Kelly v The University of Southampton – Can it really be unreasonable to dismiss an illegal worker?

Employers might be forgiven for believing that on discovering that an employee does not have the correct permissions to work for them or reside in the UK that the employment must be terminated with immediate effect or the employer will face immediate prosecution or even risk potential imprisonment! Therefore understandably procedural issues or consideration of the reasonableness test in relation to dismissal are often overlooked. This is however a risky and potentially costly assumption for an employer to make as the following case highlights.

The Facts

In the Kelly v the University of Southampton  UKEAT/0295/07 the EAT considered a claim for unfair dismissal by an employee who was dismissed because she no longer had leave to remain in the UK.

Dr Kelly is a US Citizen.  She was offered a position as a senior lecturer in the School of Biological Sciences by the University of Southampton. She accepted the offer of employment which was conditional on her fulfilling the necessary immigration requirements.

The University obtained the correct permission to employ her in this role for a 60 month period expiring on 31 December 2005.  In addition, Dr Kelly was granted leave to remain in the UK for 48 months until 8 January 2005.  Dr Kelly did not subsequently make the application for indefinite leave to remain in the UK or apply for her visa to be extended.

Dr Kelly informed the University’s personnel department about the imminent expiry of her visa on 5 January 2005. Initially, Dr Kelly was suspended without pay on 13 January and given until the 4 February 2005  to arrange for her visa to be extended.

On the 27 January 2005 the University wrote to Dr Kelly terminating her employment with effect from the 8 January 2005. The University did not follow any dismissal procedure and did not have any dismissal hearing or offer Dr Kelly the right of appeal.  

In the interim period Dr Kelly had applied for an obtained indefinite leave to remain in the UK, which was granted on 7 February 2005. Dr Kelly would have been legally entitled to live in the UK and work for the University or any other employer from that date onwards.  Dr Kelly’s union requested that she be reinstated however the University refused this.

Tribunal Findings

Dr Kelly claimed unfair dismissal. The University defended the claim on the basis that the employment was illegal as it contravened section 8 of the Asylum and Immigration Act 1996 and that the dismissal was therefore fair. 

The Tribunal upheld the dismissal and found that :

The reason for dismissal was breach of a statutory duty arising under section 8 of the Asylum and Immigration Act 1996 which is a potentially fair reason under Section 98(2) (d) of the Employment Rights Act 1996.  The statutory dismissal procedures do not apply where the potentially fair reason for dismissal is under Section 98(2) (d) Regulation 4(1) (f) of the Dispute Resolution Regulations 2004).  An employer is legally obliged and entitled to terminate an employment relationship that is not lawful.  Such action is within a range of reasonable responses under Section 98(4) of the Employment Rights Act 1996. The dismissal of the Claimant was not unfair.

Grounds of Appeal to the EAT

Dr Kelly appealed to the EAT on essentially two grounds. The first was that on true construction of Section 8 of the Asylum and Immigration Act 1996 Tribunal was wrong to conclude that it was a contravention of statute to employ her. If this was the case the statutory dismissal and disciplinary procedures (“SDDPs”)  would apply and her dismissal would be automatically unfair.

The second ground of appeal was that the Tribunal misdirected itself to the scope of section 98(4) of the Employment Rights Act 1996 (“ERA 1996”) or else failed to give adequate reasons for its decision. Dr Kelly argued that the requirement of reasonableness imposed under that section is not automatically satisfied by the mere fact that employment was illegal.

EAT Decision

The EAT upheld both grounds of Dr Kelly’s appeal.

In respect of the first it held that Dr Kelly was permitted to work under the Immigration Rules despite the expiry of her leave to remain and that the University did not commit a criminal offence by continuing to employer her. This meant that the University could not rely on the potentially fair reason for dismissal that Dr Kelly’s continued employment would contravene any duty or restriction imposed by or under any enactment. The University had not followed the SDPP’s and the dismissal was therefore automatically unfair.

The EAT considered the second ground of appeal in any event even though they had already held that the dismissal was unfair.

The EAT held that “contraventions of the law come in many shapes and sizes. Some are of the utmost seriousness and require immediate action; others are matters which can be readily put right for which  no prosecution is ever likely and no prosecution would ever be just. No doubt it will usually be reasonable for an employer to dismiss; but there is no automatic right to do so.”

In terms of procedure the EAT also held that even if it is reasonable to proceed speedily to dismissal, there is no reason why provision should not be made for an appeal. Failure to follow a reasonable procedure which would include offering the right of appeal may in itself make the employer’s action in dismissing the employee unreasonable unless the employer can establish that he would have dismissed if he followed a fair procedure.

In Dr Kelly’s case by the time any appeal would have been heard she would have obtained her indefinite leave to remain and the University would not have been able to argue that she would have been dismissed even if they had followed a fair procedure.

Conclusion

The facts of the Dr Kelly case are slightly unusual in that her work permit was issued for longer than her leave to remain. The fact that she had a valid work permit meant that technically the University were not employing her illegally. They would have been employing her illegally if the permit had expired. Nevertheless the case demonstrates that even if an employer suspects that an employee no longer has permission to work or be in the UK that it is important to give consideration to the procedure to be adopted when considering dismissal. Whilst each case should be considered on its facts at the very least an employer should always offer an appeal against the dismissal to deal with situations such as Dr Kelly’s where the breach of immigration rules can be remedied.