James Thorp & Anor v Shuhdi Ali

The Employment Appeal Tribunal considered whether the Employment Rights Act 1996 applied to the claimant's work and whether a binding contract of employment had been formed orally. The Tribunal below had found an oral contract between the claimant and the two respondents and that the claimant was a "worker" entitled to bring claims for unauthorised deductions (section 13 ERA) and for failure to provide a statement of particulars (section 1 ERA). The EAT held that the ET permissibly found an oral contract and that those findings were sufficient to establish a binding agreement involving both respondents, but concluded that the ET had not adequately addressed the "sufficient connection" question governing the territorial reach of the ERA (applying the approach in Ravat v Halliburton). Because the ET's reasoning did not explain what facts it treated as establishing a sufficient connection with Great Britain, its conclusion on territorial reach was unsafe and was set aside and remitted for re-hearing.

The claimant, recruited orally by the respondents to work for Qatari companies owned by the second respondent, lived in the United Kingdom and travelled frequently to Qatar. He alleged unauthorised deductions from wages and failure to be given a statutory statement of principal terms. The Leeds Employment Tribunal (reserved judgment 3 August 2021, reasons 20 September 2021) found that the claimant had entered an oral contract with both respondents on a salary of 30,000, that he was "based in the UK" though he travelled to Qatar for work and that the Employment Rights Act 1996 applied, awarding sums for unauthorised deductions and for failure to provide a statement of particulars.

The respondents appealed to the Employment Appeal Tribunal on two principal issues: (i) whether the ERA extended territorially to the claimant's employment when the relevant conduct occurred while he was working in Qatar, and (ii) whether the ET had made sufficient factual findings to establish that a contractual offer of employment had been made such that an oral contract existed.

The EAT analysed the legal rules on territorial reach (including the principle of the "territorial pull of the place of work", the peripatetic/commuting expatriate distinction and the "sufficient connection" test as discussed in Ravat and related authorities). On contract formation, the EAT concluded the ET's factual findings (communications describing a salary, payments of 2,500 monthly, payments of travel and hotel expenses, and plural references to "our companies") were adequate to support the conclusion that an oral contract had been agreed with both respondents and that the ET did not err in law in so finding.

On territorial reach, the EAT found it unclear whether the ET had applied the required "sufficient connection" test and which factual findings it treated as establishing such a connection to Great Britain. The ET had not engaged with the relevant case-law or explained how the claimant's UK base and the nature of his work overcame the territorial pull of work performed in Qatar. For that reason the EAT allowed the appeal in part, set aside the ET's judgment on territorial reach and remitted that issue to the ET for re-hearing, preferably to the same judge.

Appeal allowed in part. The EAT upheld the ET's finding that an oral contract was made and that the claimant had been employed by both respondents, but held that the ET had not adequately applied or explained the "sufficient connection" test for the territorial reach of the Employment Rights Act 1996. Because the ET's reasoning did not identify the facts relied on to displace the territorial pull of the place of work, the EAT set aside the territorial-reach conclusions and remitted that issue for re-hearing.

Appeal from the Leeds Employment Tribunal (reserved judgment 3 August 2021; reserved judgment sent 11 August 2021; written reasons 20 September 2021) to the Employment Appeal Tribunal, neutral citation [2023] EAT 21.