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04 February 2014

Jurisdictional issues in Employment Law

Increasingly often, employment practitioners find themselves faced with a particular question:

Can my client bring their claim for unfair dismissal in the UK tribunals?

Of course, if the client is domiciled in the UK, and works here for a British business, the predicament will seldom arise. However, there are several instances when jurisdiction may be a live issue:

1. Where the employee is recruited abroad, or posted to work abroad, by a British business;

2. Where the employee works in the UK, for a company incorporated abroad;

3. Where an employee works between countries or at sea, such as naval workers, pilots and air hostesses.

The above are the 3 main examples, though there will be others, and all are fundamentally affected by whether or not the employee is a British national.

The Law in a nutshell

As we are principally concerned with claims for unfair dismissal, it must be established that the protection afforded by s.94(1) of the Employment Rights Act 1996, "s.94" applies to the prospective Claimant. Put another way, the prospective Claimant must have the statutory right not to be dismissed unfairly in order to properly bring their action.

Case law imposes the presumption that the place of employment is decisive, i.e. if the employee works in Britain, then they are afforded the protection of s.94 and thus can bring a claim for unfair dismissal in British Tribunals.

What if the Claimant lives or works abroad part of the time?

In the case of Ravat v Hailburton Manufacturing & Services Ltd [2012] 2 ALL ER 905, the Supreme Court said that,

"the question of fact is whether the connection between the cirumstances of the employment and Great Britain and with British employment law were sufficiently strong to enable it to be said that it would be appropriate for the employee to have a claim for unfair dismissal in Great Britain".

What if the Claimant does not live or work in England for any of their time at all?

In those circumstances, when determining jurisdiction, a similar test, the "Comparative Test" is carried out and the hurdle is higher. The factors pointing towards a connection with Great Britain are compared by the Tribunal with the factors pointing in favour of another jurisdiction.

What links will be sufficiently strong?

  • Persons, in law termed "peripatetic employees", who work between places, e.g. air hostesses, pilots, naval workers, but whose base is in Great Britain. Lawson v Serco Ltd [2006] ICR 250
  • Employees recruited in Great Britain and posted to work abroad for a business in Great Britain, e.g. a foreign correspondent of a British newspaper, a reporter from the BBC. Lawson v Serco Ltd ante.
  • Expatriate employees of a British employer operating in an extraterritorial British enclave. E.g. Civilians working in military bases, or British Embassies. Lawson v Serco Ltd ante.
  • School teachers employed by the Ministry of Defence or the British Government - Ministry of Defence v Wallis 2011] ICR 617; Duncombe v Secretary of State for Children, Schools and Families (No 2) ICR 1312
  • An employee who lives in Great Britain but commutes to another country to work for a company based in Great Britain. (Where commuting expenses are paid by the employer and the contract of employment purports to grant the protection of UK law) Ravat v Hailburton Manufacturing & Services Ltd ante.

 

A weak link

I recently acted for a Singapore national, C, who was recurited in Singapore to work for a British company incorporated in London. C worked between Singapore, Malaysia and Russia. C's business activites never caused him to travel the UK.

However, the contract of employment between C and the British company contained an express clause, that the contract was governed by UK law and, in the event of any dispute arising out of the employment, any such issues were to be tried in the UK Courts. Therefore, any breach of duty by C would have been actionable in England.

Furthermore, C's role was to act as an agent for the British company, with delegated authority to enter into agreements on their behalf. All profits from such agreements were derived by the British company, and were subject to British corporation tax.

C was dismissed and submitted a greievance in the UK for unfair dismissal against the British company for whom he had worked. Notwithstanding the express clause in the contract, drafted by the Respondent company of their own initiative, they denied that the English Tribunal had jurisdiction to determine the claim.

Although C did not live or work in Great Britain, the employment Judge who tried the preliminary issue decided that the "sufficiently strong connection" test in Ravat v Hailburton Manufacturing & Services Ltd was the most helpful test to determine the issue. She held that the Tribunal did not have jurisdiction. She found that whilst Mr C had the strongest of connections with English employment law, by reason of the express terms in his contract, he had no personal connection with the UK: He was not a British national, he lived and carried out his work abroad. The fact that his work was for the benefit and on behalf of the British company, was not enough to establish a, "sufficiently strong connection".

The Judge found that it was not open to the parties to form a contract which gave juridiction to UK Tribunals, for it was a question for the Tribunal alone. This, in my view, was at odds with the decision in Ravat, which gave weight to the fact that the employee was assured that they would have the protection of UK employment law whilst working abroad.

Moving forward

It is a question of fact and degree as to whether any given employee will have a sufficiently strong connection with the UK and UK employment law to bring their claim. There must be a connection to both the law and to the United Kingdom itself. Hence, if a British national, the Claimant is in a strong position.

The issue is important to consider at the earliest possible stage, so as to minimise a prospective Claimant's outlay and to ensure that the availiablity of pursing their grievance in an alternate juridiction is not compromised due to limitation.

C's case raised a question in my mind of whether it was fair for the UK company to incorporate an express contractual term, purporting to agree the appropriate venue for legal disputes, and then resile from that position to the employee's detriment. It can't be so.The costs rules in employment law do not provide for any redress by a Claimant misled in this way. However, parties, whatever their intention, cannot determine the issue of jurisdiction, the question is one for the Tribunal alone. So, beware of the rabbit hole, and do not gayly proceed along the yellow brick road, for there may not be a smiling cheshire cat awaiting, no more than a pair of ruby slippers to enable the Claimant to get home.

 

Francesca Martin

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