Unfair dismissal claims - when is an employer liable?

Unfair dismissal claims - when is an employer liable?

Published:

Author: Louise Randall

Applies to: UK wide

As organisations have become more global and workforces more mobile, this has resulted in 'overseas' employees claiming UK employment rights. In this article we focus on some examples and what employers can do to minimise their risks of such claims.

Unfair dismissal rights

The territorial scope of the right not to be unfairly dismissed is fact and claim dependent. UK employers of mobile workforces often employ a number of categories of employees. For example, in relation to unfair dismissal rights:

  • Employees ordinarily working in Great Britain - this category may be protected under the UKs employment laws depending on where the employee is working at the time of dismissal (but see 'Virtual Employee' below). Courts focus on the factual position rather than what the employment contract says. The contract may be relevant where the employee is working in the UK on a business trip rather than the UK being considered as their base, for example.
  • Peripatetic employees - for employees travelling frequently for work, their base should be treated as their place of employment at the date of dismissal. Other factors to consider include where the employer's headquarters are, where travel begins/ends, where the employee lives, the currency in which they are paid, etc.
  • Expatriate employees - employees working and based abroad, recruited in Britain by a British company, do not necessarily have unfair dismissal rights in the UK. However, they may be protected where, for example, the employee is posted abroad for the purposes of business carried on in the UK e.g a foreign correspondent for a British newspaper or an employee working for a UK employer operating within an expatriate enclave abroad.
  • Employees with an equally strong connection with Great Britain - in Ravat v Halliburton Manufacturing and Services Ltd (2012), the Supreme Court held that an employee working on a rotational basis in Libya (28 days working in Libya/28 days spent on leave in GB), could claim unfair dismissal in the UK. The employee was working in Libya at the date of dismissal but the Court considered other factors, including that the employee's home was in the UK, his salary was paid in sterling under PAYE, HR issues were handled in the UK in accordance with UK HR policies and his contract was subject to English law.
  • 'Virtual employee' - in Lodge v Dignity & Choice in Dying (2014), the Employment Appeal Tribunal found that an Australian citizen, employed as Head of Finance for a UK company who worked remotely in Australia for family reasons, was entitled to pursue unfair dismissal and whistleblowing claims in a UK Employment Tribunal. The fact that she was a 'virtual employee' in Australia rather than a 'physical employee' in London did not mean that she fell outside the protection of the UK courts, despite the fact that she had not been 'posted' abroad and was therefore not an expatriate.

Other rights derived under EU directives

Case law shows that where domestic employment law gives effect to a right derived from a European Directive, the territorial scope of the domestic law should be construed widely enough to give effect in the UK and across the European Union.

Accordingly employees across Europe who are not based and do not work in the UK, but are either employed by a UK employer or conducting business on behalf of their employer in the UK are entitled to pursue claims for discrimination, fixed-term employment protections and Working Time Regulations rights, including rights to holiday pay and limits on working hours.

How to limit the legal risks?

Employers should:

  • conduct regular risk assessments
  • review and keep abreast of current employment law practices and cases in the jurisdictions in which they operate
  • ensure contracts reflect the actual employment situation and status of the employee
  • update and maintain best practice standards and policies and adapt any global policies to ensure compliance with local laws

Disclaimer

This document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.