Tribunal Draws Distinction Between Illegal Working & Equality Act Liability
A recent Employment Tribunal decision has highlighted the complex relationship between UK immigration enforcement and workplace discrimination law, after a hotel worker who did not have permission to work in the UK succeeded in disability, race and sex discrimination claims despite the tribunal finding her employment was unlawful.
In Ms E C L Ong v Yatson & Co Ltd*, the tribunal held that the claimant knowingly worked in the UK without permission and that her contract of employment was ‘tainted by illegality’. As a result, her claims for unfair dismissal, unpaid wages, notice pay and holiday pay were dismissed.
However, the tribunal also concluded that several discrimination claims under the Equality Act 2010 could still proceed because they were not “inextricably linked” to the illegal working arrangement itself.
For employers, the case is an important reminder that illegal working does not necessarily eliminate wider employment law exposure, particularly where allegations involve discriminatory treatment, workplace vulnerability or abuse of power within the employment relationship.
Summary of the Case
According to the tribunal’s findings, Ms Ong travelled to the UK from Malaysia on a visitor visa before beginning work at a hotel in Ambleside operated by Yatson & Co Ltd.
The arrangement reportedly involved no formal contract of employment, no Certificate of Sponsorship or work visa having been arranged before work began and no payroll documentation.
Tribunal findings refer to discussions about arranging a future ‘work permit’ after the claimant had already started working.
The tribunal found that the claimant worked at the hotel for approximately 36 days in a financial manager and receptionist role, before bringing multiple claims, including automatic unfair dismissal, unpaid wages and holiday pay, disability discrimination, race discrimination and sex discrimination.
Tribunal Findings
The tribunal ultimately dismissed all contractual and dismissal-related claims because of the illegality of the working arrangement.
However, several Equality Act claims succeeded, including a disability discrimination claim linked to housekeeping duties aggravating the claimant’s asthma, a race discrimination claim relating to the claimant being told there was a company policy requiring her to provide her passport copy before arrears of pay would be released, and two sex discrimination claims relating to delayed or unpaid wages affecting female staff.
The tribunal dismissed a number of other discrimination allegations.
The most significant legal aspect of the judgment is the tribunal’s distinction between contractual employment claims and Equality Act claims.
Employment Judge Dennehy found that the claimant knowingly participated in working without permission and that the contract was therefore tainted by illegality, a finding which prevented the claimant from pursuing claims which depended directly on the unlawful contract itself, including:
- unfair dismissal
- notice pay
- holiday pay
- arrears of wages
However, the tribunal separately considered whether the discrimination allegations were sufficiently connected to the illegal conduct to prevent the Equality Act claims proceeding.
Relying on authorities including Hall v Woolston Hall Leisure, Hounga v Allen and Patel v Mirza, the tribunal concluded that the successful discrimination claims were not “inextricably linked” to the illegal working arrangement.
The judgment reflects a long-standing public policy principle within discrimination law. Courts have repeatedly recognised that if workers with irregular immigration status were excluded entirely from statutory workplace protections, employers operating outside the lawful system could potentially avoid liability for discriminatory or exploitative conduct simply because the underlying employment was unlawful.
The tribunal therefore distinguished between contractual claims arising directly from the illegal working arrangement and statutory discrimination protections under the Equality Act 2010, and this distinction ultimately proved decisive in the case.
The judgment also repeatedly returned to the wider compliance context surrounding the working arrangement, including visa discussions, right to work checks and payroll arrangements, and identified concerns regarding aspects of the respondent’s evidence and compliance practices, including the absence of documented right to work processes and inconsistencies in the respondent’s position during the proceedings.
Implications For Employers
The wider significance of the case is the growing overlap between immigration compliance and mainstream employment law risk.
Many employers still approach illegal working primarily as a recruitment-stage document issue. In reality, once an organisation moves outside compliant recruitment, sponsorship and payroll systems, the legal exposure rarely remains confined to immigration enforcement alone.
What may begin as a failed right to work check can quickly evolve into wider scrutiny of workplace practices, payroll arrangements, accommodation arrangements, equality obligations and management conduct. The risks become even greater where workers are financially or practically dependent on the employer for accommodation, immigration stability or income.
The judgment is also a reminder that tribunals are often reluctant to allow employers to rely entirely on their own unlawful arrangements as a defence to discrimination allegations. Where discriminatory treatment is viewed as sufficiently separate from the illegality itself, Equality Act liability may still arise despite the underlying immigration breach.
At the same time, the case also reinforces that illegality remains highly significant. The tribunal had no difficulty dismissing the claimant’s contractual employment claims once it concluded both parties knowingly participated in unlawful working.
DMS Perspective
The Ong judgment reflects the broader position of how illegal working cases are increasingly viewed by tribunals and regulators.
Historically, some employers treated illegal working primarily as an immigration compliance issue carrying civil penalty risk. Increasingly, however, enforcement bodies examine the wider reality of the working relationship itself, including recruitment practices, payroll transparency, accommodation arrangements, dependency on the employer and whether unequal or exploitative treatment may have occurred.
This alters the risk landscape for employers; once compliant recruitment and payroll safeguards break down, scrutiny can rapidly extend into discrimination law, workplace governance, reputational risk and broader regulatory exposure.
The judgment also reinforces a point many organisations continue to underestimate: discovering that a worker lacks permission to work does not automatically neutralise employment law liability. In some circumstances, particularly where the surrounding facts suggest vulnerability or discriminatory treatment, it may increase wider scrutiny instead.
At the same time, the case also demonstrates that illegality still carries major legal consequences. The tribunal dismissed the claimant’s unfair dismissal, wages and holiday pay claims precisely because the contract itself was unlawful. The judgment therefore reinforces both sides of the legal framework simultaneously: immigration breaches remain serious, but Equality Act obligations do not necessarily disappear alongside them.
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* The case appears on the HMCTS Employment Tribunal database as Ms E C L Ong v Yatson & Co Ltd, case number 2411704/2023. Remedy proceedings are listed for June 2026.
