June 30, 2017

Expatriate Employees and the Territorial Jurisdiction of U.K. Employment Tribunals

In Green v SIG Trading Ltd [2017] UKEAT 0282_16_2405 the Employment Appeal Tribunal (EAT) examined the test for determining whether a U.K. Employment Tribunal had jurisdiction to hear statutory U.K. employment claims brought by an expatriate employee.

Mr Green was a British citizen employed by a U.K. company, SIG Trading Limited (SIG) as Managing Director of its operations in Saudi Arabia. He lived in Lebanon, commuting to Saudi Arabia four days at a time and only occasionally coming to the U.K. for training and meetings. He reported to a manager in the U.K., was paid in pounds sterling and was registered with HMRC (although exempt from tax). His employment contract was one of SIG’s standard U.K. contracts, the governing law of which was stated to be English law. Mr Green was made redundant, following which he brought a claim for unfair dismissal in the U.K. Employment Tribunal.

At first instance, the Employment Tribunal (ET) found that he had a closer connection with Saudi Arabia and that it therefore did not have jurisdiction to hear the claim. On appeal, the EAT disagreed. It held that the proper test required an objective assessment of whether the employee’s connection was closer to the U.K. or to Saudi Arabia, taking into account the wider context. The ET had failed to pay due consideration to the fact that the parties had agreed that the governing law of the employment contract should be English law, and had given undue weight to SIG’s subjective explanation for the inclusion of the governing law clause (namely, that it used the standard U.K. contract for “convenience”). The case was remitted to the ET for reconsideration.

In light of this decision, U.K. employers should be wary of using their standard U.K. contracts for overseas employees.

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