Recently there was a decision in the Court of Justice of the European Union in Case C-311/18 – Data Protection Commissioner v Facebook Ireland Ltd and Maximillian Schrems.
The CJEU has confirmed how EU standards of data protection must travel with the data when it goes overseas, which means this judgment has wider implications than just the invalidation of the EU-US Privacy Shield. It is a judgment that confirms the importance of safeguards for personal data transferred out of the UK.
First of all, I would like to explain what did the Court rule in its judgement. In the case of Data protection commissioner v Facebook Ireland Ltd and Maximilian Schrems, the Court examined the validity of the European Commission’s Decision 2010/87/EC on Standard Contractual Clauses (“SCCs”) and considered that it is valid.
However, that validity, the Court added, depends on whether the 2010/87/EC Decision includes effective mechanisms that make it possible, in practice, to ensure compliance with the level of protection essentially equivalent to that guaranteed within the EU by the GDPR and that transfers of personal data pursuant to such clauses are suspended or prohibited in the event of the breach of such clauses or it being impossible to honour them.
As a conclusion, the Court stated, that the 2010/87/EC Decision imposes an obligation on a data exporter and the recipient of the data (the “data importer”) to verify, prior to any transfer, and taking into account the circumstances of the transfer, whether that level of protection is respected in the third country concerned, and that the 2010/87/EC Decision requires the data importer to inform the data exporter of any inability to comply with the standard data protection clauses, and where necessary with any supplementary measures to those offered by that clause, the data exporter then being, in turn, obliged to suspend the transfer of data and/or to terminate the contract with the data importer.
The Court also examined the validity of the Privacy Shield Decision, as the transfers at stake in the context of the national dispute leading to the request for preliminary ruling took place between the EU and the United States (“U.S.”). The Court considered that the requirements of U.S. domestic law, and in particular certain programmes enabling access by U.S. public authorities to personal data transferred from the EU to the U.S. for national security purposes, result in limitations on the protection of personal data which are not circumscribed in a way that satisfies requirements that are essentially equivalent to those required under EU law, and that this legislation does not grant data subjects actionable rights before the courts against the U.S. authorities. Because of such a degree of interference with the fundamental rights of persons whose data are transferred to that third country, the Court declared the Privacy Shield adequacy Decision is invalid.
What does this mean for you?
If you are or were transferring data internationally, you are no longer able to rely on the Privacy Shield rule, and in order to transfer data to the US would need to check whether you can do so under the conditions laid down below.
Please note that further work is underway by the European Commission and EDPB to provide more comprehensive guidance on extra measures you may need to take. In the meantime, you should take stock of the international transfers you make and react promptly as guidance and advice become available.
The EDPB has recommended that you must conduct a risk assessment as to whether SCCs provide enough protection within the local legal framework, whether the transfer is to the US or elsewhere. The receiver of the data may be able to assist you with this.
US Citizenship Renunciation And Its Tax Consequences: US citizenship has been always considered as a privilege. The country created by immigrants always had one of the best opportunities for entrepreneurs around the world and was one of the most desirable destinations. But despite that, in the modern world of tight fiscal policies and tax transparency, an increasing amount of US citizens are deciding to relinquish their citizenship because of tax reasons.
Despite the highest citizen renunciation fee in the world, at $2,350, and possible tax consequences, every year around 7,000 US citizens decide to renounce their citizenship. This amount has been steadily increasing every year since 2010 when the Foreign Account Tax Compliance Act (FATCA) became law.
Under US law, all US citizens and legal permanent residents (green card holders) are subject to US federal income tax regardless of their location, residence, place of living and source of income. US legislation defines these people as US persons. All US persons have to file an annual US tax declaration even if they permanently live and have income in another country and do not receive any income from the US sources. Apart from the US, Eritrea is the only country in the world which imposes the same exterritorial tax liability for its citizens.
