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Illegality of contract: Extent of participation in illegal contracts not considered

This report relates to 1 case(s)

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    Church and another v Bakersfield Entertainment Ltd [2006] All ER (D) 167 (Mar) (0 other reports)

In Bakersfield Entertainment Ltd v Church and Stuart EAT/0523/05, the EAT holds that the tribunal chairman erred in holding at a pre-hearing review that the individuals' contracts of employment were not illegal and that the tribunal had jurisdiction to hear the substantive claim, in circumstances where, as employee-directors of the respondent company, they had agreed to a scheme whereby a percentage of their salary was paid gross to fictitious service providers and not declared for tax and national insurance purposes. The employee-directors' claims were inextricably wound up in the contract. If the contract was illegal, they should not be permitted to enforce it if they had substantially participated in it, knowing that it was illegal.