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Expat employees in the Tribunal: lessons from Lodge

Daniel Northall

For
those of us peculiar enough to pay close regard to developments in the
extra-territorial reach of domestic employment legislation, these have been
exciting times.

First
came the judgment of the Court of Appeal in
Creditsights v. Dhunna [2014]
IRLR 953
which concerned the right not to be unfairly dismissed contained
within s.94(1) of the Employment Rights Act 1996. Building on the earlier
jurisprudence of the Supreme Court in
Ravat v. Halliburton Manufacturing
and Services
[2012] ICR 38 and Duncombe
v. Secretary of State for Children Schools and Families (No 2)
[2011]
ICR 1312, the Court of Appeal sought to take a step back from the
compartmentalised, and in many ways misunderstood, test espoused by the House
of Lords in
Lawson v. Serco [2006] ICR 250. Instead it applied a unified
test. In general, the right not to be unfairly dismissed applied to an employee
who was working in Great Britain at the time of dismissal
unless the employee can show a sufficiently strong
connection with Great Britain and British employment law to enable it to be
said that Parliament would have regarded it as appropriate for a tribunal to
deal with the claim. Such a question did not require an analysis of the
relative merits of the two (or more) competing legal jurisdictions.

Now
comes the decision of the EAT in
Lodge v
(1) Dignity & Choice in Dying (2) Compassion in Dying 
UKEAT/0252/14/LA
a case which, curiously, was decided not on an analysis of DhunnaRavator Duncombe,
but by revisiting an unreported decision of the EAT preceding even
Lawson,
namely
Financial Times Ltd v Bishop EAT/0147/03/ZT.

The
facts

Mrs
Lodge, an Australian citizen, was employed jointly by the first and second respondent
as a Finance Manager. The respondents had one office located on Oxford Street,
London. This was their only place of business. The respondents’ work involved
campaigning for a change in the law in the UK in respect of terminally ill
adults.

Mrs Lodge’s
contract of employment expressly stated that it was governed by the law of
England and Wales.

In
December 2008 Mrs Lodge and her family decided to return to Melbourne,
Australia for personal reasons. By agreement, she was allowed to continue her employment
with the first and second respondent whilst resident in Australia through the
use of a Virtual Private Network (VPN).

She
continued to work in the role of Head of Finance in this manner from 1 January
2009 until her resignation on 28 June 2013. She returned to the UK for two
weeks each year in January in order to assist with the annual audit. Apart from
this, her work was exclusively undertaken from Australia.

Mrs
Lodge dealt with her own tax affairs in Australia and was responsible for
accounting for this to the Australian authorities. She was also subject to the
Australian tax regime. She did not pay tax or national insurance in the United
Kingdom.

Mrs
Lodge resigned claiming she was constructively unfairly dismissed and that she
had suffered detrimental treatment on the ground of having made a protected
disclosure. She brought proceedings in the London Central Employment Tribunal.

Her
claims were dismissed by the Tribunal on the ground that it did not have
jurisdiction to consider them.

Having
analysed the principles to be drawn from
Serco, Duncombe, Ravat and the EAT
decision in
Dhunna (the Court of Appeal had not at that stage handed down
its judgment), the Tribunal concluded that:

“…Parliament cannot reasonably be taken to
have intended that an employee who is an Australian citizen, who asked to be
allowed to work in Australia and was so permitted, who relocated herself and
her family to Australia, and who submitted herself to the Australian tax and
pension regimes as opposed to the British ones, should nonetheless be able to
bring a complaint of unfair dismissal or detriment in relation to
whistleblowing before the Tribunals in England and Wales. I find that the
nature of the connection between the Claimant’s employment and Great Britain
and British employment law is not such that it could be described as
“especially strong” in the Ravat sense, such that I could find that Parliament
could be taken to have intended that she should be able to bring her complaints
before the Tribunal.”
 

Mrs
Lodge appealed. 

The
judgment of the EAT

Lord
Hoffmann famously gave two categories of expatriate employee entitled to pursue
a claim of unfair dismissal in the Employment Tribunal. The first was the
employee posted abroad by a British employer for the purposes of a business
carried on in Great Britain. He illustrated his example with reference to the
earlier EAT decision of Financial Times v Bishop. Mr Bishop
was a sales executive originally working for the Financial Times in London. By
the time of his dismissal in 2002 he had been based in San Francisco for 3
years selling advertising space for the same employer.

The
EAT in
Lodge thought that Mrs Lodge’s circumstances were
indistinguishable from those of Mr Bishop such that the “key to [the] appeal”
lay within that decision. It did not think there was any significance in the
fact that Mr Bishop was posted to San Francisco whereas Mrs Lodge returned to
Australia by her own volition. What was important was that Mrs Lodge left for
Australia with the consent of the respondents and continued to undertake her
work exclusively for them.

Comment

What
is striking is that the EAT in
Lodge did not criticise either the
test applied by the Tribunal or its findings of fact. Rather, the EAT reasoned
that the Tribunal’s decision was incorrect by analogy with one of the categories
of expatriate worker given by Lord Hoffmann in
Lawson. 

That
might be considered something of a retrograde step. The whole purpose of the
unified approach of Ravat and Dhunna was to avoid reasoning by
analogy and to discourage parties from making the facts of their case fit the
“categories” prescribed by Lord Hoffmann.

Lodge also throws up an interesting question: is the extra territorial reach of the
Tribunal a question of fact and degree such that a judgment cannot be interfered
with absent a misdirection or perverse finding of fact; or is it a pure
question of law such that the appeal courts can overturn a lower decision on
the ground that it simply disagrees with that decision?
Ravat and Dhunna would suggest it is the former; Lodge the latter. 

Perhaps Lodge is best understood as an example of a Tribunal decision which was so
departed from received wisdom that it simply could not stand.

Either
way, we should not be so quick to consign the pre
Ravat and Dhunna authorities to the dustbin of history. 

 

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