Siliadin v France, and CN v United Kingdom). He concluded Mrs Allen’s conduct was at or very close to trafficking, and that public policy against trafficking strongly militated against applying the illegality defence.

Lord Hughes (with Lord Carnwath)

Lord Hughes agreed the appeal should be allowed but on narrower grounds. He held that the illegality defence in tort rests on two connected principles: the law must act consistently, and there must be a sufficiently close connection between the illegality and the claim. On the facts, Miss Hounga’s immigration offences merely provided the setting or context for the statutory tort, so the defence did not bar the claim.

However, Lord Hughes declined to rely on the trafficking-based public policy reasoning. He held that international instruments on trafficking do not provide any automatic defence, nor do they require English law to permit recovery of damages for the statutory tort of discrimination by reference to trafficking. There was no finding that Miss Hounga was compelled to commit her immigration offences.

Implications

The decision restored Miss Hounga’s award of £6,187 and remitted her pre-dismissal harassment complaint to the Employment Tribunal.

The case is significant for clarifying that the illegality defence will not automatically defeat a statutory discrimination claim merely because the underlying employment contract is illegal. Where the illegality merely provides the context or setting for the tort, rather than being inextricably linked to it, the defence will not apply.

Lord Wilson’s judgment goes further, grounding the outcome in the public policy considerations underlying the illegality defence and in the UK’s international obligations regarding trafficking. However, Lord Hughes (with Lord Carnwath) expressly declined to endorse the trafficking-based reasoning, meaning that the trafficking analysis does not command a clear majority ratio.

The decision matters particularly to vulnerable workers, including trafficked persons and those with irregular immigration status, who suffer discrimination or exploitation at the hands of employers. It signals that such workers are not necessarily precluded from statutory tort remedies by their own immigration illegality.

The judgment leaves unresolved a fully coherent theoretical basis for the illegality defence, with the Justices expressly acknowledging the difficulty of formulating a general test. It also does not disturb the application of the illegality defence to contract-based claims (unfair dismissal, wages), which remained dismissed. The scope of the decision is therefore confined to statutory torts where the illegality forms only the context of the wrong.

Verdict: Appeal allowed. The Court of Appeal’s order was set aside and the Employment Tribunal’s award of £6,187 compensation for injury to feelings arising from discriminatory dismissal was restored. The complaint of pre-dismissal harassment on grounds of race or ethnic or national origins was remitted to the Employment Tribunal.

Source: Hounga v Allen & Anor [2014] UKSC 47