I have 2 people in my class right now who cannot read in their native
language.  Because I will have them only for a few months, I am teaching
them mostly oral English (What is your name, where do you live? body
parts, greetings etc.) and simple writing, like filling out forms,
addressing envelopes etc..  Going into phonics with 5 hours a week of
instruction, just doesn't fill the bill here. Other students in the class
help by using L1 when translations are needed. 

I also had a class of very bright Syrian people who did not want to be
taught in their native language.  They said they had a teacher from Syria
and learned little English because the teacher would speak in Syrian and
that made the class speak that way too.  They wanted a teacher who knew
no Syrian  (me) and never taught me any words in L1.  this way they had
to speak to me in English.

I think it all depends on the learner.  Some will learn better by
immersion and others need the L1.