Illegally, she worked as a home help for the first Respondent (Mrs Allen) in London for a period of 18 months. The plan had been suggested to Miss Hounga by Mrs Allen’s brother when Miss Hounga was working in the same capacity in Nigeria at the age of 14 years. By way of inducement, Mrs Allen promised to pay Miss Hounga £50 per month in addition to providing room and board and to arrange for her to attend school in England. Once in the UK, Miss Hounga was never paid any money, nor was she permitted to attend school. Instead, during the course of her employment, Miss Hounga was regularly subjected to serious physical abuse and threats from Mrs Allen that if she left the house she would be sent to prison because her presence in the UK was illegal. Her employment was ultimately terminated one evening when Mrs Allen beat Miss Hounga and threw her out of the house.

Employment discrimination law and tort law

Only Miss Hounga’s claims of discrimination on the ground of race, defined as her nationality, ultimately made it to the Supreme Court. Both the Employment Tribunal and the Employment Appeal Tribunal had found that Miss Hounga’s discrimination claims were not barred by illegality, though, on appeal by the Allens, the Court of Appeal disagreed. Despite a fascinating split in the Court’s reasoning (between a majority comprising Lord Wilson, Baroness Hale and Lord Kerr and a minority consisting of Lord Hughes and Lord Carnwarth), the Supreme Court unanimously held that the claimant’s discrimination claims were not barred by illegality.

In so holding, the Supreme Court acted in the spirit of National Coal Board v England [1954] AC 403 where it was remarked that cases where an action in tort had been defeated by the defence were exceedingly rare. Hence the Supreme Court ensured that employment discrimination law did not stray from the ordinary principles of tort law.

The “context test”

In arriving at his Lordship’s conclusion on behalf of the majority, Lord Wilson analysed the tests that courts have historically applied in order to determine whether tort claims are barred by illegality. These were the “close connection” test, the “public conscience test”, the “reliance test” and the “inextricable link test.” Yet, ultimately, the majority effectively rejected the strict application of any one of these tests in favour of what I call the “context test”. This requires tribunals and courts to ask themselves whether the illegality forms no more than the setting for the respondent’s unlawful discrimination and what outcome is dictated by the competing public policy considerations associated with the illegality bar falling or not.

Some may argue that “context” is no more than the flip-side of the close connection or inextricable link tests. That is, where there is an insufficiently close connection or an absence of an inextricable link between the claimant’s illegality and her claim, the claimant’s illegality must be no more than the context for the respondent’s unlawful discrimination. This may go some way to explaining why the headnote in the Weekly Law Reports refers to the Supreme Court applying the close connection or inextricable link tests. In fact, Lord Wilson writes, at paragraph 40: “If, indeed, the test applicable…is that of the inextricable link...”. This, combined with his Lordship’s focus upon whether the illegality formed no more than the context in which Mrs Allen then perpetrated the acts of discrimination upon Miss Hounga, tends to undermine this argument.

What then does the “context test” require Tribunals and courts specifically to consider in determining whether a claimant’s claim is barred by illegality? The majority judgment in Hounga suggests that a court must first ask itself whether the claimant’s illegality preceded the discrimination (context usually comes before that for which it is the setting). If the “context” enquiry is satisfied, a court must next ask itself whether the employer’s own illegality was antecedent to or bound up with the claimant’s. If the answer to both of those enquiries is in the affirmative, it will not lie in the mouth of the respondent to assert that a claimant’s claim is barred. This conclusion may be supported by wider considerations such as, in this case, the UK’s international obligations in relation to bringing an end to forced labour and providing effective remedies for victims. Naturally, the common law defence of illegality should be interpreted and applied consistently with the UK’s international obligations. (See questions posed by Lord Wilson at paragraph 44 of his Lordship’s judgment which can provide a useful guide to considering the wider public policy issues in any given case.)

Cases where the response to the first enquiry is in the affirmative but the second in the negative will prove a more fertile ground for dispute.

Relevance of Hounga to respondent-employers

While Hounga represents a great victory for vulnerable claimants, it also has the potential to be deployed by savvy respondents.

The sense of there being a paucity of cases where the illegality defence bars tort claims appears to derive from examination of historical actions where the contract between the claimant and respondent was illegal. It is perhaps easy to understand how an illegal contract would bar a claim for breach of that contract while not barring an action in tort. But what of the situation where a claimant’s illegality consists of a tort or breach of contract and the claimant complains of a later tort committed by the respondent? That is, what of the claimant who commits a tort for which he is then dismissed and seeks to bring a claim for unfair dismissal?

Typically, where claimants fail on wrongful dismissal claims and succeed on unfair dismissal claims, respondents make arguments designed to obtain a reduction in the amount of compensation they would otherwise be required to pay. But they are still stuck with the finding that they unfairly dismissed the claimant. In the wake of Hounga however, it may be possible for the illegality defence to be invoked in such situations at the liability stage to prevent a finding of unfair dismissal.

Illegality is not limited to cases where the claimant’s conduct was criminal. It extends in principle to other reprehensible or grossly immoral conduct in any circumstances where it would not be proper to afford the claimant a remedy for her injury: see Kirhkam v Chief Constable of Greater Manchester Police [1990].

Take the claimant who is lawfully employed by a local authority and is dismissed for sexually harassing a colleague. He brings claims for both wrongful and unfair dismissal (contractual and tortious claims, respectively). The Tribunal finds that he was not wrongfully dismissed (that is, he did it) but that he was unfairly dismissed. The latter finding is based on the respondent having failed to postpone the investigation interview and the disciplinary hearing until the claimant had recovered from an illness so that he could participate more fully in these stages. Even if his conduct was not criminal, it was, surely, reprehensible. It was also illegal in the sense of being a breach of his contract of employment and a tort committed against his harassed colleague. It was the claimant’s own conduct that brought on the need for disciplinary proceedings to be commenced against him in the first place.

Of course, it is arguable that the claimant’s reprehensible conduct was merely the context or setting for the respondent’s unfairness. If this be the case, his claim for unfair dismissal would not be barred by illegality. But take account of the results of the second enquiry and the competing public policy considerations and the situation takes on a slightly different complexion.

The claimant’s illegal conduct occurred before any illegal act on the part of the respondent. His illegal act is arguably worse than the respondent’s – he sexually harassed a colleague and did so while being paid public money. This, in turn, caused more public money to be wasted in management time spent on lengthy disciplinary proceedings. All the respondent did was fail to postpone certain stages in the disciplinary proceedings. But had it not so failed, given the Tribunal’s finding in relation to the wrongful dismissal claim, the respondent would not have arrived at any different conclusion. Surely, in bringing a claim for unfair dismissal, the claimant is seeking to profit from breaching his contact of employment and from his own tortious act?

Finding, in such circumstances, that the claimant’s claim for unfair dismissal is barred by his own reprehensible and illegal conduct would seem all of a piece with authorities that hold (sensibly) that a dismissal will not necessarily be unfair where an employer could have concluded that adopting a fairer procedure would have been “utterly useless” because the outcome would have been precisely the same (see Duffy v Yeomans & Partners [1995] ICR 1; Polkey v AE Dayton Services Ltd [1988] AC 344).