High Court dismisses labour claims against undocumented migrant for substantively illegal employment contract.

Neutral Citation Number: [2012] IEHC 364

THE HIGH COURT

[2012 No. 194 J.R.]

BETWEEN

AMJAD HUSSEIN

APPLICANT

AND

THE LABOUR COURT

RESPONDENT

AND

MOHAMMAD YOUNIS

NOTICE PARTY

JUDGMENT of Mr. Justice Hogan delivered on 31st August, 2012

1. The treatment of migrant workers is a vexed one which poses considerable difficulties with regard to the regulation of the labour

market and the enforcement of public policy. The Oireachtas must, of course, regulate the labour market by specifically deterring

illegal immigrants from taking up employment, as failure to do so could have serious medium term implications for both employment and

immigration policy. If, however, that legislation is applied in a rigorous and unyielding manner it might have serious consequences for

vulnerable migrants who found themselves exploited by unscrupulous employers. The nature of the legislator's dilemma is well

illustrated by the facts of the present case.

2. Both the applicant and the notice party are Pakistani nationals and are in fact second cousins. The applicant operates at least one

Pakistani restaurant in Ireland and Mr. Younis, the notice party, claims that he was recruited by the applicant, Mr. Hussein, in

September 2002 to work here as a tandoori chef when the latter returned to Pakistan for a holiday. Although Mr. Younis arrived in

Ireland in the summer of 2002, he does not speak English and he seems to have had no real contact with the Irish community. Mr.

Younis' contention is that he was grievously exploited by his cousin when he arrived in Ireland. He maintains that he was required to

work seven days a week with no holidays (save for one month in September 2009) which was unpaid. Mr. Younis contends he was

paid what amounted to pocket money in cash and that his employer had failed to regularise his position with the relevant authorities,

including the Revenue Commissioners. It is averred on his behalf that these matters only come to his attention in December 2009,

whereupon he resigned from his employment and then set in train a series of claims under the Terms of Employment (Information) Act

1994, the Organisation of Working Time Act 1997 and the National Minimum Wage Act 2000. It is these claims which form the

background to the present judicial review proceedings.

3. Mr. Hussein strongly disputes these contentions. He says that Mr. Younis had a work permit under the Employment Permits Act

2003 ("the Act of2003") for the period between July 2002 and July 2003, but that he never had a work permit after that date. Mr.

Hussein maintains that Mr. Younis thereafter effectively lived with him as a member of his extended family. He also says that Mr.

Younis was fully aware of the necessity to have a work permit and that this came to light when the latter sought unsuccessfully to

avail of amnesty for undocumented workers operated by the Department of Enterprise and Employment in December 2009.

4. For his part, Mr. Younis says that that he resided with other employees in a form of work hostel provided by the applicant in Leixlip.

He further contends that he relied completely on his cousin, Mr. Hussein, in relation to both his employment permit, taxes and

passport. By way of example, he claims that when his Pakistani passport expired in 2006, Mr. Hussein retained both his new and old

passport, saying that he needed both documents for the purposes of obtaining a work permit. Mr. Younis says that he only became

aware of the true position when Mr. Hussein's wife (who speaks English) brought him to the Migrants' Rights Centre in August 2009

whereupon his rights and entitlements were explained to him. This set in train a series of events which culminated in his resignation

from employment and the making of these complaints.

The Labour Court determination

5. At all events, Mr. Younis made a formal complaint against Mr. Hussein on 30th April2010 under the terms of the Terms of the

Employment (Information) Act 1994 (as amended), the Organisation of Working Time Act 1997 and the National Minimum Wage Act

2000.A Rights Commissioner initially found for Mr. Younis in respect of all three complaints by decision of 31st March 2011. Mr. Hussein

was not represented at that hearing and he did not pay the sums which the Commissioner had directed him to pay.

6. The complaints were then referred to the Labour Court by Mr. Younis on 24th June 2011. The findings (and, by implication, the

reasoning) of the Commissioner were then upheld in two separate decisions dated 7h September 2011 and 9th September 2011.

7. So far as the 1994 Act is concerned, the Commissioner had found that Mr. Hussein had not been provided "with any formal

documentation in relation to his employment over an extended period of time" as required by s. 3 of the Act. Mr. Hussein was awarded

€1,500 compensation to be payable for breaches of that Act.

8. So far as the 1997 Act is concerned, the Commissioner found that Mr. Younis had evidenced "breaches by the respondent in

relation to the provision of annual leave entitlements, the provision of public holiday entitlements, the concept of working in excess of

48 hours per week and the failure to provide Sunday premiums and proper breaks." The Commissioner directed that Mr. Younis be

awarded the sum of €5,000 in respect of breaches of the 1997 Act.

9. So far as the 2000 Act, the Commissioner awarded Mr. Younis the sum of €86,132.42 in respect of back pay. It would seem

inferentially from the terms of the determination that the calculation was based on underpayments from September 2002.