Most US persons who live and pay tax outside the US use a foreign tax credit. This means they pay usual tax in the country of their current residence and, in cases where the US tax rate for this income is higher, they have to pay the exceeded amount of the tax to the US government. In other words, they always have to pay tax at least at US federal rates. In the case where their current country of residence has higher tax than the US, they forfeit that amount of overpaid tax. However, the credit can be carried forward. Also, it is important that foreign tax credit cannot be used at all with the tax paid in certain sanctioned countries detailed in section 901(J) of US Internal Revenue Code and currently including Iran, North Korea, Sudan, Syria and, with some exceptions, Libya.
The Special US Expatriate Income Tax Regime
The special tax regime arises on a non-resident basis when an individual expatriates from the United States by surrendering their US citizenship or terminating US permanent resident status. When this is done for tax avoidance purposes, the special expatriate tax regime will also apply.
In order to be a US permanent resident for US expatriate tax purposes, a foreign individual should be a lawful US permanent resident (a US person) and hold that status (a green card) for 8 of the last 15 tax years.
The special tax regime, however, is not applicable to a foreign national who was a US tax resident under the substantial presence test (the 183-day test). The US residence end date for such nationals is determined by the normal tax residence rules. This is applicable to foreign students or overseas workers, who spend several years in the US as US student or work visa holders and who leave the country without obtaining a green card.
There are two exceptions in the current US legislation, allowing US citizens to be beyond the scope of the special regime:
1. When an individual becomes a US citizen and citizen of another country at birth and still has citizenship of another country, is currently tax resident in such a country, and has been a US resident for not more than 10 taxable years during the previous 15-taxable year period, or
2. When a US citizen relinquishes US citizenship before attaining the age of 18.5 and has been a US resident for not more than 10 taxable years prior to the relinquishment date.
Tax Avoidance Test
In order to determine the applicability of the special expatriate tax regime, US legislation has a special tax avoidance test. The test has three conditions and, if any on them is met, expatriation is deemed to have been conducted in order to avoid US tax and that individual is called ‘covered expatriate’.
The first condition is met when the net worth of an individual at the date of expatriation or termination of residency is equal or more than USD2m.
The second condition is met when the average US federal income tax liability for the last five tax years preceding the tax year of expatriation or residency termination is equal or more than USD165,000, for individuals expatriating in 2018. This means that in 2018, the average will be calculated for 2017-2013 tax years. The threshold is subject to increase each year according to the inflation and published annually.
The last condition is when an individual fails to certify full compliance with all US federal tax obligations for the five years preceding the date of expatriation or termination of residency. This last condition means that if an individual failed to disclose any non-US income or bank account to the US tax authority, mistakenly or deliberately, this automatically makes him ‘covered expatriate’. Additional sanctions are also applicable for such non-compliance.
The expatriate tax is imposed on ‘covered expatriates’ in a mark-to-market way in the following manner: if all the assets and property of the individual are sold at their fair market value one day before the day he surrenders its citizenship or terminates his permanent resident status, the relevant gain or loss is subject to US federal income tax on a non-resident basis. This gain constitutes the taxable amount and is taxed at a 30 per cent rate.
In cases when a US resident-owned any property before the date of becoming a US resident, such property cannot be valued at less than its fair market value on the date of becoming a US resident.
The taxable gain can be reduced by a tax-free allowance in the amount of USD699,000 for 2017 and USD711,000 for the 2018 tax year. This allowance is subject to change every year, according to the inflation rates.
It is important to note that US citizens and residents who receive any gifts or bequests from US expatriates or who meet the tax avoidance test are subject to tax on the value of such gifts or bequests at the higher estate or gift tax rate on the date that they were received. Some gifts and bequests are exempt from tax such as gifts to governmental organizations and charities. Gifts between US and non-US spouses also have annual tax exclusion of USD152,000 for 2018. Also, there is no tax on a gift if the value of a gift is within the US annual tax gift exclusion. The annual tax gift exclusion for 2018 is USD15,000.
