Unfair dismissal claims and competing jurisdictions

Tue, 03 Dec 2013

By Nigel Brockley

When do Employment Tribunals have jurisdiction to hear unfair dismissal complaints brought by employees who work outside Great Britain? Nigel Brockley highlights the recent caselaw on this topic. 

There are a significant number of Claimants, such as those working abroad, whose entitlement to present certain statutory claims (such as unfair dismissal and discrimination) is likely to be dependent upon them firstly demonstrating that the Tribunal has jurisdiction to hear their claims, and this may mean the “knock out” point (of jurisdiction) being taken by employers at a preliminary hearing. Whilst the position is likely to be different for those working within the EU (due to the entitlement to rely directly upon legislation which implements EU directives), such hearings are not infrequent and there have been a number of significant cases since the decision of the House of Lords in Lawson-v-Serco [2006]UKHL 3 [2006] IRLR 289.

The consideration of this jurisdictional point arises in relation to claims of unfair dismissal due to the fact that there is no geographical restriction imposed by the provisions of sections 94 and 230 ERA; the right (to claim unfair dismissal) is conferred upon any employee. This was not the case, for prior to its repeal (by section 32(3) of the Employment Relations Act 1999), section 196(2) ERA provided that the right had been intentionally limited only to apply: “...where under the employee’s contract of employment he ordinarily works outside Great Britain....”.

In Lawson, Lord Hoffman, whilst recognising that the intention of section 94(1) ERA was to confer a right (to complain of unfair dismissal) upon the standard case employee (who worked for an employer based in Great Britain), nonetheless identified certain excluded classes of employee as being potentially able to bring themselves within the scope of section 94(1), these being peripatetic employees (such as airline pilots and travelling salesmen) and expatriate employees. Furthermore, Lord Hoffman specifically did not close off the possibility of other excepted (but unidentified) classes of employee.

Whilst there have been refinements in the way that such cases have been considered, these refinements have addressed the exceptional rather than the standard case employee. This has been seen in the cases of Ravat-v- Halliburton Manufacturing and Service Ltd [2012] UKSC 1[2012] IRLR 315 SC and Duncombe –v-Secretary of State for Children, Schools and Families (No 2) [2011] UKSC 36[2011] IRLR 498 SC, which highlight the importance of the undertaking of comparative exercise in determining which is the more appropriate jurisdiction: Great Britain or the jurisdiction in which the employee works. The examination is as to which territory has the greatest pull. In determining whether there is displacement of the presumed jurisdiction, it is likely that the tribunal will have to regard any relevant factor upon which evidence is adduced, which would seem likely to include the terms of the contract of employment, the place in which the employee lives and works, the treatment and taxation of the employee’s earnings and the availability of a remedy in an alternative jurisdiction.

Baroness Hale in Duncombe explained the position in this way: “...The principle appears to be that the employment must have much stronger connections both with Great Britain and British employment law than with any other system of law...” and Lord Hope, in Ravat, while justifying the exception (to section 94(1)) as reflecting what Parliament intended, added that in expatriate cases the employee needs to show “... an especially strong connection with Great Britain and British employment law...”.

However, the most liberal approach to the section 94(1) exception appears in the later case of Bates Van Winkelhof-v-Clyde and Co LLP [2012] IRLR 992. In his judgment Elias LJ recognised that the ‘comparative exercise’ had its place, in a determinative sense only where the employee worked exclusively abroad, and he contrasted this with the case where the employee either worked or lived for part of the time within Great Britain, and in such circumstances, he was satisfied that: “...All that is required is that the tribunal should satisfy itself that the connection is...sufficiently strong to enable it to be said that Parliament would have regarded it as appropriate for the tribunal to deal with the claim...”.

Within the latest decision on the topic, albeit one of the EAT, namely that in Dhunna-v-Creditsights Ltd UKEAT/0246/12/LA, Slade J has helpfully summarised the principles to be derived from the authorities, thus:

a)     The overarching question is whether Parliament intended section 94(1) to apply to the particular Claimant;

b)     The place of employment is generally decisive;

c)     Where there is a much stronger connection with Great Britain and British employment law the Claimant will be within the scope of section 94(1);

d)     The comparative exercise is appropriate where the employee works wholly abroad;

e)     The country in which the employee lives is relevant, especially if he lives and works abroad;

f)      When the employee lives and/or works for part of the time in Great Britain all that is required is for the employee to demonstrate a sufficiently strong connection.

The author is aware that many such cases, which pre-dated the decision in Bates Van Winkelhof, have failed at the stage of a preliminary hearing. However, it would seem surprising if this trend were to continue, at least in those cases where the employee can demonstrate a periodic commute to and from a place of work outside of Great Britain.

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