British Airways plc v Mak and others 2011 EWCA Civ 184

The Court of Appeal has held in this case that a tribunal had jurisdiction to hear race and age discrimination claims brought by 16 cabin crew who were resident in Hong Kong but who served on flights between Hong Kong and London. Their claims were based on the discrimination legislation prior to the Equality Act 2010 coming into effect. That Act has no provisions concerning its territorial scope. If a similar claim was brought now under the Act it is uncertain whether the tribunal would reach the same conclusion.

The case concerned the flight crews who faced compulsory retirement at 45, where international cabin crew working out of London were not retired. BA had argued that they did not employ the flight crew at an establishment in Great Britain and the tribunal did not have jurisdiction to hear their claims as they were only in British airspace for 30 minutes and this was followed by a de-brief and a short rest period in a hotel accommodation.

Key point: The test identified by the House of Lords in Serco v Lawson remains the main reference point for deciding disputed territorial jurisdiction in unfair dismissal cases.

  • Rome Convention: where does mobile employee “habitually” work?

Koelszch v Luxembourg (C-29/10)

The ECJ was asked to give guidance on how national courts should determine whether a lorry driver “habitually” worked in one country for the purpose of the Rome Convention.

Mr Koelszch was a lorry driver based in Germany who delivered all over Europe but mainly to destinations in Germany. He wanted to sue his employer under German unfair dismissal law. However, the employer was based in Luxembourg and his contract stated that it was governed by Luxembourg law. The European Court of Justice held that the national courts must look at all the factors including the place from which the employee carries out his transport tasks, receives instructions and organises his work and where his tools are situated as well as places where the transport is principally carried out, goods unloaded and the place to which the employee turns up to complete any tasks when deciding jurisdiction. This will favour the employee.

Under the Rome Convention contracts are governed by the law chosen by the parties. In the absence of choice, the contract of employment is governed by the laws of the country in which the employee habitually carries out his work in performance of the contract. Or if not in any one country by the law of the country in which the place of business through which he was engaged is situated. When Mr Koelszch brought a claim for unfair dismissal in Germany the German labour court declined jurisdiction. He then had to sue in the Luxembourg labour court claiming that German law should apply as these were more favourable to him. The court disagreed.

The ECJ held that where an employee works in more than one contracting state the country in which the employee “habitually works” is the country in which or from which (in the light of all the factors which characterise that activity) the employee performs the greater part of his obligations to his employer.

Key point: Employers who use employment contracts to impose a choice of law other than the law of the country in which the employee habitually works run the risk of having to comply with the employment law of both countries or the contractual laws of one country and the employment laws of another.

  • Jurisdiction for MOD unfair dismissal and sex discrimination claims

Ministry of Defence v Wallis and another 2011 EWCA Civ 231

Mrs Wallis and Mrs Grocott were both British citizens and married to serving members of the British armed forces who had been posted to organisations within NATO in Belgium and the Netherlands. The Court of Appeal held that the tribunal had jurisdiction to hear their claims for unfair dismissal and sex discrimination when they were dismissed by the MOD only because their husbands ceased to be employed by the armed forces as they had strong connections with Great Britain. Their terms and conditions of employment were subject to English law. The sex discrimination claim could also be brought in Great Britain because this was a directly enforceable right under an EU Directive.

Working outside Great Britain is a major obstacle in bringing unfair dismissal proceedings in a British tribunal but not if there are employment factors which have clear connections with Britain. They were not working in a British enclave and did not fall within the Serco categories but their situation was analogous. The court rejected the MOD’s suggestion that Mrs Wallis should bring her discrimination claim before the Belgian courts.

Key point: The case has wide significance for the MOD given the number of civilian and service personnel employed worldwide. As there is no single definition of an “expatriate employee” international employers with staff in the EU may find themselves before a British tribunal more often than not. It is also interesting to note that the MOD was not able to say whether or not it would plead state immunity in proceedings brought in the local foreign tribunal and this may have been a factor in the Court’s decision.