Labour Research November 2004

Law Queries

Illegal contract

Q: A worker in a small shop worked for five months without a written contract and received her wages in cash. When she told her employer that she was pregnant, he fired her. Is there anything that can be done?

A: If an employee is dismissed because she is pregnant, the dismissal is automatically unfair and there is no qualifying period of employment - so she can bring a claim even though she had worked in the shop for less than a year. She can also bring a claim of sex discrimination.

The fact that there was no written contract or that payment was in cash does not prevent someone from bringing a claim, unless it is an illegal contract. If her employer was not paying any tax or National Insurance and she was aware of this but did nothing to try to prevent it, this may make the contract illegal - with the result that she may not be able to enforce any of her rights under the contract.

If that is the case, she will probably not be able to claim unfair dismissal. However, she may still be able to claim sex discrimination, depending on the extent of her involvement.

The October 2004 issue of LRD's magazine Workplace Report contains details of the following cases concerning illegal contracts: Wheeler v Qualitydeep EAT/0998/03; Kaid v Gruppo EAT/0546/03; Vakante v Addey & Stanhope School, Case A1/2003/2753.