Are remote overseas workers able to claim unfair dismissal in the UK?
The case of Lodge v (1) Dignity & Choice in Dying; (2) Compassion in Dying considered whether Mrs Lodge, an Australian citizen who worked remotely for a UK charity from her home in Melbourne, was able to bring a claim for unfair dismissal against the charity in the London Employment Tribunal.
The Employment Appeal Tribunal (EAT) held that Mrs Lodge, the Claimant in the above case, was able to do so.
Constructive unfair dismissal
Mrs Lodge started working for Dignity & Choice in Dying in 2008 and later became employed by both the respondent charities. She was employed as head of finance when she and her family decided to return to Melbourne because her mother was unwell. The charities agreed to her request that she continue in her role as head of finance, working remotely from her home in Melbourne. She did this from January 2009 until her resignation in June 2013, after which she claimed constructive unfair dismissal.
Employment Rights Act 1996
The issue arose as to whether she was entitled to bring her claim in the Employment Tribunals of England and Wales.
There is currently no provision in the Employment Rights Act 1996 (ERA) for its territorial reach, so the issue has been left to the courts. The seminal case is Lawson v Serco , subsequently developed further by Ravat v Halliburton Manufacturing and Services Ltd .
In Lawson, Lord Justice Hoffman held that there must be something more than simply the employee’s being British and the employer’s being based in Great Britain for the tribunal to have jurisdiction. One example of a qualifying situation given in the judgment was an employee posted abroad by a British employer for the purposes of a business carried on in Great Britain.
In Ravat, Lord Justice Hope stated that the employment relationship must have a “sufficiently strong connection with Britain and British employment law such that it could be presumed that Parliament must have intended that [the ERA] should apply to [the claimant].”
The relevant time is when the employment terminates. In the Lodge case, the following factors were relevant in the EAT’s judgment:
- Mrs Lodge’s contract stated that it was governed by the law of England and Wales;
- She returned to London three times a year for work: for two weeks in January to help with the audit and twice for one-day events;
- She had attended meetings when she was based in London but no longer attended any meetings after she moved to Australia;
- She had raised a grievance after she moved to Australia, which had been dealt with in London;
- Her tax and pension affairs were dealt with in Australia and she paid no tax in the UK;
- She had no cause of action in Australia.
The EAT found that Mrs Lodge was entitled to bring her claim in the UK. His Honour Judge Clark treated her as akin to an employee who had been posted abroad to carry on business for a company based in the UK; it made no difference that the move had been at her request.
The fact that her grievance had been dealt with in London was a factor that weighed in her favour, as was the term of the contract in relation to governing law.
While an employee based in Australia is an extreme example, remote working is becoming more common and it is perfectly feasible that an employee might work remotely from another EU country, for example, Ireland.
In such a situation, it will be in the interests of both parties for the rights under the employment contract and the means of enforcing those rights to be clear and understood from the start. While provision in the contract as to jurisdiction will not be determinative, it will be a relevant factor. Each case will, however, turn on its facts, so bespoke advice on contractual terms and handling issues arising from the employment relationship should be sought if there is any doubt.
For more information on overseas workers or to discuss how the issues in this article might affect your business, contact our Leeds employment team.
Posted on Jan 27th, 2015 by Lyons Davidson