An employee working under an illegal contract may be prevented from relying on statutory or contractual employment rights. As far back as 1978, it was held that it was against public policy for employees with illegal contracts to pursue an unfair dismissal claim. The position as to discrimination claims is less clear. The cases are more fact sensitive as in the case of Hall v Woolston Hall Leisure Ltd  the Court of Appeal held that discrimination claims will only be barred for illegality where it arises out of, or is so inextricably linked with, the employee’s illegal conduct that the Tribunal cannot permit the employee to recover compensation without appearing to condone the illegal conduct.
Subsequent cases illustrated that lying about your immigration status to obtain employment can bar you from pursuing a discrimination claim arising out of that employment (Vakante v Addey and Stanhope School ) or living and working illegally in the UK (even at the behest of her employers) barred a claim for race discrimination since she relied on the circumstances of her illegal employment to support her discrimination claim in Hounga v Allen .
In a recent EAT case, Wijesundera v Heathrow 3PL Logistics Ltd, the EAT held that the employee who did not have a valid work permit was not prevented by illegality from pursuing claims regarding the sexual harassment she suffered as a job applicant and as an employee. This was because there was no issue of illegality before her employment commenced as she did not need a work permit to apply for employment and the harassment during employment was not inextricably linked to the illegal contract, as there is nothing intrinsic about being an employee that leads to sexual harassment or freedom from it (Hounga was distinguished from this case). She was however prevented from bringing a claim that her dismissal was discriminatory as that claim was intrinsically linked to the illegal employment contract.