Source: All England Reporter
Publisher Citation: [2006] All ER (D) 167 (Mar)
Court: Employment Appeal Tribunal

Judge McMullen QC

Representation Peter Goodbody (instructed by Ricksons, Preston) for the first employee.
  Peter Goodbody (instructed by DLA, Liverpool) for the second employee.
  Matthew Smith (instructed by Halliwells LLP, Manchester) for the employer.
Judgment Dates: 3 November 2005


Employment - Contract of service - Legality - Provision calculated to deceive revenue authorities - Employer raising defence to claims for unfair dismissal that contracts tainted by illegality - Whether employment tribunal chairman entitled to find contract not illegal and tribunal having jurisdiction to hear substantive claims.

The Case

It was settled law that in cases where the contract of employment was neither entered into for an illegal purpose not prohibited by statute, the illegal performance of the contract would not render the contract unenforceable unless, in addition to knowledge of the facts which made performance illegal, the employee actually participated in the illegal performance. The central question was therefore whether there was not simply knowledge but also participation.

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