Lawson v Serco revisited

Ismail Ravat joined Halliburton, a British registered company that is a subsidiary of a large US multinational corporation, in 1990 as an accounts manager. From 1995, he worked outside the UK, first in Algeria and from March 2003 in Libya for an associated German company. He was retained on normal UK pay and pensions structure, was paid in sterling into a UK bank account and paid UK tax and national insurance, although his salary was recharged to the German company who decided his salary increases and bonuses.

Work patterns

Mr Ravat’s work pattern was in accordance with Halliburton’s “international commuter assignment policy”, which differed from the company’s arrangements for expatriates who not only worked but also lived abroad. He worked on a rotational four weeks on/four weeks off basis, spending the four weeks off at home in the UK, during which he voluntarily dealt with work-related e-mail for a minimal amount of his time. UK employment law was the express governing law of his employment contract.

Halliburton assured Mr Ravat that he would continue to have the protection of UK law while he worked abroad, and he was given documentation confirming this. In May 2006, Mr Ravat was made redundant.

Jurisdiction

Did the employment tribunal have jurisdiction to entertain his unfair dismissal claim?

The relevant principles to apply to answer that question were given by the House of Lords in Lawson v Serco [2006] IRLR 289, which set out certain categories of overseas worker who have unfair dismissal protection:
l peripatetic workers, such as airline pilots, who are properly seen as being based in Great Britain. The terms of the contract are not helpful to decide where the base is: the conduct of the parties and the way they have been operating the contract must be considered instead;
l expatriate employees posted abroad by a British employer for the purposes of a business carried on in GB; and
l expatriate employees of a British employer operating within what is effectively an extra-territorial British enclave in a foreign country.

Applying those principles to Mr Ravat, the employment tribunal held he could bring his claim. The Employment Appeal Tribunal (EAT) disagreed. The Court of Session then, in turn, reversed the EAT’s judgment, holding that he could bring his unfair dismissal claim. However, it is, with respect, impossible to discern any consistent principles from the Court of Session’s judgments (see Ravat v Halliburton Manufacturing and Services [2010] CSIH 52), and the case provides no meaningful assistance to those trying to advise individuals who worked abroad, or those who employed them.

Of the two majority judgments:
l one (Lord Osborne) concludes that Lord Hoffmann's three categories in Lawson v Serco were not exhaustive, and that Mr Ravat did not fall into any of them; and
l the other (Lord Carloway) concludes that they were exhaustive, and represented “three definitive categories of employees, into which every person is capable of being squeezed”, and that Mr Ravat fell into one of them (peripatetic), but not the same one the EAT had picked previously as being “plainly” applicable to the facts (expatriate).

And yet those two judges, despite diametrically opposed reasoning, reached the same conclusion as to jurisdiction.

In the minority judgment, Lord Brodie agreed with the broad reasoning of one of the judges in the majority (Lord Carloway), in particular that the three Lawson v Serco categories were exhaustive, and yet came to the opposite conclusion, namely that there was no jurisdiction to hear the claim.

It will be remembered that the reason that the arguments in Lawson v Serco had to be resolved in the first place was the needless repeal (without replacement) in 1999 of an explicit territorial scope provision in the Employment Rights Act 1996 (what was then s 196).

It must be a matter of some concern to all employment lawyers that eleven years on from that repeal, and four years on from the House of Lords’ judgments in Lawson v Serco, the debate as to how to handle real-world facts when trying to determine the jurisdictional question in unfair dismissal claims is still raging and far from resolved, and remains capable of producing high-level appellate judgments, such as those in Ravat, which are riddled with contradictory conclusions from different judges, and from which it is wholly impossible to derive any practical guidance.

Melaine Adams, LexisPSL

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