In Employment Alert No. 61 (27 May 2003), we reported on two conflicting EAT decisions regarding the jurisdiction of UK Employment Tribunals to hear claims brought under the Employment Rights Act 1996 ("ERA") by individuals working outside Great Britain.
In Serco Limited v Stephen Lawson (EAT/0018/02), the EAT held that the only requirement was for the employer to reside or carry on business in England or Wales. In other words, it did not matter that the employee worked overseas as long as the employer had a place of business in England and Wales where Tribunal documents could be served.
In contrast, in Bryant v The Foreign & Commonwealth Office (EAT/0174/02), the EAT held that an employee who worked in Italy could not bring a claim under ERA on the basis that English statutes are presumed not to have extra-territorial effect unless there is a clear contrary intention, which there was not in this case.
In two further cases, Jackson v (1) Ghost Limited (2) Ghost, Inc. (EAT/0547/02/DA) and The Financial Times Limited v Bishop (EAT/01474/03/ZT) the EAT found that a Tribunal only had jurisdiction to hear a claim brought under ERA where there was a "substantial connection" between the employment and Great Britain. Clearly, where an employee worked primarily overseas that substantial connection might not exist.
What has happened?
The Court of Appeal has now provided clarification on this issue in dealing with the appeal in the Serco case. The decision will be binding on Employment Tribunals and the EAT.
The Court disagreed with all of the previous approaches adopted by the EAT and held that claims could only be brought under ERA in UK Tribunals in respect of "employment in Great Britain".
The Court, however, accepted the need for a degree of flexibility in applying this test and acknowledged that, for example, a dismissal during a single, short absence from Great Britain would not normally exclude the protection of ERA.
What does this mean for employers?
The more restrictive approach adopted by the Court of Appeal will make it harder for employees working overseas to bring claims in UK Tribunals under ERA.
In the majority of cases it will not be difficult to decide whether the employment is in Great Britain.
Borderline cases will depend on an assessment of all the circumstances of the employment in the particular case.
Borderline cases might, however, arise more commonly than was anticipated by the Court and would include situations, for example, where an employee who has worked in Great Britain (possibly for a number of years) is seconded, for example, to the US or where an individual is employed by a company based in Great Britain but works in a number of locations around the world including Great Britain.
What should employers do?
- Consider any policies on secondments or international assignments. Could these allow an individual to claim protection?
- Consider requiring employees who are being relocated overseas to sign a new contract stating that their place of work will be the country to which they are being located and confirming that employment is no longer in Great Britain.
- Consider using local contracts, although employers should ensure that advice on the relevant local law is obtained to clarify what employment rights the employee may have under local laws.
- Consider expressly terminating the employees’ UK contracts prior to their secondment/assignment overseas.
- Note that the Court accepted that, under the Posting of Workers Directive, employees who are temporarily posted from an EU Member State to Great Britain are protected by unfair dismissal rights while working in Great Britain.