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Connection of employment with Great Britain

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In summary

The Equality Act does not define what connection with Great Britain a worker needs in order to claim under the Act. The courts will need to determine this.

An exception is workers on ships and hovercraft (below). Here regulations under the Equality Act define what connection is required.

Usually of course the position is clear. The person is employed in Great Britain at a base of the employer there. The links are predominantly with Great Britain, so the employment comes within the Equality Act. Great Britain means England, Scotland and Wales, but not Northern Ireland.

Where the position is not so obvious, court decisions over the past few years have been clarifying the territorial reach of the Equality Act. The principles seem to be as follows:

  • Under British domestic law, the test is whether the connection with Great Britain is sufficiently strong to enable it to be said that Parliament would have regarded it as appropriate for the British tribunal to deal with the claim. The test is easier to fulfil if the work is partly done in the UK, but is sometimes met even if all the work is done wholly abroad. See below The basic test (‘unfair dismissal’ test).
  • Where British law is implementing European Union (EU law), as the Equality Act often does, courts sometimes extend the territorial scope of the British law further than the basic test above would allow. This is called the Bleuse principle, and is to give effective judicial protection to EU rights. See below Wider scope through European Union (EU) law;
  • There are overriding issues of (a) whether the UK courts/tribunals have jurisdiction and (b) which country’s law applies. As regards (b) however, provided the UK tribunal itself has jurisdiction, it may be possible to apply the Equality Act as a ‘mandatory’ provision of British law. See Complications of jurisdiction and choice of law.

The position may eventually need to be clarified by the European Court of Justice, as suggested in Duncombe (below).

The basic test (‘unfair dismissal’ test)

Note: As discussed below, the territorial scope of the Equality Act can be wider than this test.

The basic test for unfair dismissal is also applied for Equality Act 2010. The question is whether the connection with Great Britain is sufficiently strong to enable it to be said that Parliament would have regarded it as appropriate for the tribunal to deal with the claim (Ravat v Halliburton (link to bailii.org), an unfair dismissal case). The Court of Appeal applied this test to the Equality Act in:

Clyde & Co v Bates van Winkelhof (below), Court of Appeal, 2012
A solicitor worked partly in Britain but mostly in Tanzania. She claimed sex and pregnancy discrimination under Equality Act 2010. On the facts, there was held to be sufficient connection with Great Britain. The Equality Act applied.

British employment law will normally apply if the employee is working in Great Britain at the time of dismissal. (An exception was the case of Fuller v United Healthcare, where an American expat working about half his time in the UK was found on the facts not to be covered by the Equality Act.)

Where the worker moves around, such as an airline pilot, UK law should apply if s/he is based in the UK.

Even where the work is done wholly abroad, there will be exceptional cases where the connection with Great Britain is stronger than with the country of work, so that British employment law applies, for example:

  • a foreign correspondent of a British newpaper
  • some ‘commuter’ workers living in Britain.

More on the basic test (below).

Wider scope through European Union (EU) law

For employment legislation implementing EU law, the courts have been willing to extend the territorial scope of British law to give an effective remedy to EU rights, even though under the basic test above the British law would not apply. This is known as the Bleuse principle. This principle should also apply to the Equality Act, so far as it implements EU law (and especially where the EU law has direct effect).

Bleuse v MBT Transport (below), 2007, Employment Appeal Tribunal (EAT).
The claimant, a lorry driver, worked mainly in Austria and Germany (never in the UK), and lived in Germany. He claimed holiday pay under the Working Time Regulations, which implemented directly effective European law. The British employment tribunal had jurisdiction because the employer company was registered in the UK. Apart from EU law, said the EAT, the basic (unfair dismissal) test above would apply, so the Regulations would not apply. However, the scope of the Regulations must be extended so as to apply here, in order to give effect to the directly effective rights under EU law.

Ministry of Defence v Wallis (below) 2011, Court of Appeal
The claimant was employed by the Ministry Defence in a school abroad. She was held to meet the basic test, and so could claim for ‘unfair dismissal’. However, the Sex Discrimination Act 1975 contained express wording on territorial scope, which did not allow her to claim for sex discrimination. The Court of Appeal held that nevertheless she could claim under the Sex Discrimination Act, to comply with the European Union principle of ‘effective judicial protection’.