10. Mr. Younis' solicitor wrote on several occasions to Mr. Hussein seeking payment of some €91,134 in accordance with the Labour

Court determination and advising that failure to comply would result in an application to the Circuit Court for enforcement ofthe

award. Mr. Younis then commenced Circuit Court proceedings on 2nd February 2012, with the motion returnable for 20th February

2012. That motion was adjourned to 1ih March 2012 as it would seem there were difficulties in effecting service on Mr. Hussein.

11. Mr. Hussein then applied (and obtained) leave from this Court (Hedigan J.) to apply for judicial review on ih March 2012. It would

have to be said that Mr. Hussein's general conduct in this regard was not altogether satisfactory. He delayed and vacillated and his

persistent failure to respond to the quite legitimate requests of Mr. Younis' solicitor, Mr. MacGuill, was unimpressive. Certainly, it was

not too much to have expected the applicant (or his solicitor) to have corresponded with Mr. MacGuill prior to making an ex parte

application to this Court.

12. These considerations notwithstanding, the point now raised is so central and so vitally affects the integrity of the Labour Court

decisions (and, indeed, the Circuit Court whose enforcement jurisdiction has been so lately invoked) that it would not be appropriate

to find against Mr. Hussein on grounds of delay or unsatisfactory behaviour in the absence of irremediable prejudice to a notice party

such as Mr. Younis such as might have occurred if the compensation had already been paid to him and he had altered his position as

a result: see generally Eastern Health Board v. Farrell [200] 1 I.L.R.M. 446 at 449-450,per Geoghegan J. and Hillary v. Minister for

Education and Science [2004] 4 I.R. 333,per Ó Cáoimh J.

The effect of the Employment Permits Act 2003

13. At the heart of the applicant's case is that Mr. Younis has no standing to invoke the protection afforded by the employment

legislation of this State, since by definition any contract of employment was an illegal one in the absence of an employment permit.

So far as illegal contracts are concerned, the courts must, where possible, avoid applying too severe an approach, still less some

formalistic approach which assumes that the enforcement of an illegal contract always presents insuperable public policy objections:

see, e.g., the comments of Geoghegan J. in Downing v. O'Flynn [2000] 4 I.R. 383, 399. In some cases, however, the court has no

alternative but to hold that the contract in question is rendered substantively illegal by statute. This, as we shall see, is one such

case.

14. The key provisions of the 2003 Act (as substituted by s. 2 of the Employment Permits Act 2006) are to be found ins. 2(1) and s.

2(2)(as both substituted by s. 2 of the Employment Permits Act 2006), s. 2(3)(as amended by s. 3 of the Act of 2006) and s. 2(4)

which provides as follows:

"2.(1) A non-national shall not-

(a) enter the service of an employer in the State, or

(b) be in employment in the State,

except in accordance with an employment permit granted by the Minister under s. 8 of the Employment Permits Act 2006

that is in force.....

(2) A person shall not employ a non-national in the State except in accordance with an employment permit granted by

the Minister under s.8 of the Employment Permits Act 2006 that is in force..... .

(3) A person who contravenes subsection (1) or (2) or fails to take the steps specified in subsection (2B) shall be guilty

of an offence and shall be liable-

(a) on summary conviction, to a fine not exceeding €3,000 or imprisonment for a term not exceeding 12 months or

both, or

(b) if the offence is an offence consisting of a contravention of subsection (2) or a failure to take the steps

specified in subsection (2B), on conviction on indictment, to a fine not exceeding €250,000 or imprisonment for a

term not exceeding 10 years or both.

(4) It shall be a defence for a person charged with an offence under subsection

(3) consisting of a contravention of subsection (2) to show that he or she took all such steps as were reasonably open to

him or her to ensure compliance with subsection (2)."

15. There can be little doubt as to the general effect of these provisions: they prohibit a non-national from being employed without

the appropriate employment permit. Critically, this prohibition applies to both the employee (s 2.(1)) and the employer (s. 2(2)) and

breach of this prohibition is a criminal offence. It is, moreover, clear from the terms of s. 2(4) that while an employer can defend

criminal proceedings on the ground that he or she took all reasonable steps to secure compliance with the 2003 Act, no such defence

is available to the employee. Applying standard principles of statutory interpretation, therefore, one is compelled to hold that the s.

2(1) creates an absolute offence so far as an employee is concerned, since the very structure of the section in general - and s. 2(4)

in particular - is consistent only with the conclusion that the Oireachtas intended that a due diligence-style defence of an endeavour

to comply with the work permits requirement would be available to the employer only and not to the employee: cf by analogy the

reasoning of the Supreme Court in CC v. Ireland (No.1) [2006] 4 I.R. 1.

