British companies have been facing increasing numbers of employment claims from both British and foreign nationals working abroad. We explain how tribunals decide whether or not they have jurisdiction to hear these claims.
The basic rule: no claim in Britain if employment abroad
The mere fact that an employer is British will not be enough for an employee working wholly abroad to be able to bring proceedings in the British employment tribunals. As a general rule that remains the case even if the employee is a British national, was recruited in Britain and is employed under an English law contract.
If the work is done partly abroad and partly in Britain, employment tribunals are likely to retain jurisdiction if the employee has a home in Britain and the amount of work they do in Britain is significant. They are likely to more chary of accepting claims from foreign nationals working partly in Britain, particularly if they do not have a home here and the contract is not governed by English law.
Nearly 10 years ago that House of Lords decided that exceptions could be made in unusual cases where, despite the fact that the employment was wholly abroad, there was still a stronger connection with Britain than the foreign country where the employee worked.
The categories of exceptional cases recognised by the House of Lords comprised:
- Peripatetic employees – for example airline pilots who have a base in the UK despite working abroad
- Workers in a British enclave abroad - for example on a military base overseas
- Workers posted abroad to represent the employer’s British business – for example foreign correspondents of British newspapers.
In recent years other examples have been added to this list including:
- International commuters – where workers remain living in Britain but commute abroad to do their work
- Remote workers – where the work is in effect being done in Britain via remote access even if the worker is living abroad.
Claims involving EU law
In some cases employment tribunals have been prepared to accept jurisdiction in relation to claims involving rights derived from EU directives, even if the close connection test set out above is not satisfied. This will apply where this is in practice the only way of ensuring that the worker has an effective remedy for breach of these rights, and the employee has been working in another member state.
The best-known example involves a claim for breach of the working time regulations brought by a German lorry driver with no fixed place of work. He worked wholly abroad but for a company registered in Britain under an English law contact. Given the uncertainties about whether he would be entitled to enforce this claim in another jurisdiction, his claim was allowed to proceed in the employment tribunal. However he was not allowed to continue with his unfair dismissal claim, since this was a purely domestic right.
Things would be a lot clearer if our employment legislation made express provision about its territorial scope. Both the Employment Rights Act and our discrimination legislation used to include express wording about this. Despite extensive case law since this express wording was removed, things are still not quite as clear as they were before.
However as a rule of thumb the greater the number of connections the employment has with the UK, the greater the chance of an employment claim proceeding against a UK employer. If the employment is wholly abroad and the employee is not living in the UK, then the chances of a successful claim are very small in most standard employment situations. Things become less clear if the worker spends a significant amount of time in the UK, even if most of the duties are abroad. In such circumstances additional features such as the choice of law clause and the nature of the employee’s personal ties with the UK assume greater importance.