‘Shockingly’ underpaid domestic worker wins unfair dismissal claim

Following an extraordinary 8-year legal battle, a domestic worker paid a dismal 33 pence per hour has succeeded in a claim against her employer for unfair constructive dismissal.

Background

In Mruke v Khan [2018] EWCA Civ 280, the Claimant brought claims for failure to pay minimum wage and holiday pay, the denial of rest breaks, direct and indirect race discrimination and harassment and unfair constructive dismissal.

The Claimant was black African and came to the UK from Tanzania to work in the Respondent’s home supporting her 2 disabled children. The Respondent had previously lived in Tanzania. The Claimant was paid £10 per month (33 pence per hour) and made various other allegations as to her treatment.

The case had a long procedural history (the claims were originally filed in 2010). A criminal trial had arisen from the same facts as the employment claim, delaying matters for some years. That was followed by a successful appeal against conviction and a retrial that ended with the Respondent being acquitted.

The Employment Tribunal decision

The Employment Tribunal allowed the Claimant’s claims for unpaid wages, failure to pay minimum wage, holiday pay and failure to provide rest breaks and adequate living space but rejected the Claimant’s claims for direct race discrimination on the basis that the reason for the ill-treatment was because of the Claimant’s low social status, not because her Tanzanian nationality.

The Claimant’s constructive unfair dismissal claim failed because:

1. She had not provided the Tribunal with any specific reason for leaving her employment and therefore the Tribunal was not satisfied that she resigned in response to the Respondent’s failure to pay her National Minimum Wage;
2. The Claimant was not aware of her entitlement under the National Minimum Wage Act 1998 and therefore she could not have resigned in specific response to the Respondent’s failure to pay it to her.

The EAT decision 

The EAT upheld the conclusions of the Employment Tribunal, but added some observations about taking a more flexible approach to the question of why an employee resigned. Where an employee had been treated so badly that the employee must have resigned because of it, the reason for their resignation may be obvious, even if it is unstated.

The Court of Appeal judgment

On the Claimant’s appeal to the Court of Appeal against the dismissal of the Claimant’s claims for direct race discrimination and constructive unfair dismissal, the Court reached a threefold conclusion:

1. The reason why the Respondent had employed the Claimant was due to her socio-economic characteristics (of being uneducated, illiterate and poor). As her nationality was separable from her economic status (§ 45), this meant that the ill-treatment she was exposed to did not amount to discrimination on the basis of nationality. This is in line with the recent guidance from the UK Supreme Court in Taiwo v Olaigbe [2016] UKSC 31, where, in a case involving similar abuse of domestic workers, the court rejected the argument that discrimination on the grounds of immigration status equated to unlawful discrimination on the basis of ‘nationality’ for the purposes of EA 2010. The Claimant’s discrimination claim failed for the same reasons given by the Tribunals;
2. The Employment Tribunal was wrong to reject the Claimant’s claim for a breach of the implied term to pay her the National Minimum Wage. The purpose of the National Minimum Wage 1998 (described by the Court as ‘social legislation’) was to protect workers who are vulnerable to exploitation due to their illiteracy and/or ignorance of their legal rights, including those recruited from overseas (§ 73). The Claimant was clearly a prime example of the type of employee who required such protection. That purpose had to be given full effect and it was wrong for the Tribunal to hold the Claimant’s ignorance of her legal rights against her by rejecting the argument that she resigned in response to the Respondent’s failure to pay her properly;
3. In a constructive dismissal case, even where a Claimant does not specifically state the reasons for leaving their employment, a Tribunal may conclude that the Claimant must have resigned due to the employer’s conduct, particularly where that conduct is ‘egregious’ or the collection of acts are obviously or ‘shockingly’ bad (§§ 82 to 84). This was so, despite the fact that the evidence here suggested that the Respondent’s withholding of pay had kept the Claimant in her employment (because she could not afford to run away and support herself) rather than driven to leave her employment (§ 77). On this rare occasion, the Tribunals’ conclusions to the contrary were overturned as ‘perverse’.

Outcome

The Court of Appeal dismissed the Claimant’s appeal against the Tribunal’s rejection of her race discrimination claim but allowed the Claimant’s appeal against the Tribunal’s rejection of her unfair constructive dismissal claim.

Due to the passage of time and the lack of anything to suggest that the dismissal had been fair, the Court of Appeal substituted its own judgment that the Claimant had been unfairly dismissed.

Comment 

Mruke is a significant case, not least because of the shocking practices it has exposed. The Court of Appeal adopted a common-sense and relatively flexible approach to the requirement of causation in a constructive dismissal claim where there has been serious abuse by an employer against a highly vulnerable employee.

Mruke clarifies that it is not necessary for an employee to know about their legal rights or that a specific piece of legislation has been breached in order to resign and claim constructive dismissal.

The Court also recommended that ‘social legislation’ designed for the benefit of persons who are unlikely to be aware of their legal rights must be interpreted in a way that advances the intentions behind the law. That is a welcome principle that could potentially apply across a spectrum of claims for basic employment rights. The effect of this principle ought to be kept in mind by advisors for both employers and employees where disputes arise. Taking an overly technical approach in cases involving serious abuses of basic employment rights may prove to be a high risk strategy if it ignores the underlying injustice of the case.

The protracted history of the case, and the rejection of the Claimant’s discrimination claims highlight the particular difficulties in accessing legal remedies faced by domestic workers and victims of trafficking subjected to exploitation.