Remote Working and the Employment Tribunal

Is somebody working in an overseas office governed by UK law? It would be wrong to assume that they are not. Read our article to find out about a case that touches on this issue and find out what the law says.

It might be thought that a person working overseas isn’t covered by UK employment law and can’t take their employer to an Employment Tribunal. However, this is not always the case and depends on some important factors of which employers ought to be aware. This point was clarified by the recent case of Lodge v Dignity & Choice in Dying & Another UKEAT/0252/14/LA.

What happened?

Mrs Lodge, who was an Australian citizen, was employed as finance manager between 27th February 2008 and 28th June 2013 by the two respondents, a non-for-profit company and a charity. Both of these operated from their only office, which was located in Oxford Street, London.

It was agreed that the written contract of employment should be governed by the law of England and Wales and would come under the jurisdiction of the English courts should any claim arise in relation to it.

In December 2008, Mrs Lodge asked her employers if she could move back to Australia for family reasons and continue in her role as Head of Finance on a remote working basis via a virtual private network installed on her laptop. This proposal was agreed and from 1st January 2009, she worked from Melbourne. She paid tax in Australia and became an Australian resident. This meant that she paid a lower tax rate than would have been the case had she transferred there as a foreign resident.

While in Melbourne, she worked between 8am and 5pm local time. If she needed to contact the London office during UK office hours, she would make herself available in the evenings. Each January, she travelled to London for two weeks to help with the annual audit and she attended the AGM on two occasions.

In 2013, Mrs Lodge raised a grievance which was handled by her employers in London. The grievance appeal was unsuccessful and Mrs Lodge resigned, bringing claims of constructive unfair dismissal and detrimental treatment to the Employment Tribunal on the ground of having made a protected disclosure (a whistleblowing complaint).

The Tribunal

In the case in question, the employment tribunal Judge said “In the case of a truly expatriate employee who works and lives abroad there must be an especially strong connection with Great Britain and British employment law and it may not be sufficient to establish that there is a stronger link with Great Britain than with the jurisdiction in which the employee works.”

However, he felt that since “for the great majority of the working year she worked in Australia and that it would be correct to say that her workplace was in Melbourne…given that the Claimant lived and in a family and social sense was based in Australia, I find that whether or not she should be termed as “expatriate” employee, this is a situation in which it is necessary for her to show “an especially strong connection with Great Britain and British employment law”

He did not consider that the connection was sufficiently strong enough, since the “employee [was] an Australian citizen, who asked to be allowed to work in Australia and was so permitted, who relocated herself and her family to Australia, and who submitted herself to the Australian tax and pension regimes as opposed to the British ones”

The conclusion of the Employment Tribunal was that it had no jurisdiction to entertain Mrs Lodge’s Employment Rights Act claims.

She appealed the decision.

The EAT

The Employment Appeals Tribunal did not agree with the Employment Tribunal’s reasoning, stating that the employment Judge was incorrect when he did not count Mrs Lodge as a sub-category of expatriate worker as had been identified in the judgement on Lawson v Serco [2006] IRLR 289, which read:

“… the employee posted abroad to work for a business conducted in Britain and the employee working in a political or social British enclave abroad”

The examples given in that judgement were not definitive criteria and therefore, it did not matter that Mrs Lodge’s case did not fit the categories precisely.

Because her employer allowed her to work remotely from Australia for family reasons, her situation was no different from an employee posted to work abroad with his or her consent. Rather than carry out her duties whilst being physically present in the London office, she did the same duties as a ‘virtual employee’ from Australia. The only difference was her physical geographical location.

As had been agreed with her employers, the employment contract was subject to the laws of England and Wales, and all the work done by her in Melbourne was for the benefit of her employers in the UK. Her grievance had been handled in London in accordance with the terms of the employer’s UK employee handbook.

This meant that her connection with Great Britain and British employment law could be counted as a substantial one; the Employment Appeal Tribunal concluded that she was allowed to bring her claims in the UK.

What the law says

Section 94 (1) of the Employment Right Act 1996 says “an employee has the right not to be unfairly dismissed by his employer.” However, there is nothing in the act to show to whom this right should extend.

Section 196 had excluded employees who ordinarily work outside the UK from various employment rights contained in the Act but it was repealed in 1999 and no replacement for it was put in place.

The courts were left to consider matters on a case by case basis. Since 1999, there have been several cases which relate to the jurisdiction of the Employment Tribunal, including:

• Bryant v The Foreign and Commonwealth Office (EAT/0174/02 judgment 10 March 2003)

• Jackson v Ghost Inc (EAT/00547/02 judgment delivered 2 September 2003).

• Financial Times Ltd v Bishop [2003] UKEAT 0147

• Duncombe v Secretary of State for Children, Schools and Families (No 2) [2011] IRLR 840

• Ravat v Halliburton Manufacturing and Services Ltd [2012] IRLR 315.

• Dhunna v Creditsights [2014] IRLR 953.

• Botham v Ministry of Defence

• Crofts and others v Veta Limited and others

The last three cases, heard together at the High Court in 2006 made it clear that expatriate employees whose work lies entirely outside Great Britain can sometimes make employment claims in this country; the courts would still have to examine each case to decide whether it fell within the jurisdiction of the Employment Tribunals.

Implications for employers

Just because an employee works abroad does not mean that they will be unable to bring employment claims in the UK and no assumption should be made by employers regarding the status of such employees. The circumstances that will enable employees to bring claims have broadened and future Employment Tribunals will doubtless consider all of the facts of a case when determining whether jurisdiction exists. Employers will need to consider the nature of work carried out by their overseas-based employees and assess the strength of the connection with Great Britain and UK employment law that this gives employees.

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