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Unfair dismissal protection for those working overseas with “strong connections” to Great Britain
9 February 2012
The Supreme Court yesterday handed down an important decision for employers with an international workforce. In Ravat v Halliburton Manufacturing and Services Limited (“HMS”) the Supreme Court held that an employee who lived in Great Britain but worked in Libya on a “one month on, one month off” rotational basis, was entitled to the benefit of our statutory unfair dismissal protection as he had sufficiently “strong connections with Great Britain and British employment law”.
The test for determining the territorial scope of unfair dismissal protection under the Employment Rights Act 1996 (“ERA”) was laid down by the House of Lords in Lawson v Serco which identified three categories of employee who would qualify for protection being in broad terms: employees who ordinarily work in Great Britain at the time of dismissal; peripatetic employees who move between jurisdictions but are based in the UK at the time of dismissal; and expatriate employees, for example, those posted abroad by a British employer to further the business of that employer. These categories were never stated to be exhaustive but have nevertheless become a useful guideline in determining the right of overseas employees to unfair dismissal protection under the ERA.
The Supreme Court has now pushed beyond the Lawson v Serco categories confirming that it is not for the courts to lay down a series of fixed rules as to when statutory unfair dismissal protection applies. The starting point in determining jurisdiction for unfair dismissal is that “the employment relationship must have a stronger connection with Great Britain than with the foreign country where the employee works”. Despite the fact that Mr Ravat carried out his work in Libya for a company incorporated and based in Germany and he reported to an operations manager based in Libya and on policy issues to a finance manager based in Cairo, the Supreme Court held that Mr Ravat did have a stronger connection with Great Britain than Libya since he was employed at all times by HMS, a British registered company; he effectively commuted between Libya and his home in England; he was retained on the normal HMS pay and pensions structure which applied to other UK based employee; all human resources issues, including his termination, were handled by HMS in the UK; and his contract was governed by UK law and he was repeatedly reassured by HMS that his employment relationship was governed by UK law.
Employers with internationally mobile employees should review their existing arrangements in light of this decision. However, some comfort can be taken from the fact that the Supreme Court emphasised that the question of whether an Employment Tribunal has jurisdiction to hear an unfair dismissal claim will be a “question of fact and degree” requiring an overall assessment of the circumstances and that those who are truly expatriate because they not only work but also live outside Great Britain “require an especially strong connection with Great Britain and British employment law before an exception can be made for them”. Whilst in this case there were a number of specific factors contributing to the overall assessment that Mr Ravat had stronger connections with the UK than Libya this may be more difficult to demonstrate where different facts are in play.
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