Both those cases involved countries within the European Union. There is authority that the Bleuse principle does not apply where the work is outside the European Union (Hasan v Shell below), and there may be some circumstances where it does not apply even though a large part of the work is done in the UK (Fuller case below). However, to resolve the position, the territorial scope of the EU directive itself may well need to be decided, ultimately by the EU court.

Fuller v United Healthcare Services (see below), EAT, 2014
The claimant was an American employed by an American company, but working about half the time in London as managing director of a UK subsidiary, On the facts, it was held that EU law was not engaged here. The employment relationship was an American one.

Hasan v Shell (link to gov.uk), EAT 2014
A British person worked on a Singapore-flagged ship outside Great Britain. The ships and aircraft regulations (below Equality Act: work on ships and hovercraft) did not bring him within the Equality Act. The EAT held that the Bleuse principle did not apply to bring him within the Act, because the work was not within the European Union.

In Clyde & Co v Bates van Winkelhof (below), the Court of Appeal considered an Equality Act claim by a person working mostly in Tanzania. The court held she passed the basic test, as there was a sufficiently strong connection with Great Britain. Accordingly, the court did not need to consider whether the Bleuse v MBT Transport principle applied to extend the scope of the Act further.

There may be an argument that the principle in Bleuse v MBT Transport (as the principle is often known) does not apply if and so far as the Equality Act goes beyond what is required by the Framework Employment Directive, so the claimant would not have a claim under EU law. The courts will need to consider these issues if and when they arise.

Complications of jurisdiction and choice of law

The tests above may be overriden by rules on

  • which country’s courts and tribunals have power to decide a particular case (ie. which courts have ‘jurisdiction’), and
  • which country’s laws the court must apply in deciding the case (‘choice of law’). This can be different from which country’s courts have jurisdiction – eg a UK court or tribunal may need to apply German law.

There are some detailed rules on this, which are beyond the scope of this website. An example of a discrimination case which discussed these issues is:

Simpson v Intralinks (below), Employment Appeal Tribunal (EAT), 2012
On the facts, the British employment tribunal was held to have jurisdiction, and under the Rome Convention the Sex Discrimination Act 1975 and Equal Pay Act 1970 could be applied, since they were mandatory rules. However, the British employment tribunal had to apply German law in deciding whether there was a contract of employment.

Provided the UK tribunal itself has jurisdiction, it may be that the Equality Act could be applied under the choice of law rules as a ‘mandatory’ provision.

But that would only permit the Equality Act to be applied – the situation would need to fall within the scope of the Equality Act as discussed in previous headings. However, even if the Equality Act would not be applicable under the normal choice of law rules, it may be arguable that where the EU rules discussed above in Wider scope through European Union (EU) law? (requirement to give effective judicial protection to EU rights) bring a situation within the scope of the Equality Act, those same EU rules require the EU choice of law rules to be interpreted so as to allow the Equality Act to be applied.

Article: Is Ravat “old hat”? (pdf, link to cloisters.com), July 2012.

Links:

Some cases

Fuller v United Healthcare Services (link to employmentcases.co.uk), EAT, 2014
The claimant was an American employed by an American company. He accepted an “international rotation assignment” under which he became managing director of a UK subsidiary, focussing on business in the UK, Europe and the Middle East. He was in London for about half the time, and when in London lived in rented accommodation paid for by the employer. He continued to be paid in US dollars. He left his furniture and home effects in his Texas home where he and his partner lived. Then, due to budget issues, he was told his expatriate assignment was being terminated. Following a short period in which he unsuccesfully sought another role within the company, he was dismissed.

