The Employment Act does not specify territorial scope in regards to the rights of an employee. In a the Lawson vs Serco case, the court of appeal and the House of Lords relied on case law alone to come to their verdict.
The employer, Serco Ltd is a UK company which operates world-wide providing services to the public and private sector. The company engaged Mr Lawson as a security supervisor on Ascension Island in the South Atlantic. After six months he resigned, claiming that he had been constructively dismissed.
What the law says:
The UK rarely purports to legislate for the whole world. Some international crimes, like torture, are an exception. The contractual issues of employment are nevertheless complex, and a contract can in many cases include several jurisdictions. The permissibility of the law, in this discussion is founded on the category of the worker. For the purposes of this case, the following classifications are useful –
a) Peripatetic employees
b) Expatriate employees
The Act does not always remain silent on the issue of territory. In section 22 of the Industrial Relations Act 1971, it was accompanied with the provision that said unfair dismissal did not apply “to any employment where under his contract of employment the employee ordinarily works outside Great Britain”. This provisional was originally put in place to limit the scope of additional rights.
The Posting of Workers directive says that employees who are posted by their employers to perform temporary work in other Member States should enjoy the protection of ‘a nucleus of mandatory rules for minimum protection’. The mandatory nucleus is specified to include statutory rights such as maximum work periods, minimum paid holidays, minimum rates of pay and protective rights for women who are pregnant. The directive, again does not include protection from the right not be unfairly dismissed.
Details of the joint appeal:
Lawson v Serco Ltd involved three joined appeals. The second appeal was Croft vs. Veta Ltd. The claimant worked as a airline pilot. The argument was that the pilot, who spent the majority of his working time in the air, could not be considered to be employed in Great Britain. The result from the Court of Appeal was that Croft was deemed eligible to make a claim, based on the fact that Croft was a ‘peripatetic employee’ . They deemed that his contract should be determined by it’s operation, rather than the terms. I.e. his contract necessitated that in order for him to carry out the duties of his job, it required Croft to be without territory.
Botham was the third claimant who was recruited by a British-based employer from the UK labour pool to carry out services abroad. In this case the question arose as to whether the employment relationship was “forged and ultimately roots” in Great Britain.
In the case of both Lawson and Botham, they were expatriate employees working abroad in circumstances where their work had a strong connection with Great Britain.
Question of base:
In all three of these case the judge considered the principle of where the employee is based. The base was defined as the place where an employee ordinarily work under their contract of their employment. The base may also be determined by where their home is and where, for example, the employee is subject to pay National Insurance. Lord Denning MR stated in the airline pilot case Todd v British Midland Airways,
‘A man’s base is the place where he should be regarded as ordinarily working, even though he may spend, days, weeks or months working overseas’
Denning’s opinion was later rejected as a obiter dictum in the Court of Appeal. Conversely, when Lord Hoffman’s addressed the House of Lords to the Lawson case, he held that Lord Denning’s comment was ‘the most helpful guidance’ in rooting the argument of an individual’s ‘base’.
A Peripatetic worker traditionally is employed in two or more establishments and travels from one to another. The definition of how long one works in each establishment remains undefined. Hoffmann gives the example of a foreign correspondent who is employed by a British newspaper, and is posted to Europe to conduct business for months, maybe years, but is still considered a permanent employee of a UK company.
Hoffman highlights the exception in the Act, which makes specific provisions for one class of peripatetic worker, namely mariners. He stated ‘I do not think that one can draw any inferences about what Parliament must have intended in relation to other peripatetic workers such as airline pilots, international management consultants, salesmen and so on’.
Hoffmann concluded that Mr Lawson, Botham and Crofts were probably all entitled to make their claims in the UK. He believed that their cases were ‘a matter of construction of the substantive rights conferred by the Act’, and it would be incorrect to formulate an ancillary rule of territorial scope. He concludes that section 94(1) should apply to ‘an expatriate employee: the employee posted abroad to work for a business conducted in Britain and the employee working in a political or social British enclave abroad.
Lord Hoffmann dismissed the appeal in Crofts v Veta Ltd and allowed the appeals in Lawson v Serco Ltd and Botham v Ministry of Defence.
This case established the rules of how UK employment law should be applied abroad, and is useful in light of the rapid increase of people working remotely.