Dhunna v CreditSights Ltd

The territorial scope of Employment Rights Act 1996 section 94(1) depends on statutory construction. The normal rule is that the place of employment is decisive. An employee who works and lives abroad falls within the provision only where the employment has much stronger connections with Great Britain and British employment law than with the country of work, and those connections are sufficiently strong to justify the conclusion that Parliament intended the claim to be heard in Great Britain. The employee’s residence is relevant, and a truly expatriate employee requires an especially strong connection. The representative-office examples in Lawson v Serco Ltd are illustrations, not separate rigid categories. The same territorial test applies to the right to be accompanied under Employment Relations Act 1999 section 10. The Working Time Regulations 1998 expressly extend only to Great Britain and cannot be modified to cover work performed in Dubai outside the European Union.

The Claimant, employed by a London-based company, moved from London to Dubai and worked there wholly on Middle Eastern, Asian and African business until his dismissal. He claimed unfair dismissal under Employment Rights Act 1996 section 94(1), breach of the right to be accompanied under Employment Relations Act 1999 section 10, and accrued holiday pay under Working Time Regulations 1998 regulation 16(1).

The Employment Judge held that the Employment Tribunal lacked territorial jurisdiction over the first two claims but had jurisdiction over the holiday-pay claim, relying on European law and Bleuse v MBT Transport Ltd. The Claimant appealed. The Respondent cross-appealed. The central issues were the correct test for an employee working and living abroad, and whether European law could extend the Regulations to employment performed outside the European Union.

1. Unfair dismissal and accompanying right. The appeal was allowed and the claims under Employment Rights Act 1996 section 94(1) and Employment Relations Act 1999 section 10 were remitted to a different Employment Judge. The territorial limitation is the same for both rights.

2. The issue is one of statutory construction: whether Parliament intended section 94(1) to apply to an employee in the circumstances under consideration. The standard case is employment in Great Britain. The general rule is that the place of employment determines territorial scope, but an exception exists where the connection with Great Britain and British employment law is sufficiently strong.

3. For an employee who works wholly abroad, the relevant inquiry is comparative. The employment must have much stronger connections with Great Britain and British employment law than with the country in which the employee works. Where the employee also lives abroad, an especially strong connection is required. Any material connection with a third country may weaken the connection with Great Britain. The rigid use of the representative-office and extra-territorial-enclave examples in Lawson v Serco Ltd was inappropriate; those examples illustrate the general principle.

4. Whether the case falls within section 94(1) is a question of law, but the strength of the competing connections is a question of fact and degree. The Employment Judge was entitled to considerable respect, yet the decision could not safely be upheld because it had been reached under the earlier approach and had not made the required comparison with Dubai. The complaint therefore required rehearing, with any further factual findings considered under the later authorities.

5. Holiday pay. The cross-appeal was allowed. Regulation 1(2) of the Working Time Regulations 1998 contains an express limitation: the Regulations extend to Great Britain only. The Employment Judge erred in treating it as an implied limitation capable of modification through European law. No provision of the Working Time Directive 2003/88/EC was identified as extending the right to employees working outside the European Union. The holiday-pay claim was dismissed.

• Employment Appeal Tribunal: The appeal from the Employment Judge’s decision sent on 20 September 2011 was allowed. The unfair-dismissal and accompanying-right claims were remitted to a different Employment Judge. The Respondent’s cross-appeal was allowed and the holiday-pay claim was dismissed.