The Employment Tribunal held that it did not have jurisdiction. It noted that ‘the claimant was in the obverse situation from claimants in the leading cases in that he was not “working abroad” and seeking to invoke UK employment legislation; rather he was seeking to invoke UK legislation because he was present in the UK, on business, for much of his time.’ Ordinarily working in the UK at the time of his dismissal was the strongest possible indication that Parliament would intend the claimant to fall within UK employment law. However it was not absolutely determinative. In this case: “Overwhelmingly the strongest connection, both in the deliberate intention of both parties to the employment relationship, as contractually expressed, and in the factual outworkings of that contract was to the United States.”

The Employment Appeal Tribunal (EAT) upheld the decision. The tribunal had decided the claimant had not given up his base in the USA despite carrying out some work in the UK and in other countries. The tribunal was entitled to come to that view. It could not be said in light of those facts that the claimant’s employment was closely related to Great Britain and British employment law. It was necessary, said the EAT, to recognise that the connection requires to be with both Great Britain and British employment law.

As regards whether the Equality Act applied, the test was the same. The EAT held that EU law was not engaged here. The employment relationship was an American relationship.

Clyde & Co v Bates van Winkelhof (link to bailii.org), 2012, Court of Appeal
The claimant was an English qualified solicitor, but had moved to work in Tanzania. When in Tanzania, she was recruited by a law firm, Clyde & Co. This was a limited partnership, and she became a member of it (similar to a ‘partner’ in a traditional partnership).She worked principally in Tanzania, but sometimes in the UK. She was subsequently expelled as a member of the partnership, and alleged sex discrimination and pregnancy discrimination under Equality Act 2010. (She also made a claim under rules protecting whistle blowers, but the Court of Appeal held those rules did not apply to her as a member of a limited partnership).

In deciding whether the Equality Act 2010 applied, the employment tribunal applied the test developed for unfair dismissal (the ‘basic test‘ above). It considered whether there were “strong connections with Great Britain such that the Tribunal has jurisdiction to hear the [complaints]”, and decided that there were. The Equality Act claims could proceed.

The Court of Appeal upheld the employment tribunal’s decision. In effect the tribunal had asked the right question, as set out in the later Supreme Court decision of Ravat v Halliburton: namely whether the connection was “sufficiently strong to enable it to be said that Parliament would have regarded it as appropriate for the tribunal to deal with the claim.” The Court of Appeal considered that since she worked partly in Great Britain, the tribunal did not have to undertake a comparison to see whether the employment relationship had a stronger connection with Great Britain than with Tanzania – but if the Court of Appeal was wrong on that, the tribunal would necessarily have come to the same conclusion had it framed the question correctly.

If the unfair dismissal test had not been satisfied, the claimant argued (in the alternative) that the scope of the Equality Act should be extended under EU law, as in Bleuse v MBT Transport and Wallis v Ministry of Defence below. However, the Court of Appeal did not have to consider this point.

In 2013, the Supreme Court (pdf, link to supremecourt.gov.uk) refused permission to appeal on the issue of connection with Great Britain “because the application does not raise an arguable point of law, the question being one of fact for the Tribunal.” (However, the case did go to the Supreme Court on whether as a limited partner she was a ‘worker’ so as to have the protection of the whistleblowing rules. In 2014 the court held (pdf) that she was indeed a ‘worker’ so the whistleblowing rules applied.)

Simpson v Intralinks (link to bailii.org), Employment Appeal Tribunal (EAT), 2012
This case concerned claims under the Sex Discrimination Act 1975 and Equal Pay Act 1970. The claimant was based in Germany and worked a lot in Germany and elsewhere on the Continent, but she also partly worked in London. The employer company had its registered office in London. The employment contract said that the agreement and any disputes were governed by Germany law, and that Frankfurt courts had exclusive jurisdiction. According to the wording of the Sex Discrimination Act, the Act applied in the present case because the work was partly in the UK. However, was that altered by the fact that the contract said it was governed by German law, and did the UK tribunal have jurisdiction at all?

The EAT held that under the terms of the ‘Brussels 1 Regulation’, the UK tribunal had jurisdiction despite the contract saying that any disputes must be decided in Frankfurt. As regards what law must be applied by the UK tribunal, the EAT considered that this was be determined according to the ‘Rome Convention’, because proof of a contract was a necessary step in the claim. Under Article 6 of that Convention, German law was applicable: the work was habitually carried out in Germany, and the tribunal had been entitled to find that the contract was not more closely connected with the UK. However, Article 7 of the Rome Convention allowed the UK tribunal to apply mandatory rules of UK law. Those included the UK sex discrimination and equal pay legislation, because they could not be derogated from by agreement.

