If you work abroad, you may now be able to claim unfair dismissal in the UK if you’re dismissed. Here we also look at whether employers can choose which country’s laws apply to its employment contracts.
[Updated for 2015]
With unemployment rising in the UK, British workers may have to look abroad for employment, and of course many multinational companies have employees constantly moving across international borders. However, if you believe you were unfairly dismissed if you lost your job while you were working abroad, can you claim unfair dismissal under UK law?
Existing UK legislation is silent as to exactly which employees are protected against unfair dismissal if they work abroad, leaving previous UK employment law cases (at an Employment Tribunal) have tried to clarify.
Until February 2012 Tribunal cases had clarified that only the following types of employees would qualify for protection against unfair dismissal:
- Employees who ordinarily work in Great Britain at the time of their dismissal
- “Peripatetic employees” whose base is in Great Britain (e.g. flight crew who work around the world but always return to a UK airport)
- “Expatriate employees” who have a strong link to Great Britain (e.g. those working in British military bases abroad or the foreign correspondent of a British newspaper who is based abroad)
- Employees who don’t fit any of the above categories but who have an “equally strong connection” with Great Britain may be covered (this ‘equally strong connection’ wasn’t defined)
- Teachers who were employed by the British government to work in European schools abroad were protected because they’d sufficiently close connections with Great Britain.
However, a case in February 2012 (Ravat v Halliburton) has led to the Supreme Court giving helpful insights into how employment tribunals should approach the question of the territorial extent of UK unfair dismissal protection.
The quick facts of the case: Mr Ravat was a British citizen originally employed by a subsidiary of a multinational company in London, he was later posted to Algeria and then to Libya. From 2003 until 2006, when he was made redundant, he job-shared working on a “rotational” or “commuter” basis which involved 28 days in Libya followed by 28 days on leave in Great Britain, where he lived. Unlike other employees in the business, he wasn’t accorded expatriate status as he worked on a rotational basis and received expenses to cover his commute. The duties he carried out in Libya were for the benefit of a German subsidiary.
The Supreme Court took the following factors into account to establish that Mr Ravat had a substantial connection with Great Britain in comparison to any other jurisdiction and therefore was entitled to claim unfair dismissal in the UK:
- His home address was in Great Britain
- He received his salary in sterling after deductions for UK tax and National Insurance contributions
- He was retained under the normal UK pay and pension structure which applied to other UK based employees
- His employment contract was stated to be subject to UK law and he was repeatedly reassured by his employer that his employment relationship with them was governed by UK law
- His employment and its termination were handled by the HR team based in Aberdeen.
Although Mr Ravat worked outside of the UK for a German company the Court felt that this was not enough to deflect attention away from the reality of the situation that he was connected to the UK. The Supreme Court stated that the correct question for tribunals to ask is:
“Whether the connection with Great Britain is sufficiently strong.” It confirmed that it agreed that it wasn’t necessary for Mr Ravat to fit neatly into the first three categories set out above, they were examples only – the main principles would be that there is a “substantial connection” to Great Britain: an individual who can’t prove this won’t be protected against unfair dismissal in the UK Courts. Whether someone has a substantial connection to Great Britain will be a question of fact dependant upon the circumstances of each case and is a question which only a Tribunal could decide.
An additional case in November 2013 confirmed that the Courts will look to see whether the Employer itself was a British Company (or the Employee’s job had substantial connections with the UK).
In the 2014 case of Fuller v United Healthcare Services Inc the EAT upheld a Tribunal’s decision that a US citizen employed by a US company – who was required to spend around 49% of his time in the UK – fell outside of the scope to be able to claim unfair dismissal or discrimination in a UK Tribunal. The factors that were taken into account were that he maintained a home in the US (the Company leased a flat for him in London); he hadn’t given up his base in the US and moved to the UK; he was paid in US dollars; his previous US benefits package continued; he was informed of the decision of his impending dismissal while he was in the US. Basically, as a US citizen employed by a US company, Mr Fuller couldn’t engage rights under European law.
In January 2015, the Employment Appeals Tribunal (in Lodge v Dignity & Choice in Dying) ruled that an Australian citizen, who had started working for her employer in the UK in 2008 but later returned to Australia (with the same contractual arrangements) could claim unfair dismissal in the UK. Although she was treated as an Australian resident for tax and pension purposes her contract continued to be governed by English law. The EAT found she fell with the ‘expatriate worker’ category as all her work was wholly and exclusively for the benefit of her employer (who was only based in the UK), she returned to London to work for two weeks each year and a grievance she had raised had been heard and dealt with in London.
Which country’s laws applies to an employment contract?
Under EU law, parties to a contract can choose which country’s law their contract is subject to; however there are mandatory rules of the country in which the employee is working that apply automatically and cannot be ignored. So, if a contract contains terms that are contrary to the law of the country in which the employee is based, the local laws prevail.
If an employment contact doesn’t set out expressly the choice of law, the applicable law will usually be that of the country where the employee usually works; or if there’s no habitual place of work, the country where the employer’s business is located; or if there are circumstances which show that the contract is more closely connected with another country, the law of that country. Other factors that need to be taken into account are the currency of payment, where taxes are paid, and where the employee lives.
The ECJ has said that where there’s a conflict of one country’s laws against another, the legal system more favourable to the employee should apply.
To read more about unfair dismissals see our article How your Employment can come to an end.
If you are an Employer and need ongoing professional help with any staff/freelance issues then talk to Lesley at The HR Kiosk– a Human Resources Consultancy for small businesses – you can retain us for as much time as you need.
Please note that the advice given on this website and by our Advisors is guidance only and cannot be taken as an authoritative or current interpretation of the law. It can also not be seen as specific advice for individual cases. Please also note that there are differences in legislation in Northern Ireland.