Overseas but under the law

The territorial scope of the Employment Rights Act 1996 (ERA 1996) is a much-litigated issue: see e.g. Lawson [2006] UKHL 3, Duncombe (No 2) [2011] UKSC 36, and Ravat [2012] UKSC 1. The Court of Appeal recently handed down a unanimous judgment in two appeals, British Council v Jeffery; Green v SIG Trading Ltd [2018] EWCA Civ 2253 (“Jeffery/Green”).

In Jeffery/Green, both employees lived and worked wholly overseas. Under the relevant case law, they were “true expatriates”. Jeffery presented a claim to the employment tribunal (ET) for unfair constructive dismissal, under s 94(1) ERA 1996, amongst other claims. Green presented claims to the ET for detriment and dismissal due to protected disclosures, under ss 47B and 103A ERA 1996.

Practitioners in this area will be familiar with the requirement for such claimants’ employment relationships to have a “sufficiently strong connection” with Britain and British employment law before the ET has jurisdiction on the substantive merits. I have taken issue elsewhere with the use of this standard by courts and tribunals: 2017 Juridical Review 279; however, for brevity, I will reluctantly use that phrase here.

This briefing addresses the parts of the judgment of general importance to this area of law.

Fact or law?

The first ground of appeal in Jeffery, also advanced in Green, questioned the scope of appellate review in “sufficiently strong connection” territorial scope cases. This issue centred on comments by Lord Hoffmann in Lawson and Lord Hope in Ravat, which potentially supported the position that, at some future point, a right of appeal on the existence of such a connection might be excluded due to the question being regarded as one of fact rather than one of law.

Underhill LJ acknowledged that there is always an appellate right of review where there are “classic errors of law”. He further held that, in cases where the sole issue is about the outcome of the “sufficiently strong connection” assessment, the EAT should not interfere unless it is satisfied that the ET’s assessment of the relevant factors is “wrong”: para 44. Longmore and Peter Jackson LJJ took a theoretically different approach to essentially the same practical outcome: paras 45, 140.

Choice of law clause

This factor’s relevance in the overall “sufficiently close connection” assessment has been controversial since its introduction in Duncombe (No 2). Jeffrey/Green provides a welcome, extensive treatment of this factor measured against s 204(1) ERA 1996, which provides that – for the purposes of ERA 1996 – the governing law of an employee’s contract is immaterial: paras 50-67. After a discussion of whether the relevant part of the UKSC judgment in Duncombe (No 2) on this point could be treated as per incuriam, Underhill LJ held it could not; Duncombe (No 2) was binding on the court in Jeffery/Green. Thus, such clauses remain a relevant factor. Underhill LJ also commented it was not necessarily wrong for the ET to attach less weight to this factor in the circumstances of its inclusion, which was a central aspect of the cross-appeal in Green: Jeffery/Green at para 132.

Relevant factors

There are two notable points here. First, Underhill LJ confirmed that where the ET judgment mentions relevant factors when outlining the facts earlier in its judgment but fails to take them into account in its reasons in circumstances where they are relevant and potentially decisive factors, there would be a valid basis for an appeal: para 72. Secondly, a point to note for any future litigation: Underhill LJ held that two fairly novel factors – (1) entitlement to a civil service pension; and (2) tax equalisation adjustment, which adjusted Jeffery's remuneration to cancel out the benefit of lower local tax rates – were relevant and also significant factors in this case.

ECHR, EU Charter rights and whistleblowing

The court dismissed a new point taken on appeal: namely, whether the whistleblowing provisions of ERA 1996 should be read as having a broader territorial applicability because of the apparent engagement of the ECHR and EU Charter rights. This point was considered in the context of claimants working outwith EU/ECHR states: para 125. Underhill LJ rejected this ground; the argument failed in the first essential step to establish jurisdictional applicability of the ECHR and EU Charter: paras 122-124. This outcome is a more authoritative endorsement of the EAT judgments in Smania [2014] UKEAT 0181/14 and Bamieh [2018] UKEAT 0268/16.

There is much for practitioners to consider in this extensive judgment. It provides an authoritative resolution to key issues such as the standard of appellate review, relevant factors, and differing territorial scopes for different rights.