UK: Unfair Dismissal Rights And Employees Working Overseas

Last Updated: 19 March 2012
Article by Blair Adams

Ravat v Halliburton Manufacturing and Services Limited [2012] UKSC 1

The Supreme Court has held that an employee who carried out all his work outside the UK could nevertheless bring a claim of unfair dismissal in a UK employment tribunal because his employment had a "substantial connection" to the UK.

Facts

Mr Ravat was a UK national who lived in the UK. He was employed by a UK subsidiary of the Halliburton group. In 2003, he accepted an assignment that involved a rotational working pattern of 28 working days in Libya, followed by 28 days home leave in the UK. His work in Libya was for a German subsidiary of the group and he reported to management based in Cairo, although in relation to his employment situation he dealt with human resources departments in the UK and Libya. His travel costs and overseas accommodation costs were paid by Halliburton, who classified him for internal purposes as a "UK commuter", reflecting the fact that when he took on the assignment he remained employed on his UK salary and benefits package. He was paid in Sterling into his UK bank account and paid UK income tax and national insurance contributions.

He was dismissed for redundancy in 2006 and sought to establish his right to bring a claim of unfair dismissal in the UK employment tribunals.

Decision

The Supreme Court held that the UK employment tribunals had jurisdiction to hear his claim on the basis that the "substantial connection" in fact between his employment and the UK brought the claim within the scope of the Employment Rights Act 1996 ("ERA 1996"). There are no longer any provisions in the ERA 1996 which limit its territorial extent. Therefore employees working overseas whose employment has a substantial connection with the UK can be presumed to fall within its scope.

The category of employment with a "substantial connection" to the UK exists in addition to the other categories of "expatriate" employees who, in the earlier case of Lawson v Serco Limited [2006] UKHL 3, were identified as also being within the scope of the ERA 1996, namely:

  • employees posted abroad for the purpose of a business carried on in the UK e.g. a foreign correspondent of a British newspaper
  • peripatetic or mobile employees whose base is in the UK e.g. air crew; and
  • employees working in a British enclave overseas e.g. at a UK diplomatic mission or military base.

Implications

The Supreme Court judgment gives employment tribunals enormous scope to make a decision on jurisdiction based on the facts of any case. The "substantial connection" that it must find need not be based on the inherent characteristics of the employee's job and may, as in this case, be based on surrounding factors. The range of factors that can be taken into account in considering the strength of connection is not limited.
The purely fact-based test makes it difficult to predict how a tribunal will approach a particular factual scenario, and also difficult to appeal against tribunal decisions unless the tribunal's analysis of the facts is perverse.

Although earlier cases have found a "substantial connection" with the UK where the employee has been employed to work abroad by the UK government or in a UK government sponsored enclave, this is the first authority on the application of the principle to employment in the private sector.

The Supreme Court's decision in this case will apply to all types of unfair dismissal claim (including whistleblowing claims) but also to other claims under the ERA, including unlawful deduction from wages and claims for statutory redundancy payments.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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