The Supreme Court recently held that an employee working abroad on a rotational basis could bring a claim of unfair dismissal in the employment tribunal.
As unemployment rises in the UK, workers are increasingly looking abroad for employment opportunities. Greater globalisation has led to a proliferation of multinational companies with employees constantly moving across national boundaries.
An employee who works under a contract of employment may bring a claim in the employment tribunal if they are unfairly dismissed by their employer. The maximum compensatory award in such cases is now £72,300.
Unhelpfully, the legislation is now silent as to exactly which employees are protected against unfair dismissal and today's more complex labour market has resulted in confusion about the territorial extent of unfair dismissal law.
The House of Lords in the case of Lawson v Serco formulated the test to be applied by employment tribunal's to decide if they have jurisdiction to hear unfair dismissal cases.
The House of Lords indentified three, or possibly four, categories of employee who would qualify for protection against unfair dismissal:
- employees who ordinarily work in Great Britain at the time of their dismissal;
- "peripatetic employees" whose base is in Great Britain e.g. flight crew who work around the world but always return to a UK airport; and
- "expatriate employees" who have a strong link to Great Britain e.g. those working in British military bases abroad or the foreign correspondent of a British newspaper who is based abroad.
The House of Lords also suggested that employees who do not fit any of the above categories but who have an "equally strong connection" with Great Britain may be covered.
In the subsequent case of Duncombe and Others v Secretary of State for Children, Schools and Families, the Supreme Court held that teachers who were employed by the British Government to work in European schools abroad were protected because they had sufficiently close connections with Great Britain, more so than with any other jurisdiction. Lady Hale said
"it is a mistake to try and torture the circumstances of one's employment to make it fit one of the examples given in Lawson, for they are merely examples of the main principle".
In Ravat v Halliburton Manufacturing and Services Limited the Supreme Court has now revisited Lawson and given helpful insight into how employment tribunals should approach the question of the territorial extent of unfair dismissal protection.
Mr Ravat was a British citizen originally employed by a subsidiary of a multinational company in London, he was later posted to Algeria and then to Libya. From 2003 until 2006, when he was made redundant, he job shared working on a "rotational" or "commuter" basis which involved 28 days in Libya followed by 28 days on leave in Great Britain, where he lived. Unlike other employees in the business he was not accorded expatriate status as he worked on a rotational basis and received expenses to cover his commute. The duties he carried out in Libya were for the benefit of a German subsidiary.
The Supreme Court took the following factors into account to establish that Mr Ravat had a substantial connection with Great Britain in comparison to any other jurisdiction and therefore was entitled to claim unfair dismissal:
- his home address was in Preston, Great Britain;
- he received his salary in sterling after deductions for UK tax and National Insurance contributions;
- he was retained under the normal UK pay and pension structure which applied to other UK based employees;
- his employment contract was stated to be subject to UK law and he was repeatedly reassured by his employer that his employment relationship with them was governed by UK law; and
- his employment and its termination were handled by the HR team based in Aberdeen.
Although Mr Ravat worked outside of the UK for a German company the Court felt that this was not enough to deflect attention away from the reality of the situation that he was connected to the UK.
The Supreme Court stated that the correct question for tribunals to ask is:
"whether the connection with Great Britain is sufficiently strong to enable it to be said that Parliament would have to regard it appropriate for the Tribunal to deal with the Claim."
It agreed with Lady Hale that it was not necessary for Mr Ravat to fit neatly into one of the three main categories set out in Lawson.
The case gives welcome clarification as regards the Lawson "principles" i.e. that these are not hard and fast rules to be applied but merely examples. The overarching test is one of "substantial connection" to Great Britain: an individual who can not prove this will not be protected against unfair dismissal. This means that more individuals may be able to argue that they are protected by unfair dismissal in the future.
Whether someone has a substantial connection to Great Britain will be a question of fact dependant upon the circumstances of each case. Questions of fact are for tribunals to decide and it is not usually possible to appeal such decisions.
With overseas working becoming more popular due to a tougher economic situation in the UK and favourable tax treatment it is likely that more of these cases will reach the Courts. Employers who do not wish their staff working abroad to be covered by unfair dismissal legislation need to be careful to structure the work with as little connection to Great Britain as possible.