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Work permit expiry should not have limited unfair dismissal compensation

14 October 2011 #Employment


In Ram v J D Wetherspoon PLC UKEAT/0080/11 the EAT considered the effect of the expiry of an employee`s work permit on damages for unfair dismissal, where the employee had applied for indefinite leave to remain in the UK.

The EAT has held that an Indian national who was unfairly dismissed before the expiry of his five-year work permit, should have been entitled to compensation for loss of earnings beyond the date of expiry.

Facts

In December 2004 JD Wetherspoon was issued a work permit entitling it to employ Mr Ram for 5 years. On 11 January 2005, Mr Ram was granted leave to enter the UK, expiring on 11 January 2010 to work for JD Wetherspoon.

Mr Ram was unfairly dismissed during the final year of his work permit. The tribunal had held that he was only entitled to compensation for loss of earnings up to 11 January 2010, the date his work permit expired, as it would have been illegal for the respondent to employ him beyond that date and so had capped his compensation.

The claimant appealed. He had applied for indefinite leave to remain, which entitled him to remain in the UK pending the outcome of his application. The initial application was refused but after a series of appals, he was given limited leave to remain with permission to work until September 2011.

The claimant argued before the EAT that the effect of his application for indefinite leave was to extend the period during which he could lawfully have been employed by the respondent had he not been unfairly dismissed.

Mr Ram’s appeal was upheld by the EAT. It noted that his right to work for the respondent was also extended as a result, and so his compensation should not have been capped in the way it had been by the tribunal. The EAT outlined that an application for indefinite leave to remain, made before the current leave expires, has the effect of extending the applicant`s leave pending the outcome of the application (section 3C, Immigration Act 1971).

The issue was whether the tribunal had been right to take the view that the application extended the claimant`s leave but not his right to work. The EAT held that the tribunal had been wrong, and that the claimant`s application extended his leave to remain on the same terms as before.

Implications

The case clarifies that, when assessing compensation for dismissal of a migrant worker under the work permit scheme (or, by analogy, the new points-based sponsorship system) loss of earnings should not be assessed according to the duration of the work permit or sponsorship certificate if the applicant has made an in-time application for indefinite leave to remain.

Clarkslegal, specialist Employment lawyers in London, Reading and throughout the Thames Valley.
For further information about this or any other Employment matter please contact Clarkslegal's employment team by email at employmentunit@clarkslegal.com by telephone 020 7539 8000 (London office), 0118 958 5321 (Reading office) or by completing the form on this page.

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