The Reed Amendment was added to the US Immigration and Nationality Act in 1996 in order to deny re-entry to the US of former citizens who have officially renounced their citizenship and who are determined by the Attorney General to have renounced their citizenship for the purpose of avoiding taxation. The author of the amendment was Jack Reed, the Democratic Party senator from Rhode Island.
The amendment was mainly targeted at wealthy Americans who wanted to expatriate from the US, stop being US taxpayers, and then to visit the US occasionally at their leisure without paying any taxes. The burden of proving tax avoidance lies on the US government and is not connected at all with the IRS tax avoidance test described above.
If the Department of Homeland Security determines that renunciation is motivated by tax avoidance purposes, the individual will be found inadmissible to the United States under the Immigration and Nationality Act. The US government hasn’t issued any regulations on how this law should be implemented in practice. According to the Department of Homeland Security, this law has been used only twice since its enactment in 2002 and 2015, and only two former US citizens have been denied entry the US. Moreover, the latter case was overturned when a former US citizen’s lawyer submitted a legal brief to the US Customs and Border Protection.
Contact Igor if you have questions about US Citizenship Renunciation And Its Tax Consequences.
+44 20 7822 8535
Especially in the government handling of Covid19, protection of its citizens and quick return to normalcy.
Never has there been so much emphasis placed on the importance of global mobility, further to the initial shock and disruption of Covid19, and the political and financial aftermath that has left us all searching for the return to normalcy. Most of us have waited anxiously to see the response by our government policy, and the steps taken to protect its citizens from the pandemic, during such unchartered territory. We have quickly come to realize, the importance of what we perhaps once took for granted, the stability of our country’s infrastructure, health system, and social security, as a means of protecting its’ citizens and preserving business, wealth and the economy.
Although there has been no formal global response policy to Covid19, it has swiftly become apparent that some countries governments have taken quick action to protect their citizens, whilst others have failed miserably. Such unprecedented times have also seen us highly dependent on media, for validity of government information and guidelines, so we now know how living in a country that allows for freedom of speech and a trusting government is paramount.
With countries like the USA now enforcing martial law where Black Americans and other immigrants are made feel unsafe, losing their human rights and liberties, and Hong Kong citizens feeling suffocated by the newly proposed controversial national security legislation announced by Beijing to tighten Chinese rule, completely overriding Hong Kong’s own legislative process, threatening their human freedoms and civil liberties. Also with other countries such as Russia enforcing public surveillance, with prominence of facial recognition fast expanding, where government authority is stamping down on public freedoms and monitoring social media, the threat of losing our freedoms seems to have become a greater fear than the fear of COVID19 itself, resulting in many HNWIs placing global mobility and citizenship by investment on the top of their agenda, with view to protecting their families, safeguarding their wealth and preserving it for future generations to come.
So why has Cyprus, such a small gem in the Mediterranean sea, received so much praise and attention during the pandemic, by those searching for dual citizenship or looking to relocate their family and wealth?
Cyprus is the 3rd. largest island in the Med, and is located at the eastern end of Europe, at the crossroads of three continents, Europe, Asia, and Africa.
Cyprus is known to have one of the lowest crime rates in the world and is considered to be one of the most attractive onshore tax regimes in the world, ranking 37th best country for business by Forbes in 2018, and 5th best relocation destination in the world, by Knight Frank. Having joined the European Union in 2004 and the Eurozone in 2008, Cyprus is deemed one of Europe’s rising stars, with a steady increase in GDP since the bank crisis of 2013, with its robust legal system based on English common law and transparent regulatory framework, with Cyprus’ banking system, now fully compliant with EU AML Directives. Cyprus is also OECD compliant, and has one of the most attractive corporation tax rates worldwide, of only 12.5% and many non-dom zero tax benefits, and has attracted many UHNWIs and HNWIs alike.
