Hounslow London Borough Council v Klusova: [2007] EWCA Civ 1127

CA: Mummery, Laws and Morre-Bick LJJ: 7 November 2007

The claimant, a Russian national, was granted limited leave to remain in the United Kingdom in May 1999 for five years, and was lawfully entitled to work by reason of that limited leave. She began employment with the respondent council in November 2000. In March 2004, prior to expiry of her leave to remain, she made an unsuccessful application for indefinite leave to remain, and she made a further application on the same day as her limited leave to remain expired. Before determination of the latter application, and, following inquiries, with an office of the immigration service situated within the borough, by the council as to her right to work, the applicant was arrested in March 2005 and detained by immigration officers, being released a few days later subject to residence and reporting conditions and an express condition preventing her entering employment. The council was then informed that pending the outcome of her application she was allowed to undertake employment, and the claimant resumed working for the council. In July 2005, having been told that the claimant was prohibited from taking employment, the council asked the claimant for documentary proof of her right to work, and, when her solicitors wrote referring to her pending application for indefinite leave to remain without supplying further documents, the council dismissed the claimant without following the statutory dismissal and disciplinary procedures, as it considered that the claimant could not continue to work because of statutory restriction and it was entitled to dismiss her pursuant to section 98(2)(d) of the Employment Rights Act 1996. On the claimant's complaint of unfair dismissal, the employment tribunal found that the claimant had made a valid application for leave to remain which had not been determined when the council dismissed her; that there was no statutory contravention in her continued employment, and, accordingly, section 98(2)(d) did not apply; and that the dismissal was also unfair under section 98A because the council had failed to follow the prescribed procedures for dismissal. The Employment Appeal Tribunal allowed an appeal by the council, finding that there was no material to show the claimant had made a valid in-time application for leave to remain, and that, further, the council had a genuine belief she could not continue in employment without contravening a statutory enactment, which amounted to “some other substantial reason” for dismissal for the purposes of section 98(1)(b).

The claimant appealed.

The Court of Appeal held:
(1) A person, lawfully in the United Kingdom under a limited right to remain and entitled to undertake employment, who made a valid application to extend his leave to remain before it expired, was permitted to continue in employment when the leave expired pending determination of his application, and an immigration officer had no power to counter or cancel such entitlement to work while the application was pending. The employment tribunal had sufficient evidence to find that the claimant had made a valid application within time thereby extending the period during which she could continue to work. Accordingly, the employment tribunal had been entitled to reject the council's reliance on section 98(2)(d) of the Employment Rights Act 1996.
(2) It was reasonable and proper to infer, from the uncontradicted evidence of the council's inquiries prior to its dismissal of the claimant and the response to those inquiries, that the council genuinely believed that its continued employment of the claimant would contravene statutory restrictions, but, though that was “some other substantial reason” to justify the dismissal within the meaning of section 98(1)(b) of the 1996 Act, the council's failure to follow the required statutory procedures for dismissal made the claimant's dismissal automatically unfair under section 98A.

The appeal was allowed.

Appearances: Parishil Patal (Walkers, Hounslow) for the claimant; Jonathan Cohen (Solicitor, Hounslow London Borough Council) for the council.