YKK Europe Ltd v Heneghan

Territorial jurisdiction under section 94(1) of the Employment Rights Act 1996 is a question of law, although its application is fact-sensitive. The tribunal must first identify which category of employee described in Lawson v Serco Ltd applies: the standard employee working in Great Britain, a peripatetic employee, or an expatriate employee.

Where the employee was absent from work when dismissed, the tribunal must adapt the applicable test and conduct a broader factual inquiry. Relevant matters may include the reason and duration of the absence, the employee’s previous workplace or base, the place where the employee would otherwise have worked, the continuing employment relationship, where the contract was operated, and jurisdiction at the start of the absence. The inquiry must remain flexible and non-prescriptive.

YKK Europe Ltd appealed against a decision of the London Central Employment Tribunal, promulgated on 29 May 2009, that it had territorial jurisdiction to hear Mr Heneghan’s unfair dismissal claim. The claimant had worked in London before being sent to Germany to establish and manage a European office. His employment ended while he was back in the United Kingdom and absent from work on garden leave or suspension.

The Employment Tribunal held that the claimant was working at an establishment in Great Britain when dismissed and alternatively that section 94(1) applied while he worked in Germany. The appeal concerned the correct application of Lawson v Serco Ltd and Hunt v United Airlines Inc to an employee absent from work at dismissal.

1. Appeal allowed. The Employment Tribunal had applied the wrong legal approach and the matter was remitted to a fresh tribunal.
2. Section 94(1) raises a question of law involving judgment in applying the law to the facts. It is not a matter of discretion. The tribunal must begin by identifying which Lawson category applies.
3. In the standard case, the focus is whether the employee was working in Great Britain at the time of dismissal. For a peripatetic employee, the relevant inquiry is ordinarily where the employee was based. An expatriate employee who works and is based abroad will rarely fall within section 94(1), save where the employment has exceptionally strong connections with Great Britain, such as posting abroad for a business conducted in Great Britain or work within an effectively British enclave abroad.
4. Absence from work does not create a separate category of employee. Where the employee is not working at dismissal, the Lawson inquiry must be adapted through a broader factual investigation. The tribunal may consider the reason and length of absence, the employee’s previous workplace or base, where the employee would have worked but for the absence, whether the employment relationship remained active, where the contract was operated, and whether jurisdiction existed when the absence began. The factors are non-exhaustive and their weight is for the tribunal.
5. The Employment Judge wrongly treated Hunt as creating a separate category of non-working employee, failed to identify the applicable Lawson category, and considered only the position in June 2008. The alternative expatriate finding was also unsustainable on the facts.
6. The case was remitted because the category had not been determined and the evidence did not clearly establish whether the claimant was on garden leave or merely suspended.

• Employment Appeal Tribunal: allowed YKK Europe Ltd’s appeal and remitted the territorial-jurisdiction issue to a fresh tribunal.
• London Central Employment Tribunal: held that it had jurisdiction to determine the claimant’s unfair dismissal claim.