Testing Territorial Jurisdiction

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Testing Territorial Jurisdiction

Testing Territorial Jurisdiction

The Employment Appeal Tribunal has held that the test for assessing whether an employee’s employment is subject to UK jurisdiction is an objective test. This test looks at whether the employee’s connection to the UK is stronger than their connection to the country in question.

In the case of Green v SIG Trading Ltd, the Respondent was a private limited company incorporated in the UK. The Respondent employed the Claimant as a managing director of its newly established business operations in Saudi Arabia.

The Claimant was employed under one of the Respondent’s standard UK contracts and the contract stated that it was governed by English law. When the Claimant was dismissed, by reason of redundancy, he brought a claim in the Employment Tribunal. The Employment Tribunal held that it did not have the territorial jurisdiction to consider the claim, stating that although the Claimant was an ex-pat, he had stronger connections to Saudi Arabia than he did to the UK. The Claimant appealed this decision.

The Claimant did not have a home in the UK and had lived in the Middle East for some years. He lived in Lebanon and commuted to work in Saudi Arabia between two to four days per week. As the operations in Saudi Arabia were newly established, the Claimant reported to a manager in the UK. Other staff, including support staff and support services, were also located in the UK. The Claimant’s contract even specifically referenced some UK employment legislation provisions. Furthermore, the contract contained a mobility clause which could require the Claimant to work in the UK and restrictive covenants which were applicable to the UK and Ireland.

When the case was heard at the Employment Appeal Tribunal, it was held that the law had been incorrectly applied by the Employment Tribunal as the Employment Tribunal should have focused on the Claimant’s employer (and where it was located) as opposed to just the Claimant’s role or duties. The correct test involved an objective assessment of whether the employee’s connection to the UK was stronger than his connection to Saudi Arabia and this included an assessment of all relevant factors. The Employment Appeal Tribunal said that fundamentally there was a binding agreement between the parties that the contract would be governed by British law and the Employment Tribunal had given too much weight to the Respondent’s subjective intentions in giving the Claimant a UK contract (for convenience) and the reasons why employment decisions had been taken in the UK (for pragmatism). Through this subjective approach, the Employment Tribunal had not adequately taken into account all of the relevant factors. The matter will be remitted to the Employment Tribunal and we await the final decision.

If you would like more information, please contact Millie Kempley