Although the Employment Rights Act 1996 (ERA) is silent on its territorial scope, case law has established that some employees who work outside Great Britain may still be able to bring claims in an Employment Tribunal.
In Serco Limited v Lawson 2006, the House of Lords identified four categories of employee who qualified for unfair dismissal protection: (i) standard employees; (ii) peripatetic employees; (iii) expatriate employees; and (iv) other employees who do not fit into the three main categories but who have an “equally strong connection” with Great Britain.
In Ravat v Halliburton Manufacturing and Services Ltd 2012 the Supreme Court indicated that whether someone fell within the categories listed above could be established by asking the following question: “Where an employee’s place of work is not Great Britain, is the connection with Great Britain sufficiently strong to enable it to be said that Parliament would have regarded it as appropriate for an Employment Tribunal to deal with the claim?”
In this case the Claimant, Mrs Lodge, an Australian citizen, was employed as Head of Finance for a British not-for-proft company. Her contract was governed by the law of England and Wales.
Initially, the Claimant worked at the company’s offices at Oxford Street in London, although she asked for a virtual private network (VPN) to be installed on her laptop so that she could work occasionally from home in London.
A few months after her appointment, she moved to Australia to be nearer her mother, who was ill. Using VPN, she kept working remotely from Australia for over ten years. In June 2013, the Claimant resigned and brought claims for constructive unfair dismissal and whistleblowing claims in the London Employment Tribunal.
Employment Tribunal decision
The Tribunal ruled that the Claimant was not entitled to rely on protection under the ERA.
The Tribunal concluded that the Claimant was not a true expatriate employee as defined in Lawson because she had not been “posted” abroad to work by her employer. Instead, she had left London of her own accord to go and live in Australia.
Although the Tribunal accepted that the Claimant’s employment was connected to an extent with Great Britain (and, therefore, went some way to meeting the test in Ravat), it was not satisfied that Parliament would have intended that an employee like the Claimant, who was an Australian citizen, had relocated with her family to Australia and was subject to the Australian tax and pension regimes would be able to bring employment claims in an English Employment Tribunal.
Although the EAT accepted the decision that the Claimant did not fit squarely within the expatriate employee category in Lawson, it found that she fell within a sub-category of expatriate employee instead. Although the Claimant had not been posted to work abroad by her employer, her employer had allowed her to work remotely from abroad and all the work that she did in Australia was for the benefit of her employer’s London operation. This did not make her circumstances substantially different from an employee who had been posted to work abroad.
To illustrate this point, the EAT gave an example of an expatriate employee entitled to pursue a claim of unfair dismissal in the Tribunal. In Financial Times Ltd v Bishop 2003 (EAT), a sales executive who originally working for the Financial Times in London had been posted to San Francisco to sell advertising space for 3 years. In that case, the EAT had ruled that Mr Bishop should receive protection from unfair dismissal because he was still selling advertising space in San Francisco as part of his employer’s business in London (rather than working for a business in the USA).
Overall, the EAT considered it to be important that the Claimant had left for Australia with the consent of her employer and that she was undertaking work exclusively for the benefit of their London office. Therefore, although she was a “virtual employee” in Australia rather than a “physical employee” in London, this did not mean that she fell outside the protection of the ERA. The EAT also noted that the Claimant had raised a grievance after she moved to Australia (which had been dealt with in London), and that there was no dispute between the parties that she had no cause of action in Australia for her complaints.
In the modern workplace, remote working is becoming much more common and staff are increasingly working from home or via virtual offices from abroad. This case illustrates that it is important to be aware that staff whose home base moves to a foreign country may still retain UK employment rights. As it will be in the interests of both parties to clarify what rights exist under the employment contract, and how they can be enforced, this is something to consider at the point that employees either start employment or when they are granted permission to start working remotely.