Olsen v Gearbulk Services Ltd & Anor

For a peripatetic employee, the territorial application of unfair-dismissal rights depends on whether the employment has a sufficiently strong connection with Great Britain and British employment law. Physical work in Great Britain is important but is not conclusive. The tribunal may consider the employee’s base, home, international role, contractual choice of law and jurisdiction, autonomy, and deliberate arrangements limiting connection with the United Kingdom.

Under Article 18(2) of the Brussels Regulation, a group company providing internal services is not, without authority to represent or bind the overseas employer in dealings with third parties, that employer’s agency. Under Article 8(4) of the Rome 1 Regulation, the applicable law may be that of the country with which the contract is more closely connected.

The claimant, a Danish national living in Switzerland, was employed by a Bermudian group company under a contract governed by Bermudian law and subject to Bermudian jurisdiction. He held an international role and worked in several countries, including for just under half of his working time in England. He had declined an earlier English contract and had arranged his affairs to avoid United Kingdom tax residence.

Following his dismissal, he brought claims including unfair dismissal, automatic unfair dismissal for protected disclosure, written reasons, and a contractual bonus claim. The Employment Tribunal held that his employment lacked a sufficiently close connection with Great Britain and British employment law. It also rejected jurisdiction under Article 18(2) of the Brussels Regulation and held Bermudian law applicable.

On appeal, the claimant withdrew his challenge to the finding that the first respondent, rather than the English group company, was his employer. The central issues were territorial scope, international jurisdiction, and applicable law.

1. Appeal dismissed. The Employment Tribunal was entitled to find that the claimant’s employment did not have a sufficiently close connection with Great Britain and British employment law for section 94(1) of the Employment Rights Act 1996 to apply.

2. The question whether section 94(1) applies is one of law, but the sufficient-connection assessment is a question of degree founded on fact. Where the tribunal directs itself correctly, its factual conclusion attracts considerable respect and is not displaced unless perverse.

3. The claimant was properly treated as a peripatetic employee based in Switzerland in order to perform an international role. His substantial work in England was not decisive. The tribunal could rely on his Swiss home and working base, his autonomy as to where he worked, his rejection of an English contract, and his free and deliberate choice of Bermudian law, Bermudian jurisdiction, and arrangements reducing his United Kingdom connections. It was entitled, and in the circumstances bound, to take account of those choices.

4. The Employment Judge erred by considering the unamended ET1 when deciding whether the contractual dispute arose from the operations of an agency under Article 18(2) of the Brussels Regulation. That error could not affect the result. On the findings, the English group company merely supplied administrative and HR services. It had no authority to bind the Bermudian employer and did not represent it in transactions with third parties. It was therefore not its agency within Article 18(2).

5. The applicable instrument was the Rome 1 Regulation, rather than the Rome Convention. Even assuming that Articles 8(2) or 8(3) pointed to Great Britain, Article 8(4) led to the same result: the contract was more closely connected with another country. The claimant’s challenge to the applicable law therefore also failed.

• Employment Appeal Tribunal: appeal dismissed: [2015] UKEAT 0345_14_2804.
• Employment Tribunal, London South: Employment Judge Elliot’s reasons, promulgated on 22 May 2014, rejected the claimant’s statutory claims on territorial-scope grounds and rejected jurisdiction for the contractual claim.