Sanctions law prevented maternity pay: dismissal claim struck out
A housekeeping assistant's unfair dismissal claim was struck out because UK sanctions on the company's owner made it illegal to pay her. The tribunal said the claim had no reasonable prospect of success.
1 min read · Last updated 19 May 2026
Case details
- #pregnancy-maternity
- #sanctions
- #strike-out
- #no-reasonable-prospect
- #breach-of-contract
Key facts
- The claimant was employed as a housekeeping assistant from 16 March 2021.
- She started maternity leave in November 2021 and was paid discretionary maternity pay of £1,500 per month until February 2022.
- Sanctions were imposed on the respondent's owner, Mr Fridman, on 15 March 2022, and on the director, Ms Zairova, on 13 April 2022.
- The respondent could not pay the claimant without committing a criminal offence due to the Russia (Sanctions) (EU Exit) Regulations 2019.
- The respondent's application for a licence to pay non-security staff was refused by OFSI and upheld by the High Court.
- The claimant's employment ended on 10 March 2023.
Timeline
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Employment started
Claimant commenced employment as a Housekeeping Assistant at Athlone House.
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Maternity leave started
Claimant began a 12-month period of maternity leave.
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Maternity pay agreed
Respondent agreed to pay £1,500 net per month discretionary maternity pay.
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Sanctions imposed on Mr Fridman
Mr Fridman became a designated person under the Russia (Sanctions) Regulations.
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Sanctions imposed on Ms Zairova
Ms Zairova became a designated person.
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OFSI licence issued for basic needs
Licence permitted basic needs allowance but not payments to non-security staff.
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OFSI refused licence for household staff
Application for licence to pay non-security staff was refused.
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Employment ended
Claimant's effective date of termination.
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Strike-out hearing
Employment Judge McNeill KC heard the respondent's application to strike out the claims.
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Judgment issued
All claims struck out as having no reasonable prospect of success.
The legal issue
Whether the claimant's claims for unfair dismissal, sex discrimination, and breach of contract could succeed when the respondent was prohibited by UK sanctions law from paying her wages or maternity pay.
The outcome
The tribunal struck out all the claimant's claims at a preliminary hearing, finding they had no reasonable prospect of success.
The key reason was that the respondent, Athlone House Limited, was owned and controlled by designated persons under the Russia (Sanctions) (EU Exit) Regulations 2019. This made it a criminal offence for the company to pay the claimant without a licence from OFSI. The company had applied for a licence but was refused, and the refusal was upheld by the High Court.
No compensation was awarded as the claims were struck out before trial.
Lessons & takeaways
- If you are dismissed because your employer is legally prohibited from paying you (e.g., by sanctions), you may have no remedy in the employment tribunal.
- A tribunal can strike out a claim at an early stage if it has no reasonable prospect of success, saving time and costs.
- Employers facing a legal prohibition on payments should document their efforts to obtain licences and communicate the situation clearly to employees.
- Claims for discrimination or breach of contract will fail if the employer's actions were driven by a legal requirement, not by a discriminatory motive.
This case shows how external legal obligations can override normal employment protections. The claimant, a housekeeping assistant with two years' service, was on maternity leave when UK sanctions were imposed on the company's owner and director. From March 2022, the company could not lawfully pay her wages or the discretionary maternity pay it had agreed.
What the employer could have done differently
The company did apply for a licence from OFSI to pay non-security staff, but was refused. It also challenged that refusal in the High Court without success. In these circumstances, there was no realistic alternative — the company was simply unable to pay without committing a criminal offence. The tribunal noted that the claimant's dismissal was 'inevitable' once the sanctions regime applied.
Why the result matters
This case is a reminder that employment rights are not absolute. Where a genuine legal prohibition prevents an employer from meeting its obligations, the tribunal may find that a dismissal is fair or, as here, that the claim has no reasonable prospect of success. For employees in similar situations, the only potential remedy may lie outside the employment tribunal — for example, by challenging the sanctions decision through judicial review or seeking compensation from the government.
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