This week’s case roundup
Contract tainted by illegality
Soteriou v Ultrachem Ltd and others, All ER (D) 396, May 2002, EAT
Soteriou provided book-keeping services for an accountancy firm which he invoiced
in the name of his business, AGS Services. He was also VAT registered. In
November 1998, the contributions agency started an investigation into the firm
and its associated companies. Soteriou attended an interview with the DSS and
signed a statement which he knew to be false but which satisfied the DSS that
he was self-employed.
In October 2000 he withdrew this false statement following which his
relationship with the firm deteriorated, culminating in the ending of the
relationship in January 2000. Soteriou commenced a High Court claim and
tribunal proceedings alleging unfair dismissal. In response the firm argued
that he was either a full-time self-employed individual or, if he was employed,
the contract of employment was tainted by illegality in that he knowingly gave
fraudulent information to the Inland Revenue and contributions agency. The High
Court proceedings were stayed pending the outcome of the tribunal claim.
The tribunal held that as Soteriou had deliberately committed a fraud under
his contract he could not legitimately pursue a legal claim on that contract.
Soteriou appealed unsuccessfully.
As a matter of public policy the courts would not enforce an other-wise
valid contract which was tainted with illegality. Of particular relevance was
that Soteriou was not advised or pressurised into falsifying information but
for his own benefit, actively and knowingly participated in a deception with
the contributions agency.
Positive discrimination permitted
Lommers v Minister van Landbouw, Natuurbeheer en Visserij, EOR 105 2002
Lommers was a civil servant. His government department provided a limited
number of subsidised nursery places which were restricted to female staff only,
save for emergency cases. There was approximately one place for every 20 female
employees. After Lommer’s request for a nursery place was rejected he brought a
complaint that the exclusion of male staff, other than in emergencies, was in
breach of the Equal Treatment Directive.
The national courts found that the department’s policy could be objectively
justified and on appeal, the matter was referred to the ECJ for a preliminary
It held that although Article 2(1) of the Directive precludes sex
discrimination as regards access to employment, vocational training, promotion
and working conditions, Article 2(4) provides that measures intended to promote
equal opportunity or to remove existing inequalities which affect women’s
opportunities in the areas identified in Article 1(1) may be permissible. The
provision of nursery places was intended to reduce the number of female staff
(already massively under represented) leaving their jobs for reasons relating
to child care and so fell within Article 2(4). The policy did not breach the
Directive provided nursery places were available on the same conditions to male
staff who were single parents.