Accordingly, the UK employment tribunal was entitled to decide whether there had been a breach of the Sex Discrimination Act and Equality Pay Act, but would need to apply German law in deciding whether there was a contract of employment (and anything else not governed by mandatory UK law). The EAT held that an employment tribunal was entitled to determine issues of German law – that law would be seen as a question of fact, on which expert evidence could be given.

Note: The Rome Convention has now been replaced for new contracts. See generally above Complications of jurisdiction and choice of law.

Ministry of Defence v Wallis (link to employmentcasesupdate.co.uk) 2011, Court of Appeal
The Court of Appeal confirmed a decision that the employment tribunal had jurisdiction to hear unfair dismissal claims made by employees working full time abroad. They were employed by the Ministry of Defence in the British Section of International Schools, and secured their employment purely because they were spouses of members of the Armed Forces who were posted abroad. The employment was held to have “such clear, firm, sound connections with Britain or England that it is appropriate that each claimant should have the protection of English unfair dismissal law”.

The Court of Appeal also considered a claim under the Sex Discrimination Act 1975. The Court of Appeal upheld a decision that this Act was applicable in the present situation, despite the fact that express wording on territorial scope in the Act did not extend to the situation. The court said that the European Union principle of ‘effective judicial protection’ applied. To make the Sex Discrimination Act compatible with EU law, words should be read into the Act to cover the case of a person employed to work wholly at an establishment outside Great Britain, but whose employment has a sufficient connection with Great Britain to entitle her to the protection of employment law in the courts and tribunals in Great Britain. Even if the words could not be read into the Act, the EU law had direct effect as against the Government. (para 36-42).

Issues of jurisdiction of the tribunal, applicable law and EU law were considered in more detail by Elias LJ, from para 47 onwards. He pointed out that this was a case in which the British courts had jurisdiction, and in which the law applicable to the relationship under the Rome Conventions was English law. Elias LJ considered that the situation became more complex if – unlike in this case – either the domestic law of non-EU countries may be involved (in which case it may be necessary to determine the geographic reach of the directive itself), or if reliance is placed on EU rights which do not have direct effect.

Duncombe and others v Secretary of State for Children, Schools and Families (link to bailii.org), 2011
The Supreme Court considered regulations on fixed term contacts which implement an EU directive. A teacher employed by the British Government worked in Germany under a contact governed by English law. The Supreme Court did not in fact have to decide on the territorial reach of the regulations. However, the Supreme Court was inclined to agree that the regulations would apply to the teacher.

“But the intended scope of the protection given by the Directive, and others like it, is a question of European Union law to which a uniform answer should be given throughout the Union…. Had it been necessary to answer the question, therefore, it would probably be necessary to refer it to the European Court of Justice.” (para 33)

A concern of the Supreme Court was that EU law is designed to offer workers the same or similar protection wherever they are working within the EU: workers must not lose rights accrued in one Member State because they choose to work in another Member State, and should not have lesser rights than other workers in the country where they go to work.

The Supreme Court also raised the question of whether a person employed to work in China, for example, would be able to claim the benefit of all the domestic law which emanates from the European Union, but did not attempt to answer it.

Bleuse v MBT Transport (link to bailii.org), 2007, Employment Appeal Tribunal (EAT).
The claimant, a lorry driver, worked mainly in Austria and Germany (never in the UK), and lived in Germany. The individual through whom he was employed lived in Austria. However, the contract of employment was with a company registered in England, owned by that individual. The contract identified English law as the proper law and sought to confer exclusive jurisdiction on the English courts.

The EAT held that unfair dismissal could not be claimed. There was not sufficient link with Great Britain under the basic test (as discussed above) for unfair dismissal. That the contract was governed by English law did not alter this, because the right to claim unfair dismissal was a statutory right, not a contractual one.