16. The very fact that the Oireachtas must be taken to have intended that a non- national employee to whom the prohibition applies

(i.e., non-EU and non-EEA nationals) automatically commits an offence if he or she does not have a work permit irrespective of the

reasons for that failure necessarily has implications so far as the civil law is concerned, in that such a contract of employment must

also be taken to be void. In other words, this is not simply a case of where there was some incidental illegality in the performance of

the contract: no one would, for example, suggest that a furniture delivery company could not sue to recover unpaid charges simply

because the delivery van had illegally parked outside the customer's house when delivering the furniture: cf here to like effect the

celebrated comments of Devlin J. in St. John Shipping Ltd. v. Joseph Rank Ltd. [1957] 1 Q.B. 267, 281. Nor can it be regarded as a

case where an illegality in the method of the payment of wages can be overlooked in the absence of evidence that the employees

themselves had knowingly participated in the illegality: see here the comments of Laffoy J. in Re Red Sail Frozen Foods Ltd. (in

receivership) [2006] IEHC 328, [2006] 21.R. 361, 370-373.

17. By contrast, in the present case the Oireachtas has declared that a contract of employment involving a non-national is

substantively illegal in the absence of the appropriate employment permit, so that, accordingly, a contract of this kind has been

expressly prohibited by statute. It would scarcely be a sensible construction of the Act of 2003 if it is admitted that such a contract

is expressly prohibited by statute and yet the courts permitted administrative bodies such as the Labour Court to give appropriate

remedies to the parties as if the contract were perfectly lawful. Specifically, in view of the fact that the s. 2(4) due diligence defence

is unavailable to an employee, one is coerced to the conclusion that the reasons for the employee's failure to secure a work permit

are irrelevant to that substantive illegality.

18. To my mind, therefore, the present case cannot be sensibly distinguished from the decision of the Supreme Court in Martin v.

Galbraith [1942] I.R. 37. Here the plaintiff sued to recover overtime payments which had been earned in circumstances where he had

worked in excess of a statutory prohibition contained in s.20 of the Shops (Conditions of Employment) Act 1938. Murnaghan J.

rejected the claim, saying ([1942] I.R. 37 at 54):

"Parties to a contract which produces illegality under a statute passed for the benefit of the public cannot sue upon a

contract unless the Legislature has clearly given a right to sue."

19. The 2003 Act was plainly enacted in the public interest and for the public benefit in order to regulate the employment market. It

may also be noted that the 2003 Act contains no saving clause such as obtains in the case of unfair dismissals. Section 8(11) of the

Unfair Dismissals Act 1977 (as inserted by s. 7(d) of the Unfair Dismissals (Amendment) Act 1993) accordingly provides that:

"Where the dismissal of an employee is an unfair dismissal and a term of condition of the contract of employment

concerned contravened any provision or made under the Income Tax Acts or the Social Welfare Acts 1981 to 1993, the

employee shall, notwithstanding the contravention, be entitled to redress under this Act in respect of the dismissal."

20. Of course, this type of saving clause as contained in the Act of 1977 - which is precisely the type of clause envisaged by the

Supreme Court in Martin - is directed to a situation where the contract of employment is not substantively illegal, but rather that a

term of the contract involved some fraud upon the public revenue in the manner of its performance. Here the case is much more

compelling, as it cannot realistically suggested here that the contract of employment was not substantively illegal, as, for the reasons

already given, to hold otherwise would be to ignore the substance and effect of both s. 2(1) and s. 2(2) of the Act of2003. There is,

moreover, no saving clause which might operate in favour of the employee in such circumstances by allowing him or her to seek

effective redress where the administrative agency in question was satisfied that the failure to obtain an employment permit was not

their personal fault.

Conclusions

21. In the light of these considerations, neither the Rights Commissioner nor the Labour Court could lawfully entertain an application

for relief in respect of an employment contract which is substantively illegal in this fashion. For those reasons, the decisions of the

Labour Court cannot be allowed to stand.

22. While this conclusion seems to me to be inescapable on the application of established legal principles, it is not a result which

yields much satisfaction.

23. If Mr. Younis' account is correct- and let it be recalled that both the Commissioner and the Labour Court found that it was - then

he has been the victim of the most appalling exploitation in respect of which he has no effective recourse. (In fairness to Mr. Hussein,

it should be pointed out that he was not legally represented at those hearings and it may be that a different picture would have

emerged if he had been so represented.) While I am bound to apply the policy as articulated by the Oireachtas via the 2003 Act,

there must be some concern that this legislation will produce (and, perhaps, has produced) consequences which were not foreseen or

envisaged. Specifically, it may not have been intended by the Oireachtas that undocumented migrant workers -not least a vulnerable

migrant such as Mr. Younis​ should be effectively deprived of the benefit of all employment legislation by virtue of his illegal status,

even though he or she may not be responsible for or even realise the nature of the illegality.

24. The constitutional principle of the separation of powers is designed to serve a purpose and is not simply a technical formalism.

While fully respecting the divisions which must necessarily exist between the legislative and judicial branches, a healthy dialogue

between those two branches can only serve the public interest. This must be so where a court judgment has important policy

implications and consequences which may not have been anticipated by the other branches of government. It is in that vein,

therefore, that I propose to transmit a copy of this decision to the Ceann Comhairle, the Cathaoirleach of the Seanad and the

Minister for Jobs, Enterprise and Innovation so that the Oireachtas may give consideration - should it think fit to do so -to the policy

implications for the 2003 Act as manifested in this judgment.