Dismissal over mistaken belief about immigration status: Klusova v London Borough of Hounslow

Klusova v London Borough of Hounslow

An employer’s genuine, but mistaken, belief that continuing to employ a foreign national would breach immigration legislation was capable of amounting to “some other substantial reason” for the purpose of defending an unfair dismissal claim.

Facts Ms Klusova is a Russian national who was granted leave to remain in the UK until May 2004. She had been employed by Hounslow Council since November 2000. In August 2005, the council dismissed her, believing that her continued employment contravened immigration legislation. It did not follow any dismissal procedures, and later argued that these did not apply because the dismissal was for breach of a statutory restriction.

However, at the time of her dismissal, Klusova had in fact been entitled to work in the UK. She had applied to the Home Office for further leave to remain, and was entitled to work pending that application. The confusion arose because in March 2005, Klusova had been detained by the police for immigration offences, and was released conditionally on her not taking up employment. Hounslow received a copy of the form that set out this condition.

Klusova brought an unfair dismissal claim. The tribunal found that her dismissal was automatically unfair, as there had been no restriction on Hounslow employing her, and the dismissal procedures had not been followed. Hounslow appealed and the Employment Appeal Tribunal overturned the decision. Klusova appealed to the Court of Appeal.

Decision The Court of Appeal was satisfied that Klusova had made a valid application for leave to remain before her visa expired, and that she could work until that application had been determined. Conditions imposed by an immigration officer following her detention could not cancel her entitlement to work while her application was being considered.

However, the court accepted that the council genuinely believed Klusova’s continued employment would breach a legal restriction. The fact that it had failed to consult her about its concerns and had not followed relevant guidance did not alter that outcome. The council had made enquiries with the Home Office and received information that suggested it could not continue to employ her.

This genuine but mistaken belief amounted to a potentially fair reason for dismissal (“some other substantial reason”), but in this case, the dismissal was unfair because the council had not followed dismissal procedures.

Key implications An employer can dismiss an employee who is working illegally on the ground that the employment breaches a statutory restriction. The statutory dismissal procedures do not apply to such a dismissal. However, employers can only rely on this ground for dismissal where there has been an actual breach of immigration legislation.

In many cases, it will be difficult for the employer to be 100% certain of the immigration position. In this case, the employer had received official notification that the employee could not work in the UK, but that turned out to be incorrect.

The alternative, and safer, option is to dismiss for “some other substantial reason”, on the basis that the employer believes the employee is working illegally. The mere fact this belief turns out to be incorrect will not make the dismissal unfair, as long as the belief is genuine. However, an employer relying on this alternative ground for dismissal must follow a fair procedure before dismissing, which includes complying with the statutory dismissal procedures. A failure to do so will make the dismissal automatically unfair.

Annabel Mackay, associate, Addleshaw Goddard

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