Seahorse Maritime Limited v Nautilus International (a trade union) UKEAT/0281/16

Why care

The territorial scope of unfair dismissal claims has been found to apply to overseas employees including peripatetic employees, expatriate employees and those with an equally strong connection with Great Britain (Serco Ltd v Lawson and other cases (2006)). In the more recent case of Ravat v Halliburton Manufacturing and Services Ltd (2012) the Supreme Court stated that where an employee’s place of work is not Great Britain, the key question is whether the connection with Great Britain is sufficiently strong that Parliament would have regarded it as appropriate for a tribunal to deal with the employee’s claim.

However, until now the extent of the territorial scope of s188 of Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA) concerning the right to be consulted about collective redundancies has rarely been considered.

The case

Seahorse Maritime Limited (SH), which is incorporated in Guernsey, employs crews of a variety of nationalities for ships owned by a third party, Sealion Shipping Limited (Sealion). SH used Farnham Marine Agency Limited (FMA) as its UK administrative agent to carry out the administration with respect to employees.

Although SH employees’ contracts of employment did not allocate them to a particular ship, in practice most stayed on the same ship during their four to six week roster. Most ships remained stationary, although a few moved around oilfields and around the world. Their contracts were also expressed to be governed by English law and employees were told to contact FMA about any administrative queries.

In 2015 Sealion decided to take four of its ships stationed in the UK out of service. FMA emailed the ships’ managers to inform the crews that there was risk of redundancies and around October 2015 redundancies took place.

Nautilus International (NI) is a trade union which is recognised by SH. NI brought a claim in the employment tribunal arguing that the UK domiciled employees of SH were entitled to a protective award for SH’s failure to collectively inform and consult with the employees. The employment tribunal upheld the claim. It found that the ships of the fleet on which the employees were employed were one establishment for the purposes of s188 and that the collective consultation obligations under s188 TULRCA applied to the UK domiciled employees who were working on those ships.

SH appealed to the EAT which dismissed the appeal. It found that the employment tribunal had correctly applied the principles on determining an “establishment”. The EAT then considered whether the tribunal had jurisdiction to consider the TULRCA claims. It applied the test in Ravat and held that the seafarers living in the UK were international commuters who had a sufficiently strong connection with the UK to give the tribunal territorial jurisdiction to determine the s188 claim. The employees were domiciled in the UK, their employment contracts were governed by English law and SH used FMA, a UK based agency, to manage administration with respect to the employees.

What to take away

This case confirms that the territorial scope of employees’ rights relating to their employer’s collective consultation obligations under s188 TULRCA is determined in the same way as rights under ERA 1996 and with reference to leading cases such as Ravat.