With the highest tertiary education % in the EU, and a highly educated
professional workforce, where English is the main business language, as well as other widely spoken languages including Greek and Turkish, Cyprus has received much interest from international firms and investors worldwide.
Cyprus also has a strong infrastructure with a free, efficient national health service (YESI), and some of the best ranking universities and private schools, with languages taught as part of the curriculum including Chinese and Russian.
Cyprus’ main industries include financial services, banking, shipping, tourism, R&D and telecoms, as well as emerging industries such as energy and natural gas exploration. The real estate sector has also accelerated over the last ten years, seeing a steady increase in house prices to their pre 2013 high levels.
All this combined with a high quality of life, some of the best blue flag beaches of the world, sunny weather all year-round and friendly people with diversity and inclusion of all religions, makes Cyprus a top Citizenship by Investment choice for many HNWIs and favourable relocation destination for many. With Europe having established itself as the most sought after region for high net worth investor immigration, Cyprus is now deemed the best Citizenship by Investment Programme (CIP) in the world.
Cyprus’ quick quarantine response to Covid19 and astute decisive action by economists, scientists and the Cyprus democratic government, has resulted in the island having one of the lowest fatality rates in Europe. Cyprus began lifting restrictions and returning back to normalcy in May, with the opening of the construction sector and public sector, with some schools resuming by mid-May, as well as private and public hospitals, and all citizen restrictions having been lifted by the end of May. From 1st June Cyprus hotels were open for business and Cyprus airports are to follow, with the reopening of international flights as from the 9 June, from selected low risk countries. Cyprus is proving an exemplary model country in pandemic management, taking successful measures resulting in quick returning back to normalcy, and has been praised for its quick recovery strategy, and shows optimism in its economic recovery.
Cyprus’ strong ethics in the importance family, education, wellbeing, business and innovation has held the country in good stead with amazing results. Therefore is a serious contender for someone evaluating their alternative citizenship application, dual passport, or a relocation destination.
The Cyprus Investment program offers the quickest route to a European passport obtained in approximately only 180 days. It is the only citizenship program offering such a simple and efficient way of obtaining dual citizenship.
Since 2013, the Cyprus Investment Program has attracted an investment of €6.6 billion. The Cyprus government has now lifted the 700 application cap, imposed earlier in the year, and is now more than ever committed to processing the CIP applications as quickly and efficiently as possible, providing they meet the eligibility guidelines and are fully compliant, as a means of boosting the country’s economy.
Eligibility requirements for the CIP include:
- The main applicant must be 18 years of age or above
- Have a clean criminal record
- Have no frozen assets within the EU, as a result of sanctions
- All applicants must have a Schengen visa
- The applicant must not have had a citizen application previously rejected by any other EU member state
- Politically Exposed Persons entrusted with a prominent public function in the last five years are not eligible to apply, even if they do not hold such function at the time of the CIP application;
- Adult applicants must visit Cyprus in order to provide biometrics for the permanent residency permit, which must be held for a minimum of 180 days, prior to citizenship been granted.
The main advantages of the CIP are as follows:
- Freedom to live, work and study anywhere in the 28 EU member states including over 172 countries worldwide, including Canada, Switzerland and the United Kingdom.
- A quick route to acquiring EU citizenship, as a means to relocate to the UK
- An easy process, with no language or medical testing
- All family members are eligible including spouse, children including adult dependants up to age 28 (prior to 29 birthday), and parents, even if over the age of 65
- No physical residency requirements to live in Cyprus, other than holding of the Residency permit for 180 days prior to citizenship being issued
- A better quality of life for the family, including excellent healthcare and education for children, access to top-rated universities
- Increased personal security and safety and enjoyment of freedoms with excellent lifestyle for all the family
- Attractive tax regime with zero tax for non-domiciled individuals, no dividend tax and no inheritance tax
- Citizenship is valid for life and can be passed on to your descendants
- The acquired assets can be sold after 5 years, other than the €500,000 primary residence which must be held for life, and the €150,000 government donation which is non-refundable
- Property investment can be rented and may yield between 3-5%. Real estate investment may also provide a guaranteed buy back option, at the end of the five year term (this may be available by some real estate firms)
The investment criteria starts from €2,150,000. The applicant may choose to invest in residential real estate or a combination of real estate and other investment investments as well as a non-refundable contribution.
