Creditsights Ltd v Dhunna

An employee who both works and lives abroad will ordinarily fall outside the territorial scope of section 94(1) of the Employment Rights Act 1996. The employee must show an especially strong and sufficiently strong connection between the employment relationship, Great Britain and British employment law.

The inquiry compares the factual and commercial connections of the employment with the jurisdictions concerned. It does not compare the relative merits or generosity of British and foreign employment-law systems. The exercise is evaluative rather than formulaic. An employment tribunal that has substantively assessed the competing connections does not err merely because it has not expressed that assessment in prescribed language.

The respondent, formerly employed by the appellant, was dismissed while working and living in Dubai. He brought claims for unfair dismissal under section 94(1) of the Employment Rights Act 1996 and for breach of the right to be accompanied at a disciplinary hearing under section 10 of the Employment Relations Act 1999.

The Employment Tribunal held that it lacked territorial jurisdiction over both claims. The Employment Appeal Tribunal, Slade J, allowed the employee’s appeal and remitted those claims to a differently constituted tribunal, holding that the tribunal had not carried out the required comparative exercise. The employer appealed. The central issue was whether the tribunal had made an error of law when evaluating the employee’s connections with Great Britain and British employment law.

1. The court unanimously allowed the appeal. It set aside the Employment Appeal Tribunal’s remittal order and restored the Employment Tribunal’s dismissal of the unfair-dismissal and right-to-be-accompanied claims.

2. Section 94(1) of the Employment Rights Act 1996 has an implied territorial limitation. The normal rule is that the place of employment is decisive. An employee who works and lives abroad is within the provision only exceptionally, where the employment relationship has a sufficiently strong connection with Great Britain and British employment law. A truly expatriate employee requires an especially strong connection.

3. The required comparison is not an inquiry into the relative merits, availability or employee-friendliness of British and foreign labour-law systems. It is an evaluation of the factual connections between the employment relationship and Great Britain, British employment law, and the other jurisdictions concerned. The guidance in Lawson [2006] ICR 250 supplies illustrations, not an exhaustive or rigid classification.

4. A comparative evaluation need not be conducted in formulaic terms. The Employment Tribunal had carefully considered the employee’s overseas role, management from India and New York, Asian accounts, intended move to Singapore, and the limited and administrative nature of his London links. Its conclusion that he lacked the necessary connection was open to it and was entitled to respect as an evaluative decision of the primary fact-finder.

5. An English contract and an English-incorporated employer did not themselves displace the general rule. The parties had agreed that the same territorial limitation governed the section 10 claim under the Employment Relations Act 1999.

• Court of Appeal (Civil Division) — allowed the employer’s appeal and restored the Employment Tribunal’s dismissal of the two territorial-jurisdiction claims: [2014] EWCA Civ 1238.

• Employment Appeal Tribunal — Slade J allowed the employee’s appeal on the unfair-dismissal and right-to-be-accompanied claims and remitted them to a differently constituted tribunal; she allowed the employer’s cross-appeal on holiday pay. Order dated 5 April 2013, Appeal No UKEAT/0246/12/LA.

• Employment Tribunal — Employment Judge Sigsworth held that the tribunal had no territorial jurisdiction over the unfair-dismissal and right-to-be-accompanied claims, but had jurisdiction over the holiday-pay claim. Judgment sent on 20 September 2011.