Generic selectors
Exact matches only
Search in title
Search in content
Back to all news

Unfair dismissal, territorial jurisdiction and the Higgs Boson

Daniel Tatton Brown appeared, together with Andrew Stafford QC, on behalf of the successful appellant, Creditsights Ltd, in Creditsights v Dhunna [2014] EWCA Civ 1238.  Here he discusses the implications of the case.

When Lord Hoffmann gave the
only substantive judgment of the House of Lords in
Lawson v. Serco Ltd [2006]
ICR 250, it was no doubt envisaged that the knotty question of territorial
jurisdiction of s.94(1) of the Employment Rights Act 1996 (“ERA 1996”)– the right not to be unfairly
dismissed – would be resolved once and for all. It was, after all, the first
time that their Lordships had considered the question, and they did so
unanimously in the context of three co-joined appeals.

Any such hopes were to prove
short lived.

It will be recalled that in Lawson Lord Hoffmann held that the right not
to be unfairly dismissed generally applied to an employee who is working in
Great Britain at the time of dismissal. He recognised two exceptions to that principle: peripatetic workers
who were based in Great Britain but worked abroad; and expatriate employees
working for an employer based in Great Britain for the purposes of a business
carried on in Great Britain (such as a foreign correspondent or those working
in a British enclave). He also, fleetingly, added this comment:

I have given two examples of cases in which s.94(1)
may apply to an expatriate employee: the employee posted abroad to work for a
business conducted in Britain and the employee working in a political or social
British enclave abroad.
I do not say that there may not be others,
but I have not been able to think of any and they would have to have equally
strong connections with Great Britain and British employment law.”

One employment judge likened this third category of
foreign worker to the Higgs Boson particle: something that existed in theory
but had never been identified in practice. The practical effect of the Lawson judgment was that foreign based workers
who sought to claim unfair dismissal tried to persuade tribunals that they fell
within one or other of Lord Hoffmann’s two examples of expatriate employee. If
Lord Hoffmann and his colleagues could not think of other examples it did not
seem a lot of point in anyone else trying to do so either.

However, life, and the law moves on. The boundaries
of knowledge expand. In July 2012 scientists announced that the vastly
expensive search for the Higgs Boson at the Large Hadron Collider at CERN in
Switzerland had finally resulted in the identification of a new particle “consistent
with” a Higgs Boson. In March 2013 it was formally announced that further
research “strongly indicated” that it was a Higgs Boson. Most people
appreciated that this was a momentous discovery without having the faintest
idea why.

Whatever its true significance, in terms of timing
the boffins had already been pipped to the post by the lawyers. In February
2012 the Supreme Court handed down judgment in Ravat v. Halliburton
Manufacturing and Services
[2012]
ICR 389, having previously revisited the question of
territorial jurisdiction in Duncombe v. Secretary of State for Children
Schools and Families (No 2)
[2011] ICR 1312. Mr Ravat seemed to be a real-life example of the
elusive third category of expatriate employee: he lived in Great Britain, but
travelled to Libya where he worked for 28 days at a time for a company based
near Aberdeen. All his work was performed outside the jurisdiction. Nevertheless,
he was able to pursue his claim for unfair dismissal. Their Lordships held that
although it was a question of law whether s.94 of the ERA
1996 applied to the particular employment it was a question of fact whether the
connection between the circumstances of the employment and Great Britain and
with British employment law was sufficiently strong to enable it to be said
that it would be appropriate for the employee to have a claim for unfair
dismissal in Great Britain. Lord Hoffmann’s reference to “strong connections”
had been given new life as a “sufficiently strong connection” test.

Following Ravat, the Court of Appeal considered the
question of territorial jurisdiction in
Bates van Winkelhof v. Clyde
& Co LLP and another
[2013] ICR 883
– a case better known, of
course, as the leading authority on the question of whether an LLP member is a
“worker” for the purposes of the ERA 1996. (This question went to the Supreme
Court: see [2014] ICR 730. Leave to appeal on the territorial jurisdiction
question was refused). Elias LJ held that a comparative exercise – of the
strength of connection with Great Britain and British employment law compared
with another jurisdiction (in that case, Tanzania) – was appropriate when the
applicant was employed wholly abroad.

Now the
Court of Appeal have revisited it once again, in
Creditsights Ltd v Dhunna [2014]
EWCA Civ 1238
, judgment in which was handed down on 19 September 2014.

Mr
Dhunna was a British national who worked for a British subsidiary of a US
company, governed by English law. Having initially worked in London, he moved
to Dubai where he worked and lived at the time of his dismissal. He received
administrative support from the UK, but his line manager was based in New
Delhi.

His claim
for unfair dismissal was struck out by the Employment Judge (“EJ”). The focus
of the EJ was on
Lawson – the then leading authority. Much of the evidence and
judgment was concerned with whether Mr Dhunna was working for a “representative
office” of the UK employer, such that he could be said to fall within the first
category of expatriate employees recognised by Lord Hoffmann as being an
exception to the general rule that the place of employment was decisive. Having
held that he did not, the employment judge added,
en passant, that “Further,
he did not have strong connections with the UK and British employment law such
as would put him into the third, somewhat vaguely defined, category identified
by Lord Hoffmann”.

Mr
Dhunna’s appeal against this decision was allowed by Slade J: see
Dhunna
v Creditsights
[2013] I.C.R. 909. She held that the employment judge
had not carried out a comparison between the strength of connections between Mr
Dhunna and Great Britain and British employment law (on the one hand), with the
strength of connections with Dubai “to the extent now required by the
authorities decided since
Lawson” (namely, DuncombeRavat and Bates
van Winkelhof
). She remitted the question of territorial jurisdiction
to a new tribunal.

The Court of Appeal has now restored the
decision of the EJ. Rimer LJ (with whose judgment Floyd and Mancur LLJs agreed)
reviewed
Lawson, the two Supreme Court authorities, and Bates
van Winkelhof
. Essentially, he held that the EJ’s conclusion about the
strength of Mr Dhunna’s connections with Great Britain, quoted above, was
determinative of the key question, which was whether the employee has
demonstrated a sufficiently strong connection between his employment
relationship and Great Britain and British employment law to take the case out
of the general rule that it is very unlikely that someone working abroad would
be within the scope of s.94(1) of the ERA 1996.

He also had
“no hesitation” in rejecting the submission made on behalf of Mr Dhunna that
the critical comparison that was required was between the system of employment
legislation available in Great Britain and that available in the jurisdiction
where the employee was working at the time of dismissal, with a view to
determining which is the better system of law.
The object of the exercise was not, Rimer LJ held, to decide which
system of law was more or less favourable to the employee: it was the “sufficiently
strong connections” test referred to above.

Thus the
Higgs Boson of employment law now takes centre stage. No longer will litigants,
in the words of Lady Hale in
Duncombe “torture the circumstances of one employment to make it fit one of
[Lord Hoffmann’s] examples” in
Lawson. Instead, the fundamental
question, relevant to the myriad scenarios of international employment, will be
whether those working abroad can show a sufficiently strong connection with Great
Britain and British employment law for it to be inferred that Parliament
intended that the employee should be permitted to bring a claim for unfair
dismissal under the ERA 1996.

Relevant Members
Shortlist Updated