The test to determine whether an expatriate employee falls within the territorial scope of UK employment law has been in the spotlight recently. The established general test is whether an expatriate employee has a sufficiently strong connection with Great Britain and British employment law. The Employment Appeal Tribunal (the "EAT") has provided a fresh perspective on this by identifying a new sub-category of expatriate employee that will fall within such scope.
In the leading case on the territorial scope of UK employment law, Lawson v Serco, Lord Hoffmann stated that cases where expatriate employees came within the scope of UK employment law would be unusual. However, he did acknowledge that some would and suggested that this may include an employee posted abroad by his British employer for the purposes of the business carried on in Great Britain. The recent case of Lodge v Dignity & Choice in Dying and another UK EAT/0252/14 has now determined that an employee does not need to be posted abroad to benefit from bringing claims under the Employment Rights Act 1996 and that this can include employees working remotely of their own choice.
Mrs Lodge is an Australian citizen who was employed by a British not-for-profit charity under the terms of a contract of employment governed by the laws of England and Wales. She worked from the company's office on Oxford Street but occasionally worked remotely from her home in West London using an IT application installed on her laptop computer. A few months after her appointment in February 2008 she moved to Australia to be closer to her ill mother. She remained employed by the charity but worked remotely from Australia using the application installed on her laptop until June 2013 when she resigned and brought claims of constructive unfair dismissal and whistleblowing.
The employment tribunal refused jurisdiction to hear Mrs Lodge's claim on the basis she did not satisfy the expatriate employee test set down by Lord Hoffmann in the Serco case and so did not fall within the territorial scope of UK employment law. This was because she had moved to Australia at her instigation rather than being posted there. The employment tribunal judge also stated that Mrs Lodge had failed to show 'an especially strong connection with Great Britain and British employment law'.
The EAT disagreed. It held that although Mrs Lodge hadn't been posted abroad the fact that her employer allowed her to work remotely from Australia did not prevent her falling into a sub-category of Lord Hoffmann's expatriate employee. Mrs Lodge remained connected with Great Britain through her employment on a contract subject to the laws of England and Wales and the fact that her employer's activities are located in Great Britain. The EAT judge also found as relevant the facts that she could not pursue her claims in Australia and a grievance she had brought had been handled in London. However, the key fact was that all the work done by Mrs Lodge was for the benefit of her employer's London operations. If this had not been the case then it is more likely the decision would have been that she did not fall within the territorial scope of UK employment law.
Although the question of whether an employee falls within the territorial scope of UK employment law will depend on the facts, this case shows that the increasing digitalisation of the workplace and employees working remotely on an international basis will not prevent them from bringing claims, including unfair dismissal and whistleblowing, under UK legislation. Employers should be careful to consider their possible exposure to such claims depending on how work arrangements are structured for particular employees and should not disregard the risks simply because an employee is not physically based in the UK.