However, the EAT held that (assuming the claim had been made in time) the UK tribunal could consider contractual claims, and rights to holiday pay under the Working Time Regulations. Those Regulations implemented directly effective EU law. The UK tribunal had jurisdiction because the employer company was registered in the UK (bearing in mind the Brussels Regulation). English law applied to the contract (bearing in mind the Rome Convention). Without the EU rights, the basic ‘unfair dismissal’ test for the required link with Great Britain would be the relevant test for the Working Time Regulations, and since that test was not met the Regulations would not have applied here. However, the scope of the Regulations must be extended to give effect to the directly effective rights under EU law. Otherwise the principle of effectiveness would not be satisfied: there would be no effective remedy for a breach of the EU right. The Working Time Regulations could (and therefore should) be interpreted to be compatible with EU law.

More on the basic test (‘unfair dismissal’ test)

The most important recent case on this is Ravat v Halliburton (link to bailii.org), 2012. The Supreme Court said that whether a dismissal fell within British unfair dismissal law depended on –

“whether the connection between the circumstances of the employment and Great Britain and with British employment law was sufficiently strong to enable it to be said that it would be appropriate for the employee to have a claim for unfair dismissal in Great Britain.” (para 29)

At para 27 the Supreme Court said the starting point was that –

“the employment relationship must have a stronger connection with Great Britain than with the foreign country where the employee works. The general rule is that the place of employment is decisive. But it is not an absolute rule…”

There has subsequently been some confusion about what the Supreme Court meant – does the connection with Britain need to be ‘stronger’ than with elsewhere, or does the connection just need to be ‘sufficiently strong’. In Clyde & Co v Bates van Winkelhof (above) the Court of Appeal considered that the ‘stronger’ connection test did not apply if (as in that case) part of the work was done in Great Britain – there the connection with Britain just had to be ‘sufficiently strong’. However, that has yet to clarified by the Supreme Court. The issue of ‘stonger’ versus ‘sufficiently strong’ was also discussed by the High Court at para 27-29 of Netjets v CAC (link to bailii.org), October 2012.

Combining the Ravat case with the 2004 Supreme Court decision in Lawson v Serco Ltd (link to www.bailii.org) and Duncombe (above), very broadly:

  • normally it will be a matter of whether the employee is working in Great Britain – though the Fuller case above is an example of an American expat working about half the time in London but held not to be within the Equality Act;
  • for peripatetic employees such as airline pilots, working in several territories, one looks at where their base is;
  • there will be relatively exceptional cases where the work is abroad but there is nevertheless a strong enough connection with Great Britain to bring it within unfair dismissal rules. Examples can include:
    • where the employment is for the purpose of a business carried on in Great Britain, eg. a foreign correspondent on the staff of a British newspaper (Lawson);
    • where the employment is in a British enclave or perhaps international enclave: such as a British RAF base on Ascension Island or Ministry of Defence establishments in Germany (Lawson); or teachers employed by the British government in an international enclave (Duncombe);
    • the ‘commuter’ worker in the Ravat case who lived in the Great Britain but worked in Libya on a rotational basis – 28 days in Libya and 28 days back home – with other factors linking the employment with Great Britain.
  • Clyde & Co v Bates van Winkelhof (above) is an example of a case where the person worked partly in Britain but mostly in Tanzania. On the facts there was held to be sufficient connection with Great Britain.

Link: Supreme Court gives international commuter right to claim (link to workplace.net), 12/3/12.

Equality Act: work on ships and hovercraft

For seafarers on ships and hovercraft, there are special Equality Act regulations on what territorial connection with Great Britain is required: The Equality Act 2010 (Work on Ships and Hovercraft) Regulations 2011 (link to legislation.gov.uk). There is some background on the regulations (mainly about equal pay) on www.dft.gov.uk.

Definitions of ‘seafarer’, ‘ship’, and ‘hovercraft’ are in s.81 EqA. A ‘seafarer’ is a person employed or engaged in any capacity on board a ship or hovercraft.

A case which considered these regulations is Hasan v Shell, EAT 2014, summarised above.