TwistDX Limited & Ors v Dr N Armes & Ors

On a strike-out application, an Employment Tribunal must not decide disputed and potentially material facts where the claim is reasonably arguable. The applicant must show that the claim has no reasonable prospect of success. This is particularly important where international jurisdiction depends on fact-sensitive questions about the relationship between a corporate group, the claimants and their work.

For the Recast Brussels Regulation 1215/2012, the autonomous concept of employer may extend beyond the employer under domestic employment law. Rule 8 of the Employment Tribunal Rules was also not incapable of founding international jurisdiction. A failure to set out the law or give fuller reasons warrants intervention only if it is material. Reasons were inadequate, however, for refusing strike out against the UK individual respondents.

Two former senior employees of a UK company brought whistleblowing, health and safety, unfair dismissal and discrimination claims following their dismissals. They sued, among others, a US parent company, three US-based individuals and two UK-based individuals.

The Employment Tribunal refused applications under Rule 37 to strike out the claims. It held that international jurisdiction over the US company and US individuals was reasonably arguable, and that the UK individuals might be agents for the whistleblowing detriment claims.

The respondents appealed. The central issue was whether the claims against those respondents were so legally untenable that they had to be struck out without a substantive determination of international jurisdiction.

1. Appeal allowed in part. The Employment Tribunal did not err in refusing to strike out the claims against the US company and the US individuals. The respondents had not shown that the claims had no reasonable prospect of success.

2. Rule 37 requires a high threshold. Strike out is ordinarily appropriate only where the pleaded case has a clear knockout point, there is no material factual dispute and the claim is bound to fail. The Tribunal was entitled to regard the evidence, especially evidence about the US company’s control over the UK company, as incomplete and factually contested.

3. The Tribunal was entitled to treat it as arguable that the US company could be an employer for the autonomous purposes of Section 5 of the Recast Brussels Regulation 1215/2012. The authorities showed that, for jurisdictional purposes, the substance of the employment relationship, including control and group arrangements, may matter even if domestic law does not recognise a conventional contract of employment with that company. It was also not unarguable that the UK company was a branch, agency or other establishment of the US company. The Court of Justice authorities did not establish an absolute bar based on the separate legal personality of the alleged establishment.

4. The claimants accepted that the Regulation did not itself establish international jurisdiction over the US individuals. However, the respondents had not shown that Rule 8 of the Employment Tribunal Rules could not do so. The competing analysis of Rule 8 required proper factual findings, full argument and consideration of any alternative basis of international jurisdiction. It could not be resolved by strike out.

5. The Employment Judge’s concise reasons adequately explained the refusal to strike out the US claims. A failure to recite the applicable law or fuller reasons is material only where it discloses a substantive error or prevents the parties understanding why they won or lost.

6. The reasons did not, however, explain why the pleaded agency case against the two UK individuals was reasonably arguable. The appeal was allowed to that limited extent. Any renewed strike-out application concerning those individuals was remitted to the same Employment Tribunal if practicable, subject to proportionality and further case management.

• Employment Appeal Tribunal: Allowed the appeal only in relation to the inadequately reasoned refusal to strike out the claims against the UK individual respondents. It otherwise upheld the refusal to strike out: [2024] EAT 45.

• Employment Tribunal: Employment Judge Kurrein, in a judgment sent on 12 March 2021, dismissed the respondents’ strike-out applications. The Tribunal held that international jurisdiction over the US company and US individuals, and agency liability of the UK individuals, were reasonably arguable.