ESS Support Services LLP v Pabani & Anor (Contract of Employment)

An Employment Tribunal deciding whether unfair-dismissal and whistleblowing rights extend to employment performed abroad must weigh all relevant circumstances. The question is whether there is a sufficiently strong connection with Great Britain and British employment law. No single factor, including a period spent in Great Britain immediately before dismissal, is decisive.

Contracts forming part of the employment arrangements must be construed together and harmoniously. An implied contract with a parent company arises only where necessary. The extended agency-worker definition in Employment Rights Act 1996 section 43K does not apply where the individual did no work for the alleged end-user.

The claimant, a British citizen recruited in the United Kingdom, worked as Finance Director for ESS in Kazakhstan under several agreements. He later returned to the United Kingdom, was on gardening leave for about 200 days, and was dismissed. He claimed unfair dismissal and detrimental treatment for protected disclosures.

The Employment Tribunal held that the claimant was not employed by Compass Group plc, but that it had territorial jurisdiction over the claim against ESS. It treated the rotational worker contract as the true agreement and concluded that the claim had a stronger connection with the United Kingdom than Kazakhstan.

ESS appealed on jurisdiction and contractual-construction grounds. The claimant cross-appealed on his asserted employment or worker status with Compass Group plc.

1. Appeal allowed; cross-appeal dismissed. The Employment Tribunal was entitled to find that neither an express nor an implied contract existed between the claimant and Compass Group plc. The rotational worker contract was between the claimant and ESS. References to group companies did not make the parent company an employer. A contract could not be implied because the claimant’s work for the parent was adequately explained by his arrangements with ESS.

2. The claimant was not a worker of Compass Group plc under section 230(3)(b) of the Employment Rights Act 1996, because there was no contract with that company. Nor did section 43K(1)(a) apply. During the period relied upon the claimant was on gardening leave and did no work for the alleged end-user.

3. The Tribunal materially erred in deciding territorial jurisdiction. It misconstrued the agreements by treating the rotational worker contract alone as the true contract and disregarding the Kazakh agreements as a contractual disguise. The agreements had to be read together. On their proper construction, Kazakh law and Kazakh jurisdiction applied where the documents conflicted.

4. The Tribunal also erred in treating the claimant as analogous to the vulnerable workers in Autoclenz and in relying upon unequal bargaining power. There was no evidential basis for the alleged sham or disguise, nor for inferring that the true contract was one unlawful under Kazakh law.

5. The territorial inquiry required a weighing of every relevant circumstance under the sufficiently strong connection test. The Tribunal wrongly treated the claimant’s links with the United Kingdom during his final 200 days, when he did no work, as decisive. The foreign status of ESS, the place and nature of the work, and the agreed governing law and jurisdiction were all material. The ultimate issue remained one of fact and had not lawfully been determined.

6. The jurisdiction issue was remitted to a different Employment Judge. The original decision was sufficiently flawed that the Appeal Tribunal could not have confidence in remitting it to the same judge.

• Employment Appeal Tribunal: ESS's appeal was allowed and the claimant's cross-appeal was dismissed. The territorial-jurisdiction issue was remitted to a different Employment Judge.
• Employment Tribunal, London (South): In a decision dated 10 November 2014, sent to the parties on 17 November 2014, the Tribunal struck out the claims against Compass Group plc but held that it had jurisdiction over the claims against ESS.