Lodge v (1) Dignity & Choice in Dying (2) Compassion in DyingUKEAT/0252/14/LA

Why care

The Employment Rights Act 1995 is silent as to its territorial scope since the repeal of Section 196 (which provided that employees "ordinarily working" outside Great Britain "under the… contract of employment" did not have the right to bring ERA 1996 claims such as unfair dismissal) in 1999. Case law (in particular, Lawson v Serco) has since established that the following may generally bring claims for unfair dismissal, although these are only examples of a general principle and not an exhaustive list:

  • Employees who ordinarily work in Great Britain and are doing so at the time of their dismissal;
  • Peripatetic employees based in Great Britain
  • Expatriate employees in exceptional circumstances, such as employees working for a British employer operating within what amounts to an extra-territorial political or social enclave overseas, employers posted abroad by a British employer for the purposes of a business carried on in Great Britain
  • Employees who do not fit into the above categories, but have "equally strong" connections with Great Britain and British employment law.

In Ravat v Halliburton Manufacturing and Services Limited, the Supreme Court said that the principal question was whether an employee whose place of work was not in Great Britain had a "sufficiently strong" connection with Great Britain that Parliament would have regarded it as appropriate for an employment tribunal to hear the claim.

In this case, the EAT had to consider whether an employee working from her home in Australia had the right to bring a claim before an employment tribunal.

The case

The Claimant, an Australian national, began work with the First Respondent on 27 February 2008 as Finance Manager.  Her contract with the First Respondent was governed by the law of England and Wales and subject to the exclusive jurisdiction of the English courts. The Claimant worked from offices on Oxford Street, London.  However, from shortly after the commencement of her employment, she was able to work remotely via the VPN from her home in Ealing.

In December 2008, she and her family moved back to Australia for family reasons. She put forward a proposal to the Respondents whereby she would continue to be Head of Finance, but working from Australia using the VPN, which was accepted and took effect from 1 January 2009.

In October 2009 she became Head of Finance, employed jointly by both Respondents. She continued to work in Australia until she resigned in June 2013. Whilst in Australia, she took up Australian tax residence (meaning she paid a lower rate of tax than if she had transferred there as a foreign resident); she dealt with her own tax affairs in Australia and accounted for them to the Australian authorities; she was subject to the Australian pension regime; she paid no UK tax or National Insurance and the Respondents obtained a refund of UK contributions they had paid in respect of her during 2009.  Whilst working, she worked Australian hours of 8am – 5pm, but also made herself available from time to time during the evenings so that she could contact those in London during London office hours. She returned to London for two weeks each year for the annual audit, to attend the AGM and to attend an annual away day.

The Claimant brought a grievance using the grievance procedure set out in her contract of employment (which replicated the UK's statutory grievance procedure at the time she entered into her contract). Her grievance and her appeal were held in London, with the Claimant making submissions by email. Following the rejection of her appeal, the Claimant was then told she would face disciplinary action and as a consequence resigned, claiming constructive unfair dismissal.

The Employment Tribunal held that it did not have jurisdiction to hear her claim, because she had not been posted abroad by her employer (she had requested to go, and that request been agreed) so she could not be an expatriate employee as defined in Lawson v Serco.  In addition, the key question (under Ravat) was whether her employment had an especially strong connection with Great Britain and British employment law. Whilst the employer and its activities were in the UK and her contract was subject to the law of England and Wales and subject to the exclusive jurisdiction of the English courts, the employment judge held that Parliament could not reasonably have intended that an Australian citizen who has asked to move to Australia, has settled there, and paid Australian tax and pension contributions should be able to bring a claim in the UK.

The Claimant appealed. The EAT held that the Tribunal had jurisdiction to hear her claims. Whilst she did not fall "foursquare" within the expatriate employee category identified in Lawson v Serco, all the work she did was for the benefit of the Respondents' London operations and in that respect she (in requesting to work abroad) was no different from an employee who had been posted abroad by his or her employer. In Financial Times Ltd v Bishop (which was referred to in Lawson v Serco), the employee had been posted to San Francisco by his employer, in order to sell advertising space. The EAT in that case had said the question was whether he was working for a business in the USA, or as part of his employer's business in London.   The Claimant in this case was a "virtual employee" rather than a "physical employee" of the UK operations and should not lose the right to bring her claim.

What to take away

It is easy now for employees to work remotely and this is a clear decision focussing on the work being done and the connection to the UK. Following this decision and Bishop, it seems likely that an employee working overseas for the benefit of a British business will be protected.