October 3, 2013

Territorial jurisdiction – extended

The Respondent was a UK subsidiary of an American company and the Claimant started work for the Respondent in 2006 with a contract of employment giving a London work address and being governed by English law. Three years later he moved to Dubai when the company decided to open a Dubai office. He transferred his British and European clients to another employee of the Respondent and focused exclusively on clients in the Middle East, Asia and Africa. He was remunerated in US dollars. The Dubai office was a designated branch of the Respondent and sales made in Dubai were handled in London with regard to invoicing and remittance. Eventually for business reasons the Dubai office was closed and the Claimant was dismissed.

He brought a claim for unfair dismissal and various other complaints. In overturning the Employment Judge’s decision to refuse jurisdiction the EAT, with the benefit of later case law which widened the scope of jurisdiction, held that a comparative enquiry must be undertaken to determine whether the employment relationship had a stronger connection with Britain and British employment law than the foreign country in which the employee worked. In giving its judgement, the EAT did stress that the fundamental principles in Lawson v Serco remain unchanged and that, in principle, it is very unlikely for someone living and working abroad to be able to take the benefit of the unfair dismissal protection. However the exercise of establishing whether there is a stronger connection with Great Britain and UK employment law than there is with the country in which they work will still be undertaken and it commented that this was no small hurdle to overcome.

This legal update is provided for general information purposes only and should not be applied to specific circumstances without prior consultation with us.

For further details on any of the issues covered in this update please contact Gemma Ospedale, Partner in Employment on 020 7583 2222.

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