The €2,000,000 investment option, must be made in residential real estate investment (plus VAT if applicable), as well as a non- refundable government donation of €150,000.
An investment of €2,500,000 can be made, in a combination of real estate and/or other investment instruments such as AIFs, or investment in Cyprus companies as well as a non-refundable government donation of €150,000.
The government donation involves a non-refundable contribution of €75,000 to the Government Research and Development fund and €75,000 to the Land Development Organisation, in both options.
The investor may choose to sell the primary residence to the value of €500,000 and replace with another at any time, and should they wish their parents to be added to the application they can do so without any additional investment other than the purchase of their own primary residence to the value of €500,000 plus VAT.
Jenny Tryfonos Consultancy can assist you with Cyprus investor immigration services. Being of Cyprus descent, living in the UK and speaking the Greek language fluently, Jenny works with trusted local Cyprus lawyers and partners to protect the interest of her clients, ensuring that their needs are met every step of the way, keeping them informed throughout the application process and giving clients peace of mind, from start to successful acquisition of their Cyprus passport. Through her trusted advisory network, other HNWIs services offered include relocation, property acquisition, tax structuring, banking, trusts, and Cyprus company formation services, making your Cyprus experience complete and hassle free.
For a better visual idea on what Cyprus has to offer, check out the video Cyprus-The real return on investment
For further information on the Cyprus Investment Program, feel free to email email@example.com or send a WhatsApp or Telegram request to Jenny Tryfonos, so you can discuss your requirements further, in strictest confidence, or call +44 7 305 966 531.
How do electronic signature platforms work?
There are simple platforms that allow you to sign documents and deeds. All the signatories will access the documents via a link. After the parties sign a document, the platform will receive core information such as the signatory’s email address, IP address, date and time of access. When all the signatures are complete, the document is saved as a read-only PDF. Even if any changes to it are made, later on, there will be highlights to them.
The validity of a contract that has been signed electronically
For the contract to be valid in common law there is a need to establish offer, acceptance, consideration and intention to be bound. The question arises whether an electronic signature can actually represent an intention to be bound. The platforms usually indicate that in order to agree to contact, a person needs to apply their signature into a special box. Therefore, the signature from the platform, if used together with other supporting documents, is sufficient evidence of an intention to be bound by the contact.
The validity of a deed that has been signed electronically
For the deed to be valid in common law it must be in writing, expressed to be a deed, delivered a deed (usually electronic delivery suffices) and executed as a deed. The deed has to be witnesses in order to be executed. Although there is no statutory law that would shed a light on the issue, the Law Commission has issued a report into electronic signatures. The first finding is that the combination of different legal instruments shows that electronic signature usually meets all the statutory requirements. Second, an electronic signature can actually be witnessed. Witnesses can see the signature of the other person and add their signature as well. However, there is still a requirement of the physical presence of the witness.
Where electronic signature will not be valid
- Documents that need to be registered at Land Registry (electronic signatures do not meet statutory requirements)
- Documents executed by foreign companies
The validity of an electronic signature
There is a body of case law that establishes that the contract is valid if entered into by the exchange of e-mail. Therefore, it can be assumed that if a typewritten signature was sufficient then the court will not find an electronic signature through a platform to be invalid.
