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Can an employee bring claims under a contract that has been illegally performed?

Where an employee has entered into a contract of employment, knowing it is being illegally performed, they are generally prevented from bringing claims under it, such as unfair dismissal. The same goes for an employer, so they can’t enforce areas such as confidential information.

However, in a recent case, the Claimant was not prevented from bringing claims by a historic period of illegality in the performance of a contract.

She had worked from March 2007 to May 2017. Up to July 2014, she was paid gross, having agreed to be responsible for paying tax on her earnings, which she failed to do. From July 2014, her employer started to make deductions from payments to cover income tax and NI. On appeal, her claims for wrongful and unfair dismissal were allowed on the basis that the period of illegality had ended from July 2014, when her employer started to make the correct reductions.

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