James Thorp & Anor v Shuhdi Ali

Where an employee works partly in Great Britain and partly abroad, the territorial reach of the Employment Rights Act 1996 depends on whether the connection between the circumstances of the employment and Great Britain and British employment law is sufficiently strong. An Employment Tribunal must make findings which disclose its application of that question. A finding that a worker was based in the United Kingdom, without findings about the work actually done there and the connection with the foreign business, may be insufficient.

An oral employment contract may be established by the parties’ discussions, communications and subsequent dealings. The tribunal need not label each stage as offer and acceptance if its findings adequately establish a sufficiently certain binding agreement.

The claimant lived in the United Kingdom and, under an alleged oral arrangement with the two respondents, carried out work supporting companies owned by the second respondent in Qatar. He travelled to Qatar regularly and chose to remain there for about eight months after the start of the Covid restrictions. He alleged that his agreed salary was unpaid during that period.

The Leeds Employment Tribunal upheld claims for unauthorised deductions from wages and failure to provide a statement of employment particulars. It found an oral contract with both respondents and held that the claimant was based in the United Kingdom, so that the Employment Rights Act 1996 applied. The respondents appealed.

The central issues were whether the Tribunal had found a binding contract and whether it had adequately applied the territorial-reach test.

1. Appeal allowed in part. The Employment Appeal Tribunal dismissed the challenge to the finding of an oral contract. Read in the context of the case advanced below, the Tribunal’s findings established that the claimant agreed to work for both respondents, for a salary of £30,000 a year, in support of the second respondent’s companies. The communications and subsequent payments and dealings were capable of showing a sufficiently certain binding agreement. The Tribunal was not required to attach separate legal labels to invitation, offer and acceptance.

2. The Tribunal’s conclusion on territorial reach was unsafe. The governing inquiry under the Employment Rights Act 1996 was whether the connection between the circumstances of the employment and Great Britain and British employment law was sufficiently strong to make it appropriate for the Tribunal to determine the statutory claims. The claimant was not wholly expatriate, but his work concerned Qatari companies and he had remained in Qatar during the period of the deductions.

3. The Tribunal did not identify the applicable test or explain the findings on which it concluded that the claimant was based in the United Kingdom for work purposes. Its reasons did not show what work was performed in the United Kingdom, how it was performed from there, or why the necessary connection was sufficiently strong. The conclusion could therefore not stand: Ravat v Halliburton Manufacturing and Services Ltd [2012] ICR 389 applied.

4. The Tribunal’s judgment was set aside pending determination of territorial reach. That issue was remitted, if practicable, to the same Employment Judge for rehearing, with scope for further evidence or submissions as appropriate.

• Employment Appeal Tribunal: Appeal allowed on territorial reach and dismissed on contractual formation; the territorial issue was remitted: [2023] EAT 21.
• Leeds Employment Tribunal: Upheld claims for unauthorised deductions from wages and failure to provide a statement of employment particulars, finding an oral contract with both respondents.