UK: Unfair Dismissal: Can Employees Who Work Abroad Bring Claims?

Last Updated: 18 July 2005
Article by Christopher Booth

Originally published July 2005

There has been considerable confusion in recent years over the extent to which employment tribunals can hear unfair dismissal claims brought by individuals working abroad. The problem arises because although the right to claim unfair dismissal is a statutory right, the governing legislation - the Employment Rights Act 1996 - is silent on the issue. Some light was thrown on the matter last year when the Court of Appeal in Lawson v Serco held that unfair dismissal rights only apply to ‘employment in Great Britain’. However, as the recent case of Crofts v Cathay Pacific Airways Ltd shows, that test may be easy to state but in practice may be very difficult to apply.

The Hong Kong connection

The Crofts case concerned a group of pilots who had been employed by Hong Kong registered companies within the Cathay Pacific group. Their contracts were governed by Hong Kong law and their salaries paid into Hong Kong bank accounts. In addition their training and flight instructions were given in Hong Kong. On the other hand they had chosen to be based in Europe which meant they flew in and out of Heathrow. Following the termination of their employment they attempted to claim unfair dismissal in Great Britain.

The employment tribunal allowed their claims to proceed and the Court of Appeal subsequently upheld that decision. Recognising that the Serco test was extremely difficult to apply, the Court concluded that whilst the base of the employees was not decisive it was a highly relevant factor in determining where the pilots were employed. Accordingly, despite strong connections with Hong Kong, the pilots were employed in Great Britain and could bring their claims here.

Practical Considerations

The Crofts case is unlikely to be the end of the matter as an appeal in Lawson v Serco is due to be heard by the House of Lords in November. It remains to be seen whether the test of employment in Great Britain will be approved - it was subject to strong criticism by the Master of the Rolls in the Crofts case and so may not be. In the meantime employment tribunals may decide to stay unfair dismissal claims with a foreign element, pending the House of Lords' decision.

EAT Considers the Right to be Accompanied

A worker who is required by his employer to attend a disciplinary or grievance hearing has a right under the Employment Relations Act 1999 to be accompanied at that hearing by a colleague or trade union official of his choice. Section 13 of the Act defines disciplinary hearing to include a hearing which could result in a formal warning or the taking of some other action against the worker.

The scope of this definition has been examined recently in the case of Skiggs v South West Trains Ltd. In that case the EAT held that a meeting to investigate a formal grievance against an employee was not a disciplinary hearing for these purposes provided it remained a fact finding exercise throughout. The right of accompaniment therefore did not apply.

Practical Considerations

Whilst the Skiggs case provides useful guidance on the extent of the employer's obligations in this area, there is of course nothing to stop an employer allowing workers to be accompanied at investigation meetings if it so wishes. However, where it chooses not to, it must be careful to ensure that the investigation meeting does not stray into disciplinary territory.

Do You Need To Know…?

Yet More TUPE Delay

Long awaited changes to the TUPE Regulations, which were due to come into force on 1 October 2005, are to be delayed. Apparently the timetable has had to be revised because of the large number of responses to the DTI's recent consultation exercise on the draft regulations. The DTI now hopes to be able to lay revised Regulations before Parliament in the autumn so that they can come into force on 6 April 2006.

Updated Data Protection Code Now Available

A new version of the Employment Practices Data Protection Code, which aims to help employers understand and comply with the Data Protection Act, has just been published.

This consolidates the 4 individual parts of the Code into one document, covering recruitment, employment records, monitoring at work and health information. It also updates key definitions to take account of the Court of Appeal's decision in Durant v Financial Services Authority. For example ‘personal data’ is now defined as information which relates to an identifiable living individual and affects that individual's privacy in the sense that the information has the individual as its focus or is otherwise biographical in nature. The mere mention of a person's name in a document will not satisfy this definition. However as soon as privacy is affected (e.g. because the document gives the individual's contact details) the information becomes personal data and falls within the scope of the data protection regime.

The revised Code can be viewed at:
www.informationcommissioner.gov.uk/eventual.aspx?id=437

Duty to Consult on Pension Scheme Changes

The Department for Work and Pensions is consulting on draft regulations which will prevent employers from making major changes to their pension schemes without consulting scheme members. These proposals, which apply to both occupational and personal pension schemes, are to be introduced gradually. Businesses with over 150 employees will be covered from 6 April 2006, those with over 100 employees from April 2007 and those with over 50 employees from April 2008.

Examples of the types of change that will trigger the duty to consult include increasing the age when benefits become payable, introducing contributions from members where none was payable before and reducing employer contributions to money purchase schemes.

Responses to the consultation should be submitted to the DWP by 26 August 2005. The consultation document is available at:
www.dwp.gov.uk/publications/dwp/2005/occ_pen_schemes/oppscer06.pdf.

Cases referred to in this update:

Durant v Financial Services Authority [2003] EWCA Civ 1746; Lawson v Serco [2004] ICR 204; Crofts v Cathay Pacific Airways Ltd [2005] EWCA Civ 599; Skiggs v South West Trains EAT [2005] IRLR 459.

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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