When is there a sufficient connection with the UK for the purposes of statutory employment protections?
During the coronavirus pandemic, many employees have opted to work from overseas, and employees usually based outside the UK may have opted to work in the UK to suit personal circumstances. As well as having potential tax, payroll and work permit implications, there is also a significant risk of overseas employees working out of the UK developing UK statutory employment rights.
The Employment Appeal Tribunal (EAT) has recently looked at whether an employee of a US company, employed under a contract governed by the law of New York, could exercise UK employment rights as a result of time spent working in London for its UK subsidiary. The employee was working in the UK as part of a rotational placement under its Associate Program (which also saw her work for some time in Switzerland). When her time on the program finished, she was not offered a permanent position but her employment was permitted to continue to assist her in maintaining immigration status in the UK while looking for other work. When her employment was subsequently terminated, the employee brought proceedings in the Employment Tribunal (ET), under the Employment Rights Act 1996 and the Equality Act 2010, raising various complaints relating to her employment in the US, Switzerland and in the UK.
In allowing an appeal against the ET decision that it had jurisdiction to hear the claims, the EAT made the following helpful observations.
- In stating that it had "jurisdiction to hear the claim", the ET had failed to distinguish between those parts of the claim relating to her time employed in London on the one hand, and time employed in the US and Switzerland on the other and had failed to make clear that its jurisdiction could not extend to those claims that pre-dated the employee's move to London (even if they were relevant as background). Having identified the employment relationship as one that "evolved" over time, it was further incumbent on the ET to state when it found the employee's employment had fallen within reach of the relevant statutory protections.
- Although the ET had generally carried out a careful evaluation of the different factors relevant to the question of territorial reach in this case, it had apparently failed to have any regard to the fact that the employee's contract of employment was subject to New York law. This was a potentially relevant factor and failure to take account of it rendered the ET’s conclusion unsafe.
- Notably, the lack of permanence to the employee's position in London was not fatal to her ability to claim that she fell within the scope of British employment protections; the ET had been entitled to give weight to the length of time the claimant had been kept on, her integration within the London office and to her inability to move elsewhere (due to her immigration status) and therefore the appeal on this wider basis was dismissed.
This decision is a useful reminder of the criteria used to determine whether a claimant falls within the scope of UK statutory employment protection and of the importance of the contract clearly stating who is the employer and the jurisdiction any claims will be subject to; while employees cannot contract out of statutory protections that apply – the contractual provisions form part of any determination as to whether an employee can enforce UK statutory employment rights.