Employment law claims guidelines are big mess

Conflicting rulings have confused the application of UK law when staff work

From 25 October 1999, section 32(3)
of the Employment Relations Act (ERA) 1999 repealed section 196 of the
Employment Relations Act 1996. Until then, the law had restricted an employment
tribunal’s jurisdiction over unfair dismissal cases and other statutory
employment protection and claims where, under the employee’s contract of
employment, they "ordinarily worked outside Great Britain".

The Government decided that international law and the principles of UK
domestic law were satisfactory without this provision to ensure our legislation
did not apply in inappropriate circumstances. But as long as there was a proper
link with the UK, it was considered right that UK law should apply.

It was also necessary to ensure that the Government fulfilled European Union
obligations with regard to the implementation of the Posted Workers Directive
(PWD). This opened up the possibility of claims from workers who are just
temporarily working outside the UK at the time, or are posted here from
elsewhere in the EU.

But the repeal of section 196 triggered a line of conflicting cases in the
Employment Appeal Tribunal (EAT), notably Lawson v Serco Limited (EAT/0018/02),
Bryant v The Foreign and Commonwealth Office (EAT/174/02), and Jackson v Ghost
Limited and Ghost Inc [2003] IRLR 824. The law is now a mess.

Last year in Lawson v Serco, the EAT held that as long as the employer
carries on business or resides in England and Wales or Scotland, an employment
tribunal has jurisdiction to hear a complaint under the ERA, wherever the
worker is employed. In contrast, the EAT in the subsequent case of Jackson v
Ghost held that for an employment tribunal to have jurisdiction, not only must
the employer carry on business or reside in England, Wales or Scotland, but
there must also be a "sufficient connection" with the claimant’s
employment in Great Britain.

The EAT decision in Jackson v Ghost was considered a reasonable compromise.
But the Court of Appeal decision in Lawson v Serco (23 January 2004) has raised
more questions than it solved. Serco is a company registered in England and
Wales with a head office in Middlesex. The company provided support services
for the RAF and civilian police on Ascension Island. Lawson was appointed as a
security supervisor. He is British and lived in England. He was interviewed in
England, paid in pound sterling in England and given a no-tax coding by the
Inland Revenue on the grounds that his work was on Ascension Island. In the
contract, no mention was made of any applicable law other than the law of

A dispute arose about his hours. He resigned and claimed constructive
dismissal. In light of section 196’s repeal, the question was whether he had a
claim for unfair dismissal under the UK employment tribunal.

The Court of Appeal, perhaps unsurprisingly, rejected the proposition that
the repeal of section 196 conferred the right on all staff not to be unfairly
dismissed, wherever they worked in the world. Furthermore, it also decided that
the employment tribunal had no jurisdiction to hear Lawson’s claim. He was
employed on Ascension Island, not in Great Britain. Apart from instances where
there is express provision to the contrary, the Act only covers employment in
Great Britain.

In an era of increasing transnational employment, this tighter test will
cause real difficulties for some employees. And the principles that apply to
contract claims and race, religious belief and sexual orientation claims are
different. Under the wording of certain discrimination statutes, for example,
an employee in Lawson’s circumstances might still be able to bring a claim in a
UK tribunal. This mismatch between unfair dismissal and discrimination statutes
is regrettable.

By John McMullen, Head of international employment law, Pinsents

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