Court of Appeal holds UK Tribunal had jurisdiction to hear claims of unfair dismissal and sex discrimination brought by employees who worked entirely outside of the UK.

The MOD challenged the decision of an Employment Tribunal (“ET”) that it had jurisdiction to hear claims of unfair dismissal and sex discrimination brought by employees who had worked in Belgium and the Netherlands.

The MOD mounted its challenge primarily on the basis that the relationship between the employees’ work abroad and the MOD’s business in the UK, fell far short of the “strong connections” required to bring them within the jurisdiction of the UK Tribunal system.

The Court of Appeal held that the UK ET did have jurisdiction. It distinguished this case from the earlier decision in Bryant v Foreign & Commonwealth Office (in which it was held that the Tribunal had no jurisdiction to hear claims brought in relation to an individual who had worked at the British Embassy in Rome). The Court accepted that there were “clear, firm, sound connections with Britain” which gave the ET jurisdiction to hear the complaints of unfair dismissal and discrimination (see background).

Implications

While this case centred on an unusual set of facts and a working arrangement that is peculiar to the MOD, it does provide an indication of the potential scope of the “strong connection” principle laid down in Lawson v Serco. This is one of three principles that may be relied upon to seek to bring an atypical overseas working arrangement within the jurisdiction of the UK Tribunals for the purposes of an unfair dismissal claim.

In relation to the claim of discrimination, the Court of Appeal indicated its approval of the purposive approach adopted by the ET to give effect to the employee’s directly enforceable EU right. The decision lends support to the argument that the courts must interpret domestic legislation so that it is compatible with the EU law from which it derives, or, failing that, must disapply the territorial limitations relating to the domestic legislation (such as those contained in Section 10 of the Sex Discrimination Act).

This case was decided on the old discrimination legislation. No such territorial limits exist under the Equality Act 2010 (“the EqA”). The decision in this case suggests that the courts will be willing to “fill the void” in the EqA by deciding jurisdiction issues in discrimination cases by reference to the test already laid down in Lawson for claims under the Employments Rights Act 1996 (“the ERA”). This is a welcome development, as it suggests that a single test for territorial scope will develop by reference to the Lawson case, avoiding the confusion and complication of having two distinct tests for claims under the ERA and the EqA.

Background

The Claimants (Mrs Wallis and Mrs Grocott) were employed by the MOD in schools in Belgium and the Netherlands. The positions had only become available to them due to their status as UK dependants of serving members of the armed forces based overseas.

The Claimants were dismissed when their husbands left the armed forces. Mrs Grocott brought claims in the UK for unfair dismissal and breach of contract. Mrs Wallis brought claims in the UK for unfair dismissal, sex discrimination and breach of contract. The MoD did not accept that the Tribunal had jurisdiction to hear the unfair dismissal or sex discrimination claims, which it argued should be heard in Belgium and the Netherlands.

In relation to the unfair dismissal claims, the Court of Appeal acknowledged that the Claimants’ performance of their work entirely outside of Great Britain was a “potentially major obstacle” to bringing the claims in the UK. However, it accepted the Tribunal’s original decision that there were “clear, firm, sound connections with Britain” which served to overcome such an obstacle. These included that the Claimants were only eligible for their posts as dependants of serving members of the armed forces, and their terms and conditions of employment were governed by English law.

In relation to the claim of sex discrimination, the Court acknowledged that Section 10 of the Sex Discrimination Act 1975 expressly limited the jurisdiction of the UK Tribunals to cases involving work “wholly or partly in Great Britain”. However, it concluded that the Claimant would be able to pursue her claim of sex discrimination notwithstanding this restrictive provision because, outside of those statutory limits, she had directly enforceable rights deriving from the EC Directive on which the Sex Discrimination Act was based. The MOD constituted an emanation of the State, against which EC law is directly enforceable. The Court concluded that “once the British court is properly seized of the issue, it would be obliged to give effect to the directly enforceable right one way or another, irrespective of which national body of rules applies”.

In addition, the Court approved the Tribunal’s approach of adopting the principle of effective judicial protection in order to read in to Section 10 words to cover a person employed “wholly outside Great Britain but whose employment has sufficient connection with Great Britain to entitle her to protection of employment law in its jurisdiction”.