Territorial Jurisdiction and the right not to be

Unfairly Dismissed

In this article I review the Employment Appeal Tribunal decision in

the case of Dolphin Drilling Personnel PTE Limited –v- Alan Winks
and Dolphin Drilling Limited UK EATS/0049/08/BI which provides
further guidance, in addition to that provided by the House of Lords
in Lawson –v- Cerco Limited (2006) IRLR 289, as to the
determination of the issue whether an employee who does not
ordinarily work in Great Britain has the right not to be unfairly
dismissed as provided for by the ERA 1996.

The Facts

The salient facts are that the Claimant, a British citizen with a home
in Doncaster, was employed by Dolphin Drilling Personnel PTE
Limited (DDPPL), a Singapore company, as a storeman on an oil rig
in the Gulf of Mexico and latterly off the coast of Nigeria where he
was employed when his employment terminated. DDL, a UK
registered company, managed and operated the oil rig that the
Claimant worked on.

DDPPL provided crews to work on oil rigs and is situated in

Singapore where its Director, Human Resource Manager and
Coordinators are based.

The Tribunal’s Decision

The Tribunal found that the Claimant was employed by DDPPL

having determined that personnel functions were undertaken by
“real people” in Singapore and that the appropriate test to
determine the jurisdictional issue was simply whether the employee
had a “substantial connection” with Great Britain. In reaching its
conclusion the Tribunal accentuated several factors that it
considered to be indicative and contra indicative of a connection
with Great Britain.

The following factors, inter alia, were found to be supportive of a

connection with Great Britain:

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• The Claimant was a British national with stable residence in
Doncaster.

• He paid UK income tax and National Insurance contributions.

• His pay was administered by a company in Aberdeen and any

disputes were determined by DDL in Aberdeen.

• His work was carried out in and for the purposes of the business
of DDL, a UK registered company with its head office and
business headquarters in Aberdeen.

• His training, medical examinations and certification were

conducted in the UK.

• His Visa application for Nigeria showed his “official address” as

DDL in Aberdeen.

• The contract with DDPPL provided that it was subject to the law
of the “English Courts”.

The ET also identified several factors that were contra indicative of a

connection with Great Britain which included the fact that the
Claimant worked wholly outside Great Britain, the work that he
undertook at the material time was conducted off the coast of
Nigeria, his written contract showed that his employer was DDPPL, a
Singapore company, his travel arrangements were made by staff of
DDPPL from Singapore and his letter of dismissal was issued by
DDPPL.

The Tribunal concluded that in view of the factors, as outlined

above, the Claimant had a substantial connection with Great Britain
and therefore the Tribunal did have jurisdiction to consider his unfair
dismissal claim.

The Appeal

The Appellant, DDPPL, submitted that the Tribunal erred in law by

applying a “substantial connection” test and by so doing, failed to
have regard to the fact that the Claimant was employed by a foreign
company. Moreover, it was inconceivable that if the substantial
connection test was the universal test that should be applied in such
cases it was surprising that Lord Hoffman in the Lawson case did not
expressly say so.

Furthermore, the fact that an employee worked abroad for a British

company was insufficient to confer jurisdiction on the Tribunal
notwithstanding the existence of a substantial connection with Great
Britain. In which case, where an employee works abroad for a
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foreign company this would similarly be insufficient to confer
jurisdiction.

The Respondent submitted that the “substantial connection” test

was the relevant test to be applied, as it provided a meaningful
starting point from which the issue of jurisdiction would be
determined.

The EAT’s Decision

The Employment Appeal Tribunal (The Honourable Lady Smith

sitting alone) considered the relevant authorities and observed that
it was inconceivable that Parliament did not intend to place a
geographical limitation on the scope of the right not to be unfairly
dismissed. Moreover, in the Lawson case, Lord Hoffman said that,
Tribunals must consider whether Great Britain is the “appropriate”
jurisdiction. In this regard, Lady Smith described the
appropriateness of Great Britain’s jurisdiction as a key issue in
determining when it is apposite to confer a right to bring an unfair
dismissal claim and place a concomitant obligation on an employer
not to unfairly dismiss an employee.

The EAT emphasised that the jurisdictional question is a matter of

law that is to be determined at the time of the employee’s dismissal
and not when the contract was made, notwithstanding what the
parties may have agreed to the contrary as regards the appropriate
jurisdiction. Further, in cases of uncertainty such as where an
employee does not work wholly in Great Britain or is in Great Britain
but works in other jurisdictions the Tribunal must ultimately treat the
issue of jurisdiction as a matter of law and not fact.

Lady Smith, however, opined that an employee cannot be regarded

as ordinarily working in Great Britain where the employee does not
ordinarily work in Great Britain or cannot be regarded as doing so,
save in exceptional circumstances. Such circumstances will include
where the employee is recruited in Great Britain for a British owned
company and in furtherance of the company’s business, which is
distinguishable from a British company that carries on business
abroad.

In accepting the Appellant’s submission Lady Smith observed that

Lord Hoffman could not have intended to state that the test for
determining the issue of jurisdiction is one of a “substantial
connection”. If that had been the intention of Lord Hoffman it is
inconceivable that he did not expressly say so. Furthermore, if the
“substantial connection” test was determinative of the issue, it
would be satisfied where an employee resides in Great Britain and
receives a salary in pound sterling but regularly travels to and from

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Great Britain, funded by his foreign employer to work for the
employer abroad. Such an employee could not demonstrate a UK
base or place of work, neither are the indicative factors, as
mentioned, so close as to establish a UK base such that it would be
appropriate to find that jurisdiction exists.

In considering the Tribunal judgment Lady Smith concluded that the

Tribunal judge erroneously deployed a substantial connection test
and thereby disregarded the general rule, as referred to by Lord
Hoffman, that the place of employment is decisive and in
determining this issue Tribunals should consider whether the activity
in which the employee is engaged abroad constitutes conduct of his
employer’s business.

Conclusion

The EAT by this decision has brought to an end what was described
as a one man battle, albeit in good faith, to apply the “substantial
connection” test in determining the jurisdictional issue that arises
where an employee does not work wholly within Great Britain. The
EAT acknowledges that there may be cases where, by way of an
exception to the rule, it would be appropriate to find that jurisdiction
exists, but such cases appear to be limited to those cases where the
factors are such that it could almost be said that the employee’s
place of work or base of the employee’s work is Great Britain and
therefore it would be appropriate to find that there is a jurisdiction.
For example, in the case of expatriate employees who work abroad
for a British employer.

It is also worthy of note that the Post Workers Directive 96/71/EC

does not give employees from member states the right to claim
unfair dismissal or a redundancy payment, but affords some
protection as regards a “nucleus of mandatory rules for minimum
protection” for a limited period. The protection afforded by virtue of
the Directive relates to maximum work periods, minimum rest
periods, minimum paid holidays and rates of pay, and health and
safety at work.

For more information contact David Tyme, Head of

Employment via email at info@websterdixon.com by
telephone on +44 (0) 207 353 8300 or visit our website at
www.wbesterdixon.com.