Hughes v Alan Dick & Co Ltd.

The Court of Appeal refused the oral renewal of permission to appeal against decisions of the Employment Tribunal and the Employment Appeal Tribunal that an employee whose entire period of work was based in Port Harcourt, Nigeria, was not within the protection of section 94(1) of the Employment Rights Act 1996 for unfair dismissal. The court applied the territoriality principles laid down in Lawson v Serco [2006] UKHL 3 and held that the employment judge had correctly balanced the connecting factors.

The court accepted that several connecting factors pointed to the United Kingdom — incorporation of the employer, contract entered into in the United Kingdom, payment into a UK bank account and dismissal by letter from the UK — but concluded that these were outweighed by the fact that the claimant worked "embedded" in a substantial Nigerian business operated by a Nigerian subsidiary and spent his whole employment in Nigeria. The Court rejected arguments based on forum convenience and on the absence of an equivalent Nigerian remedy under the ILO Convention as irrelevant to the statutory territorial test.

This is an oral renewal of an application for permission to appeal from an Employment Appeal Tribunal decision dismissing the claimant's appeal from an Employment Tribunal ruling that he had no claim for unfair dismissal under section 94(1) of the Employment Rights Act 1996 because his employment was wholly based in Nigeria.

Background and parties:

• The appellant, Mr Hughes, was employed by Alan Dick & Co Ltd, an English company, from March 2005 until December 2007. He worked throughout his employment based in Port Harcourt, Nigeria. The respondent did not attend or appear at the hearing before the Court of Appeal.
• The claimant sought sums due under contract and statutory claims including unlawful deduction from wages, wrongful dismissal damages and compensation for unfair dismissal; the territoriality issue concerned only the unfair dismissal claim under section 94.

Procedural posture:

• An Employment Judge (Sara) decided on a preliminary issue on 30 May 2008 that section 94 did not apply. The Employment Appeal Tribunal (HHJ Peter Clark) dismissed the claimant's appeal on 3 December 2008. Permission to appeal was refused on paper by Smith LJ and this hearing was an oral renewal before the Court of Appeal.

Issues framed by the court:

• Whether the claimant, an employee based and working entirely in Nigeria, fell within the territorial scope of section 94(1) ERA 1996.
• Whether the Employment Judge misapplied the territoriality test as explained in Lawson v Serco [2006] UKHL 3, including the categories of employees who may be covered (employees working in Great Britain, peripatetic employees, and certain expatriate employees posted abroad to represent a British business, or those working in British "enclaves").
• Secondary arguments raised on paper included forum non conveniens, an asserted equitable jurisdiction of the Employment Tribunal and the relevance of the absence of an equivalent Nigerian remedy under the ILO Convention; the equitable point was abandoned.

Court's reasoning and decision:

• The Court applied Lord Hoffman's formulation in Lawson v Serco. It identified that unusual circumstances are required for an expatriate based abroad to fall within section 94. The examples in Lawson are (a) an employee posted abroad to work for a business conducted in Great Britain as its representative, and (b) employees working in effectively extra-territorial British enclaves.
• Although several connecting factors linked the claimant to the United Kingdom (incorporation of employer, recruitment and contract in the United Kingdom, payment into a UK bank, dismissal by letter from UK head office), the Employment Judge had rightly found that those factors were insufficient and that the stronger and predominant connection was with Nigeria where the claimant worked "embedded" in a substantial Nigerian business run by a Nigerian subsidiary.
• The Court rejected the relevance of the absence of a Nigerian remedy under the ILO Convention and considered forum non conveniens irrelevant because the Employment Tribunal is the statutory forum if section 94 applies. There was no error of law in the Employment Judge's assessment and no reasonable prospect of success on appeal, nor any compelling point of public importance created by the facts.

Relief sought: permission to appeal to the Court of Appeal (oral renewal) was refused; application dismissed.

Permission to appeal was refused and the application was dismissed. The Court held that the Employment Judge had correctly applied the territoriality test in Lawson v Serco [2006] UKHL 3 and lawfully concluded that an employee based and working wholly in Nigeria, "embedded" in a Nigerian business operated by a Nigerian subsidiary, did not fall within section 94(1) ERA 1996 despite several connecting factors with the United Kingdom; no error of law and no reasonable prospects of success were shown.

Employment Tribunal (preliminary issue decided by Employment Judge Sara on 30 May 2008) -> Employment Appeal Tribunal (appeal dismissed, HHJ Peter Clark, 3 December 2008) -> permission to appeal refused on paper by Smith LJ -> oral renewal refused by Court of Appeal [2009] EWCA Civ 937 (19 February 2009).