Territorial jurisdiction

01 June 2017

Is the assessment of whether an employee has a strong connection to the UK (to give an employment tribunal territorial jurisdiction to consider a claim) objective rather than subjective?

Yes, held the Employment Appeal Tribunal (EAT) in Green v SIG Trading Ltd.

The Respondent (a limited company registered in the UK) employed the Claimant as the managing director of its operations in Saudi Arabia. He lived in Lebanon, commuting for two to four days at a time. He was paid in UK pound sterling, and registered with HMRC, although he was tax exempt. His contract of employment stated that it would be governed by English law and referred to some UK employment legislation. The contract also contained a mobility clause that might require him to work in the UK, and restrictive covenants that applied to the UK and Ireland. The Claimant was dismissed by reason of redundancy and he brought claims before the employment tribunal.

The employment tribunal held that Mr Green was an expatriate employee, with stronger connections to Saudi Arabia than the UK, and they did not have territorial jurisdiction to consider his claims. He appealed.

The EAT held the employment tribunal had applied the wrong test. The focus should not have been on his role or duties, but who he worked for; a UK business. The employment tribunal had failed to carry out a proper assessment of the relevant factors. The EAT stated the proper test was an objective assessment of whether the employee's connection was stronger to the UK or to Saudi Arabia, whilst also looking at the wider context. The employment tribunal had given too much weight to the Respondent's subjective explanation for the jurisdiction clause.

The parties could agree that the contract was governed by English law (and there was no dispute that a breach of contract claim could proceed), but it was a matter for the employment tribunal if the statutory employment protections applied. As the employment tribunal had disregarded a relevant factor, the appeal was upheld.

With thanks to Daniel Barnett’s employment law bulletin for providing this update.