It stands to reason that employees working in Great Britain can bring claims for unfair dismissal here. But what about workers elsewhere?
In Serco -v- Lawson; Botham -v- Ministry of Defence; Croft & ors -v- Veta Ltd & ors (IDS 799), the House of Lords said that, as a general principle, the claim must relate to “employment in Great Britain”.
What was the legal framework?
Section 196(3) of the Employment Rights Act 1996 said that employees could not claim unfair dismissal under section 94(1) if they “ordinarily” worked outside Great Britain.
Section 196 was, however, repealed in 1999 and not replaced. The three appeals to the House of Lords tested the territorial scope of section 94(1).
What were the facts?
Lawson: Mr Lawson, a British citizen living in England, got a security job working on Ascension Island in the South Atlantic with Serco, a UK-registered company, based in England. His salary (in pounds sterling) was paid into a UK bank account, but he did not pay any UK taxes. The Court of Appeal said that Parliament could not have intended to give every employee the right to claim unfair dismissal, no matter where they worked, irrespective of how strong their connections were with Great Britain.
Botham: Mr Botham, a British citizen, worked for the MoD in Germany. He paid UK taxes and his contract was governed by the law of England and Wales. On the basis of the decision in Lawson, the Court of Appeal again said it had no jurisdiction to hear his claim for unfair dismissal.
Croft: Mr Croft worked as a pilot for Veta Ltd, a company registered in Hong Kong. His contract was also governed by Hong Kong law. But his permanent home base, where his flight cycle started and finished, was Heathrow.
The Court of Appeal said that he was employed in Great Britain and that he could therefore pursue his unfair dismissal claim.
What general principles apply?
The House of Lords said that it would be a mistake to try to formulate another rule “in the sense of the verbal formula that section 196 used to provide”.
Instead, the “employment in Great Britain” test should be treated as a general principle, rather than a rule “which must then itself be interpreted and applied”.
But how should that principle be applied in a standard case? Under section 196, the issue of where someone “ordinarily worked” was established by looking at their contract.
However, this had produced some perverse results and their Lordships said that courts should look instead at whether the employee was actually working in Great Britain at the time of their dismissal as opposed to what their contract said.
What about mobile employees?
The House of Lords then looked at employees who did not work in one particular place. It said the common sense approach “of treating the base of a peripatetic employee as … his place of employment, remains valid.”
Tribunals should go by the conduct of the parties and the way they have been operating the contract to decide where the base actually is, as opposed to just looking at the terms of the contract. In the case of Mr Croft, that meant he could pursue his claim.
What about expatriate employees?
In general, the House of Lords said that “the circumstances would have to be unusual for an employee who works and is based abroad to come within the scope of British labour legislation”. But, they added, there were exceptions and provided two possible examples.
The first was a foreign correspondent for a British newspaper, who was posted abroad and lived there for many years, but remained a permanent employee of the newspaper.
The second was an expatriate employee of a British employer operating within an extra-territorial British enclave in a foreign country.
The second example applied to both Mr Lawson and Mr Botham, who were therefore entitled to pursue their claims.
Sweetin -v- Coral Racing