The recent judgment in the case of San Ling Chinese Medicine Centre v Lian Wei Ji, says that an employee’s work permit must have actually been revoked in order for their contract of employment to be tainted with illegality. A contract will not be illegal merely because circumstances exist that could potentially lead to the employee’s work permit being revoked.

In making this finding, the Employment Appeal Tribunal has followed the recent judicial trend of narrowing an employer's ability to rely on illegality as a defence against unfair dismissal claims.

In this case the employee was pressured by her employer to state that she was paid less than the salary declared for her work permit. However, it was held that a contract of employment may remain valid even if an employee is working for less salary than that stated in a work permit application.

The result of this decision is that employers will not be able to prematurely argue that an employee’s contract is illegal. Up until a work permit expires or is actually revoked, employers cannot use “illegality” as a potentially fair reason for dismissal.