Employers who recruit staff in the UK but employ them overseas could face actions under domestic tribunals in the event of an employment dispute, writes Aaron Hayward, an employment law specialist at DJM Solicitors.
A recent ruling by the Employment Appeal Tribunal (EAT) in the case of Jeffrey v the British Council confirmed that a Bangladesh-based employee could bring claims to the UK Employment Tribunal.
Mr Jeffrey was employed by the British Council to manage a teaching centre in Bangladesh but resigned and brought claims under the Employment Rights Act 1996 and the Equality Act 2010 in the UK Employment Tribunal.
The ET rejected the claims on the grounds he was working outside the UK and it was outside its jurisdiction. The general rule is that the place of employment determines which laws apply.
But the claimant appealed to the EAT and this was upheld on the grounds that he could demonstrate an “overwhelmingly stronger connection” with UK employment law than any other system.
The case could have repercussions for other UK-based employers with expatriate employees.
Here are three things we learned:
The connection to the UK has to be strong
A case will usually only be allowed if the connection to the UK is especially strong. Lord Hope already set out this precedent in a Supreme Court judgment in 2012.
In the Jeffrey v British Council case the EAT took five factors into account:
Mr Jeffrey was a UK citizen recruited in the UK to work for a UK organisation.
His contract of employment provided for English law to be applicable.
Mr Jeffrey was entitled to a Civil Service pension.
His salary was subject to a notional deduction for UK income tax.
The British Council is a public body that has an important place in British public life.
The judgment shows that even employees that are considered “truly expatriate” (i.e. those who live and work abroad) may fall under UK employment law. However, there were two features of Mr Jeffrey’s contract that the EAT remarked upon – the fact that Mr Jeffrey was paid in sterling and that was entitled to a civil service pension. Both of these were considered exceptional to find in the contract of an expatriate employee.
Non-government employers may be included
As mentioned in the previous point, although the British Council is not a direct part of the UK government, the EAT considered it to be a “non departmental public body” that plays an important role in the life of the nation.
That opens up the possibility that a large number of non-government employers could be considered important enough in public life to constitute a strong UK connection in future cases.
It would be good practice for employers that could be affected by this to review their policies and procedures.
Employers should make their contracts clear
Employers with expatriate employees should make sure their contracts clearly set out which legal system will govern and regulate the employment relationship. While most will want the familiarity of the UK system, that may not be desirable or even practical in every case. Legal advice should be sought if needed.