The High Court has held that a UK trade union could apply for statutory recognition in respect of a group of employees notwithstanding that over 70% of the employees lived outside of the UK. It held that the Central Arbitration Committee (CAC) was right to apply the same test regarding the territorial scope of the relevant legislation as applies to individual unfair dismissal claims as determined by the Supreme Court in Ravat v Halliburton Manufacturing and Services Ltd.
NetJets Management Limited v CAC and another
NetJets operates a global fleet of private business jets. It has no set schedules, and customers choose where they fly from and to. In Europe, pilots may choose their own 'gateway' airport. The gateway airport is not, however, their base, but the airport where the pilots start and finish each of their 'tours'. Pilots may live anywhere in Europe, but must live within commuting distance of their gateway airport.
Skyshare (a UK trade union) applied to NetJets for statutory recognition under Schedule A1 of the Trade Union and Labour Relations (Consolidation) Act 1992 (TULR(C)A). It identified the proposed bargaining unit as all pilots who live in Europe.
NetJets argued that Schedule A1 did not apply to the proposed bargaining unit because the vast majority of the pilots lived outside the United Kingdom, and therefore outside the territorial scope of Schedule A1. The Central Arbitration Committee rejected the argument.
It was common ground that there was no express statutory territorial limit which applied to Schedule A1. Applying the principles established by the Supreme Court in Ravat, the CAC considered that there was a 'sufficiently strong' connection with Great Britain for Schedule A1 to apply. In doing so, it followed the decision in R (on the application of BBC) v Central Arbitration Committee, and determined that the group should be considered as a group, rather than considering each individual pilot. The key factors it relied upon were that:
- the pilots' employment contracts were with a company registered in Great Britain;
- the contracts were expressed to be governed by English law and subject to the jurisdiction of the English courts;
- the contracts contained terms relating to pay, hours and holidays (which would be the subject matter of collective bargaining if Skyshare's application was successful);
- the pilots had no "normal place of work" - their gateway airport could be changed at any time, and the contracts stated that the gateway airport did not constitute the pilot's place of work or base;
- although only 159 of the 779 pilots had a gateway in the UK, that was more than in any other single European country;
- although only 21.1% of flight departures were from the UK, again that was more than any other single European country;
- the pilots were paid either in Euros or, if they chose, in their local currency. Pilots were subject to the deduction of tax in Portugal with the exception of those with a UK gateway, who were subject to the deduction of tax in the UK; and
- all pilots paid UK National Insurance Contributions.
NetJets applied for judicial review of the CAC's decision.
The High Court held that the CAC had applied the correct tests and that there were no grounds to overturn its decision. In particular, it rejected NetJets' argument that Skyshare had to show that there was a stronger connection to the UK than any other jurisdiction
This is another case which concludes that, following Ravat, the test to be applied is whether employees have a "sufficiently strong" connection with Great Britain to enable it to be said that Parliament would have held it appropriate for the Court or tribunal to deal with the claim. It is not necessary to show that there is a stronger connection with Great Britain than with any other jurisdiction. The decision is also consistent with the recent Court of Appeal's judgment in Clyde & Co LLP and another v Bates van Winkelhof (CA), in which the Court of Appeal held that a comparison is only necessary where the individual worker works wholly outside of Great Britain, otherwise the 'sufficiently strong' test applies.
The Ravat principles have already been extended beyond the Employment Rights Act 1996, (to the Fixed Term Employees Regulations 2002 in Ashbourne v Department of Education and Skills and others  EAT, applying the House of Lord's judgment in Lawson -v- Serco Ltd, from which the Ravat principles originated). It is interesting that the High Court has now extended these principles to Schedule A1 of TULR(C)A.