Green v SIG Trading Ltd UKEAT/0282/16/DA
The Employment Appeal Tribunal has held that an objective test must be applied when determining whether an employee has a strong connection to the UK for the purposes of the employment tribunal's territorial jurisdiction to consider a claim.
Mr Green was employed in 2013 as the Managing Director of SIG Trading Limited, a UK registered company, for its business in Saudi Arabia. Mr Green had lived in the Middle East for over 15 years and had no home in the UK. He continued to live in Lebanon, commuting to work in Saudi Arabia for two to four days each week, only visiting the UK occasionally for work.
However, Mr Green reported to a manager based in the UK, where other support staff members for the project were also located. He was also paid in UK pounds sterling and his employment contract was a standard UK contract governed by English law which included references to British employment law protections.
As a result of financial pressures, SIG decided to close its business in Saudi Arabia resulting in Mr Green being made redundant. He subsequently brought a claim for unfair dismissal.
The Employment Tribunal rejected Mr Green's claims on the basis it did not have territorial jurisdiction, believing that he had stronger connections to Saudi Arabia than the UK. In so doing it found that the Saudi Arabia operation was financially independent of SIG's UK financial budget because losses in Saudi Arabia were not absorbed into the company's UK finances. Mr Green appealed.
The EAT allowed the appeal in part, ruling that the ET wrongly disregarded the fact that the parties had agreed that the contract would be governed by English law and that Mr Green was employed by a UK company: the focus should not have been on his role, but on who was employing him. It emphasised that the test for assessing Mr Green's connection to the UK was an objective one.
However, the EAT allowed SIG's argument that the UK-based management decision-making for operations in Saudi Arabia was a pragmatic and logistical arrangement and it did not add further weight to Mr Green's status. The case was remitted to the ET to decide whether UK statutory protections applied.
Although this case it yet to be reconsidered in the light of the EAT judgment, employers should take care when assessing which type of contract is suitable for an overseas employee: providing standard contracts governed by English law in such situations may create difficulties in the face of potential employment claims.