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Territorial Jurisdiction in Unfair Dismissal Claims

19 June 2012

Under Section 94(1) of the Employment Rights Act 1996 (ERA), an employee has the right not to be unfairly dismissed. Whilst the legislation does not contain any geographical limitation, it is agreed that the scope of the right must have some territorial limits.

In Lawson v Serco Ltd., the House of Lords considered what connection between Great Britain (GB) and the employment relationship was required to confer rights on employees working abroad. In addition to peripatetic employees, in whose case the place of employment at the time of dismissal is key, Lord Hoffmann identified two categories of expatriate employees to whom Section 94(1) can exceptionally apply. These are employees posted abroad to work for a business conducted in GB or those working in a political or social British enclave abroad.

Lord Hoffmann’s analysis in Lawson did not put an end to uncertainty on this issue, however. Neither of his examples of employees working outside GB applied to the claimants in Duncombe v Secretary of State for Children, Schools and Families, who were teachers employed by the British Government to work in European schools abroad. The question for the Supreme Court was whether there were other examples of the principle of which this case was one. The Court held that this was another example of an exceptional case where the employment had an overwhelmingly closer connection with GB and British employment law than with any other legal system, and concluded that Parliament had to have intended that the employees should enjoy protection from unfair dismissal.

The Supreme Court has now dealt with a further case concerning an overseas worker who wished to claim unfair dismissal (Ravat v Halliburton Manufacturing and Services Ltd.). The case is likely to have relevance for a much larger number of employees than those in the categories described by Lord Hoffmann. Ismail Ravat began working for Halliburton Manufacturing and Services Ltd., a UK-based subsidiary of Halliburton Inc., in 1990. The company provided tools, services and personnel to the oil industry. In 2003, he was offered and accepted a transfer to Libya and worked a pattern of 28 consecutive days abroad followed by 28 consecutive days spent at home in the UK. He was paid in GB pounds and his travel costs were also paid by Halliburton Manufacturing and Services Ltd., even though the work he was doing was for another Halliburton subsidiary in Germany, which was charged by the UK subsidiary for his services. Mr Ravat was dismissed as redundant and was paid a redundancy payment in accordance with the ERA. He claimed unfair dismissal. Halliburton Manufacturing and Services Ltd. argued that the Employment Tribunal did not have jurisdiction to hear his claim.

The Supreme Court ruled that the list of exceptions in Lawson is not exhaustive but gives examples of situations where the correct test is met – i.e. where the connection with GB is sufficiently strong to show that Parliament must have intended that Section 94(1) of the ERA should apply. It will be a question of fact and degree as to whether the connection in a particular case is sufficiently strong to overcome the general rule that the place of employment is decisive.

Applying those principles to Mr Ravat’s case, the Court ruled that the ET did have jurisdiction to hear his claim, which was therefore remitted for consideration on its merits.

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