Supreme Court finds that an employee working abroad has protection from unfair dismissal where terms of employment have a much closer connection with Britain and British employment law than any other system of law.

The central issue in this case was the correct interpretation of the principle laid down in the leading case of Lawson v Serco, that employees working and based abroad will only have the protection from unfair dismissal under British employment law in “exceptional circumstances”. The House of Lords in Serco had given two specific examples of such circumstances. The Supreme Court in this case had to decide whether there could be further examples and, if so, whether the circumstances of this case constituted one.

The Supreme Court held that there could be further examples of exceptional circumstances giving rise to protection.  The examples given in Serco were “merely examples of the application of the general principle” and it was wrong to “try and torture the circumstances of one employment to make it fit one of the examples”.

The court identified that the general principle appeared to be that “the employment must have much stronger connections both with Great Britain and British employment law than any other system of law”. The Supreme Court went on to determine that the circumstances of this case fell within the general principle, because:

  • The essential condition that the employer must be based in Great Britain had been satisfied
  • The terms and conditions of employment were either entirely those of English Law or a combination of English Law and those of the international institutions for whom the employees worked
  • The employees were employed in international enclaves due to commitments undertaken by the British Government and they had no particular connection with the countries in which they were situated
  • It would be anomalous for an employee employed by the British Government but based in Britain to have different protection to those employed in the same circumstances but who happened to be based in another country.

Implications

The Supreme Court in this case has broadened the scope of the “exceptional” principle so that it now includes circumstances where the employment has “such an overwhelmingly closer connection with Britain and with British employment law than with any other system of law”.

Employers based in Great Britain who have employees working and based overseas should be mindful of the extension of the principle, and the increased scope for their employees to be held to have the right to claim unfair dismissal in the UK on termination of employment.