We, therefore, conclude that the contact and a deed that otherwise fulfil all the criteria but were signed digitally would fulfil the criteria for validity. Especially, the Courts are likely to take into account the fact that at the moment physical signatures do not seem to be feasible since most of the organisations are closed. However, as there is no case law or statutory law, electronic signatures for deeds will always entail an amount of risk. Therefore, if it is possible then we advise using physical signatures for deeds.
The information above is provided for reference only. Please consult with our specialists prior to taking any actions, as every situation is different.
You can contact us on:
07 305 966 531
Businesses are looking to reduce their bills in response to more people self-isolating at home.
While some send their employees to work from home maintaining their wages, others take advantage of lay-offs and reduced working hours.
Although there is general guidance available to employers, we suggest you seek legal advice before taking any actions and changing employees’ terms. Otherwise, you may face fines and costly tribunal hearings.
What about 0-hours workers?
0-hour workers cannot be suspended from work without a mutual agreement. If you decide to do so, you are opening up your company to claims. Otherwise, the right to suspend should be clearly stated in the contract.
Can I make employees stay home for a period of time on a reduced pay?
As an employer, you require a contractual right to do so and will need to follow the contract change process. You must also seek agreement from employees. Be transparent about why you have to do so and what employees can expect in the future, including redundancies.
What is lay-off?
Lay-off is when you as an employer take an employee off work at least for one working day due to lack of work.
Lay-off can trigger redundancy if it lasts for 4 weeks in a row, is more than 6 weeks within a 13-week period. In this case, an employee may opt for redundancy, and therefore, will be eligible for a redundancy payment.
Statutory lay-off pay: up to £29 a day for five days in any three-month period – so a maximum of £145.
If you have to make your workers redundant, you have to follow the redundancy procedure.
Find out more about your rights by contacting us.
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According to the Acas advice, every employee or worker is eligible for any SSP (Statutory Sick Pay) in they need to self-isolate and thus stay home due to: having coronavirus or its symptoms, if someone in their household has coronavirus or its symptoms, or if they have been told to self-isolate by NHS 111.
However, as an employee you must tell your employer you are unable to work as soon as you can, provide with the reason why, and also let them know for how many days you are likely to be absent. Your employer should be flexible about you providing evidence from doctors, as you may not be able to get a sick note while you are self-isolating.
«By law, medical evidence is not required for the first 7 days of sickness. After 7 days, it is for the employer to determine what evidence they require, if any, from the employee. This does not need to be fit note (Med 3 form) issued by a GP or other doctor» –
Agency, casual and zero-hours workers can get SSP if they meet the eligibility conditions, namely:
- they earn on average at least £118 per week before tax;
- they’ve told their employer about their condition within any deadline the employer has set or within 7 days.
Recently the UK government has decided that everyone with taking sick leave/self-isolating due to coronavirus or its symptoms is eligible for a sick pay from day 1 If you are, however, self-employed, or earn less than £118/week, according to the Budget, you can “more easily make a claim for Universal Credit or Contributory Employment and Support Allowance”: “For the duration of the outbreak, the requirements of the Universal Credit Minimum Income Floor will be temporarily relaxed for those who have COVID-19 or are self-isolating according to government advice, ensuring self-employed claimants will receive support”, you will be able to claim Universal Credit “without the current requirement to attend a job centre if they are advised to self-isolate”.
Still have your questions or worried? Let us know by contacting us. Just send us a message here, or reach out to firstname.lastname@example.org. 07 305 966 531 is available to those who prefer messengers.
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A new case – 3 Jan 2020
On what kind of beliefs can an employee claim discrimination?
Most people are aware that it is unlawful to discriminate on grounds of gender, race or nationality, religion or belief, sexual orientation or disability.
An employment tribunal within the last week re-affirmed a fundamental principle of the Equality Act 2010, namely that the concept of ‘belief’ is not confined to just the Abrahamic religions, or any other religions, as some would have us believe!
‘Belief’ includes any philosophical belief, provided it is held genuinely and seriously, and includes, as in this case decided on 3rd January 2020, veganism. The claimant here was a vegan who believed that this was the reason that he had been victimised in the course of his employment. The employee had ethical objections to the way in which his employer behaved.
