The Long Arm of (Employment) Law Just Got Longer?

 

 

 

 

Just how far does the long arm of the Employment Tribunal stretch when considering unfair dismissal? Last week the Supreme Court gave its Judgment in the case of Ravat v Halliburton Manufacturing and Services Ltd and the answer may well now be that the reach of the ET has just got longer.  S.94(1) of the Employment Rights Act 1996 provides that an employee has the right not to be unfairly dismissed. This does not present problems where the employee is working in Britain. However, it becomes an issue if the employee is working overseas.  In what circumstances can an employee claim protection under British law not to be unfairly dismissed?

The leading case on the subject for several years has been Lawson v Serco and, in particular, Lord Hoffmann’s Judgment on the question

 “what connection between Great Britain and the employment relationship is required to make section 94(1) the appropriate choice of law in deciding whether and in what circumstances an employee can complain that his dismissal was unfair?”

Lord Hoffmann went on to describe three likely scenarios where a foreign worker would be able to claim that a British employment tribunal had jurisdiction to hear a claim for unfair dismissal.  They were;

1. An employee working a in a political or social enclave (such as an embassy)
2. A worker posted abroad by a GB company (such as a foreign correspondent)
3. A peripatetic worker based in the UK

Expatriate workers outside these categories were not eligible to claim and would have to rely on whatever local legal protection there was available.

In practice those categories have not always proved to be as easy to implement in practice.  An example of this was last year’s case of Duncombe & Ors v Secretary of State for Children, Schools and Families (No 2) a case which involved British teachers employed by the British government to work in an international (not British) enclave. The Supreme Court allowed their appeal, which meant they could bring a claim in the British Employment Tribunal. Giving Judgment in that case Lady Hale said

“It is therefore clear that the right will only exceptionally cover employees who are working or based abroad.  The principle appears to be that the employment must have much stronger connections both with Great Britain and with British employment law than with any other system of law. There is no hard and fast rule and it is mistake to try and torture the circumstances of one employment to make it fit one of the examples given, for they are merely examples of the application of the general principle.” (my emphasis)

In Ravat, Lord Hope said

“The question of fact is whether the connection between the circumstances of the employment and Great Britain and with British employment law was 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.”

 Thus watering down the test from being “exceptional” to “sufficiently strong”, meaning foreign based employees should have more scope to argue that they should be allowed to bring claims for unfair dismissal within the ET. This, of course, doesn’t make the position any clearer for litigants or their advisers and writing in the 11KBW blog, John Kavanagh QC (who acted for Halliburton) said

It is certainly true that the Ravat decision is employee-friendly – the majority of overseas worker cases will now most likely be caught by s.94 if a long enough list of factors can be produced – but it is open to question whether this is quite what Parliament had intended. Instead, the tribunals are left with a lengthy fact-finding exercise combined with a distinct lack of clarity as to what the relevant facts they should be finding are. From now on, when establishing the scope of s.94(1), anything, it seems, goes.

Is he being too pessimistic? Surely Tribunals will be wary of over-extending themselves, but it may take some more cases to clear up these increasingly muddy waters. In the meantime, what are the factors that might be looked at in determining jurisdiction as part of one of Kavanagh’s dreaded “lengthy fact-finding exercises”? Here are some of the suggestions made in Duncombe and a couple of my own;

• What does the contract of employment say about jurisdiction?  Does it say English law will apply or the parties will submit to the exclusive jurisdiction of the English courts?

• In what currency is the employee paid?

• Where does the employee pay tax?

• What contacts did they have with the local community?  Were they in an enclave or fully integrated into the local community

• How was line management exercised?  From the UK or locally?

• What dealings did they have with the UK base?

• Does local law provide a remedy?  If no then the risk of a conflict of laws must recede, making it easier for a Tribunal to seize itself of jurisdiction.

Until Parliament legislates to make the law clearer we are going to be left with the current uncertainty. For once though, we seem to have a pro-employee decision and that is to be welcomed.