Ministry of Defence v Wallis & Anor (Rev 1)

An employee working wholly abroad may claim unfair dismissal where the employment has connections with Great Britain and British employment law as strong as those of the recognised expatriate categories. The inquiry is one of degree. The primary fact-finder’s assessment merits considerable respect.

Where an employment tribunal is properly seised of related claims against an emanation of the state, it must give effect to a directly effective EU equal-treatment right. It should interpret domestic legislation compatibly with that right or disapply incompatible territorial limitations. Requiring a claimant to pursue the discrimination claim in another member state may deny effective judicial protection, particularly where the related contractual and unfair-dismissal claims proceed in Great Britain.

Two employees of the Ministry of Defence worked wholly at NATO schools in Belgium and the Netherlands. Each obtained employment as the dependant of a spouse serving with the British armed forces overseas. Their contracts were governed by English law, and they were dismissed after their husbands ceased serving in the armed forces.

The Employment Tribunal held that both employees could pursue unfair-dismissal claims and that Mrs Wallis could also pursue sex-discrimination claims. The Employment Appeal Tribunal dismissed the Ministry’s appeal in UKEAT/0546/08/ZT.

The Ministry appealed on the grounds that the employment lacked the strong British connection required for overseas unfair-dismissal protection and that the express territorial limits of the Sex Discrimination Act 1975 excluded the discrimination claim.

1. The appeal was unanimously dismissed. The Employment Tribunal had made no error of law in accepting jurisdiction over the unfair-dismissal and sex-discrimination claims.

2. Per Mummery LJ, with whom Elias and Etherton LJJ agreed, work performed wholly outside Great Britain presents a major obstacle to an unfair-dismissal claim, but it is not conclusive. Under the principles in Serco, an expatriate employee may fall within the residual category where the employment has connections with Great Britain and British employment law as strong as the recognised examples.

3. The Tribunal was entitled to assess the connecting factors cumulatively. The Ministry employed the claimants directly; eligibility depended on their husbands’ service with the British armed forces; English law governed their terms; they formed part of the civilian component rather than locally recruited labour; the employment furthered a Ministry policy supporting armed-forces recruitment; and the dismissals resulted from the loss of dependant status. Those circumstances were closely analogous to posting overseas or employment in a British enclave.

4. Per Elias LJ, the application of the Serco principles is a question of law, but also one of degree on which the primary fact-finder’s decision merits considerable respect. The claimants had connections with Great Britain and British employment law equally strong to those of employees in British enclaves.

5. Mrs Wallis fell outside the express territorial conditions in sections 6 and 10 of the Sex Discrimination Act 1975. Nevertheless, article 3 of the Equal Treatment Directive 76/207/EEC conferred a directly enforceable right against the Ministry as an emanation of the state. A national court must interpret domestic law compatibly with that right where possible or disapply incompatible provisions to the necessary extent.

6. EU employment rights were not divided into exclusive geographical units. Requiring proceedings in Belgium would not provide effective judicial protection where the contractual and unfair-dismissal claims were properly before the British tribunal, English law governed the relationship, and state immunity might leave the claimant without a remedy. The Tribunal therefore had jurisdiction over all the claims.

1. Court of Appeal (Civil Division): The Ministry’s appeal was unanimously dismissed: [2011] EWCA Civ 231.
2. Employment Appeal Tribunal: Underhill J, President, dismissed the Ministry’s appeal from the Employment Tribunal in UKEAT/0546/08/ZT.
3. Employment Tribunal: The Tribunal held that both claimants could pursue unfair-dismissal claims and that Mrs Wallis could pursue claims under the Sex Discrimination Act 1975 by reliance on directly enforceable EU rights.