Of course, vegetarianism is included as well, as is, for instance, atheism and agnosticism and paganism. No belief has any privilege over any other – which I would say is exactly what you would expect in the law in a modern civilised secular society.
Senior Employment Solicitor
If you need expert advice on an employment issue, contact our consultant employment solicitor:
Kuldeep Clair – 07484 614090 or email@example.com
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Just on Friday, a prominent new case was reported in the news involving equal pay.
It is prominent because it involved a claim by a well-known BBC journalist, Samira Ahmed, against her employer, on the basis that she had been underpaid for several years, for presenting one programme, amongst others. Her equal pay ‘comparator’ or rival BBC male journalist, was Jeremy Vine. Salary figures at the BBC had been made public as a matter of policy, and these showed that Mr Vine had been paid at a rate considerably more per programme, even though they both have been similarly experienced in their fields – over 25 years or so.
Of course, the BBC attempted to offer an alternative explanation for this disparity to the employment tribunal, but it was not accepted by the tribunal on the facts before it. The programmes in question were very similar and required similar skills. If the opposite had been accepted, the case would not have succeeded. Samira Ahmed’s success means that she will receive back pay for perhaps six years amounting to a six-figure sum. Six years is the maximum period for which an employee can claim back pay in an equal pay claim.
Our senior specialist employment solicitor, Kuldeep Clair comments, “I have found that claims for equal pay commonly turn on the ability of an employer to provide an explanation for the difference in pay. This can be difficult, but sometimes an explanation may not even be necessary, because the work simply is not easily ‘comparable’ at all. So there can be potential problems in both bringing and defending claims, unless you have expert professional representation.”
Kuldeep dealt with an equal pay claim last year for a claimant which was settled for a substantial five figure sum. He was opposed by a prominent City firm, defending a national hospitality company. “The defence initially put forward by the employer was essentially the same”, says Kuldeep, “namely, that my client’s work was of a different nature and could not be compared to the dozen male managers who occupied comparable positions to her. But they had a change-of-mind two weeks before the tribunal hearing date, when they realised the strengths of my client’s claim.”
Kuldeep goes on to note that this year it is exactly 50 years since the introduction of the Equal Pay Act 1970, which was a turning point in anti-discrimination legislation. “We have now moved forwards a long way since the days when women were expected to either stay at home and do the dishes, or at most possibly expect to take menial work at whatever pittance of a rate was offered to them without any argument.”
For advice on any employment issue, Kuldeep Clair can be contacted on 07484 614090 or firstname.lastname@example.org
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The general rule is that it’s illegal to work for an employer after the employees working visa has expired. The employee will no longer be able to bring a breach of employment contract claim against his employer due to the defence of ‘illegality’ of contract.
The case of Okedina v Chikale  EWCA Civ 1393 held that there are some circumstances in which an employment contract can still be enforceable despite breaching an immigration rule.
The claimant, Ms Chikale, and the respondent, Mrs Okedina, are both Malawian nationals. The claimant was granted a 6-month visa to work as a nanny for the respondent. Little did the claimant know, her visa was granted based on false information given by the respondent. The respondent goes further by letting the claimant stay and work in the UK even after her visa expired. Few months after, the claimant is earning £200 per month. The respondent dismissed the claimant after she requested more money.
The respondent’s defence of illegality was denied by the court. Great emphasis was placed on the fact that the claimant was innocent the whole time, and she was not aware that she has been working illegally.
In many cases, the balance of power in an employment relationship often tip in favour of the employer rather than the employee hence why vicious employers exploit workers by depriving them of their rights often becoming victims of trafficking.
If you think that your employer is depriving you of your employment rights, immediately contact our lawyers in Sterling Law, a Legal 500 firm based in London.
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+44 7 305 966 531
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