In the Caldera mine there are slaves, slave are illegal to the Empire right? It is an Imperial Mine, does the fact that it is in Morrowind exempt it from that?

Since slavery is legal in Morroiwnd, they can get away with using slaves.
Keep in mind that the mine is operated by House Hlaalu for the empire. Imperials themselves do not work there, and likely turn a blind-eye at the fact that slaves are being used.
Hlaalu have no qualms at all about using slaves, especially when the profit is this great.

Ok good to know. Thanks for the answer.

Yeah, slavery isn't really a big deal in Morrowind. The Dunmer are more relaxed with human rights laws than the Imperials.

Only where Khajitt and Argonians are concerned

Then you haven't been to Telvanni territory, where there are a few special cases of non-beast-race slaves. The Imperials granted Morrowind a lot of internal autonomy, including the right to retain slavery, in exchange for its surrender and support in the war against the Altmer at that time. That doesn't mean that the Imperials have to like it, or to not complain about it, but they've got no legal right to stop it.

There are quite a few slaves in the fields in the Ascadian Isles region, which is Hlaalu territory, as well as in a couple of mines. Although the Hlaalu are the most accommodating to Imperial wishes, they still use slaves where "expedient", although the overall house stance is probably mixed over the issue. Other Great Houses, particularly Telvanni and Dres, insist on their right to do so with fanatical determination.

the slaves are mining ebony i thought trade in ebony was illegal in the empire?

it is, but I've never heard of anyone getting pinched for it

ST

It's not illegal to mine it. It's illegal to sell it except through the official channels (i.e. the East Empire Company, which has a monopoly on the trade). House Hlaalu has a joint agreement with the Empire to mine ebony in Caldera.

Haha. True.