Working abroad and the right to claim unfair dismissal
The Supreme Court has handed down its decision in Ravat v Halliburton Manufacturing and Services Limited (Scotland), finding that an Employment Tribunal had jurisdiction to hear an unfair dismissal claim from an individual employed by a UK company, but working abroad on rotation, providing services to a foreign company.
This case highlights how the court system has struggled with territorial jurisdiction issues in unfair dismissal claims, due in no small part to a lack of geographical limitation on the relevant sections of the Employment Rights Act 1996 (“ERA”).
Background
At the time of Mr Ravat’s dismissal, he had been working for his Aberdeen-based employer for a total of 16 years, the last three of which were spent in Libya. His contractual documentation described him as a “UK commuter”, since he continued to live in Great Britain, working 28 days to Libya followed by 28 days back home in Preston. This role was carried out back-to-back with another employee in a form of job-share. His commute was arranged and paid for by his employer. The work that he carried out in Libya was for the benefit of a German group company, which in turn was charged for these services by Mr Ravat’s employer. Mr Ravat reported on a daily basis to an operations manager in Libya, but on compliance issues he reported to a manager who was employed by a third affiliate, this time a separate UK company based in Cairo.
Mr Ravat had little by way of day-to-day contact with his Aberdeen-based employer while he was in Libya, and any work he did at home in Preston was minimal. However, against those pointers away from the UK, his commuter contract allowed him to keep the bulk of his UK benefits (such as pay and pension) whilst working abroad. He was paid in Sterling into a UK bank account, whilst income tax and national insurance were deducted by way of PAYE in the usual manner. When he was posted to Libya in 2003, his manager reassured him in writing that he would continue to have the full protection of UK law while he worked abroad and this point was reflected in the wording of his contract. The decision to make Mr Ravat’s role redundant in 2006 was taken by his Cairo-based manager under guidance from his employer’s Aberdeen human resources team. The subsequent redundancy consultation and the appeal against his dismissal all took place in Mr Ravat’s employer’s offices in Aberdeen. He received a UK statutory redundancy payment.
In the judgement handed down by the Supreme Court, Lord Hope referred back to the seminal case of Lawson v Serco Ltd. That case considered what connection between Great Britain and the employment relationship was required to confer unfair dismissal protection under the ERA on employees working abroad. In Lawson the then House of Lords had identified three categories of employee who would qualify for protection. Lord Hope stated that in the present case it would be difficult to fit Mr Ravat’s case into any of these categories, and further that it would be a mistake to try to torture the circumstances of any one employment to make it fit one of the examples given by Lawson. Lord Hope continued that, in order to bring a claim for unfair dismissal, the particular employment relationship must have a stronger relationship with Great Britain than with the foreign country where the employee works. The general rule is that the place of employment is decisive, but it is not an absolute rule. There are exceptions where the connection with Great Britain is sufficiently strong so that the employee gains protection. One such exception was the case of the peripatetic employee who has his base in Great Britain. Another exception was the case of the expatriate employee, all of whose services were performed abroad but who had nevertheless very close connections with Great Britain because of the nature and circumstances of employment. It will always be a question of fact and degree as to whether the connection is sufficiently strong to overcome the general rule that the place of employment is decisive.
Lord Hope stated that, in the present case, the documentation Mr Ravat was given by his employer indicated that it was the latter’s intention that the relationship should be governed by British employment law. This was borne out of practice, as matters relating to the termination of his employment were handled by the employer’s human resources department in Aberdeen. The fact that his home was in Great Britain could not be dismissed as irrelevant. It was the reason why he was given the status of a commuter, with all the benefits that were attached to it: “This all fits into a pattern, which points quite strongly to British employment law as the system with which his employment had the closest connection”.
Comment
The Supreme Court’s decision is a departure of sorts from the stricter “3 category” approach to jurisdiction taken by the same court in Lawson. Whilst the present case is very dependent on its set of facts, it does reflect the holistic attitude that tribunals will take towards an increasingly mobile and multinational workforce. To challenge (on jurisdictional grounds) those unfair dismissal claims from employees working abroad, employers will now have to show that the connection between Great Britain and the relevant employment is not “sufficiently strong” for the tribunal to hear the claim. This will involve an examination of the whole basket of factors attaching to the role in question. Employers are therefore advised to consider carefully the possible implications of UK employment rights when establishing working arrangements abroad.
