‘Virtual employee’ allowed to bring claim in an employment tribunal
A recent case, Lodge v Dignity and Choice in Dying, provides further insight on whether employees working abroad for British companies can bring claims in an employment tribunal under the Employment Rights Act 1996 (ERA).
Surprisingly the Act doesn’t specify its territorial scope, so we have to look to case law for guidance. The case Serco v Lawson set out categories of employee that should be protected by our employment law, one of which is ‘expatriate employees’ posted abroad by British employers for the purposes of a business carried out in Great Britain. A later case, Ravat v Halliburton, streamlined the categories and said that tribunals need only ask where an employee's place of work is if not Great Britain, and whether there is a sufficiently strong link between the employment relationship and Great Britain.
Facts
In February 2008, Lodge was employed by Dignity and Choice in Dying, a British not-for-profit company. Shortly after starting, software was installed on her laptop, enabling her to work remotely from her home in west London, rather than in the employer's office in central London. In January 2009, Lodge returned to Australia for family reasons. She agreed with her employer that she would continue in the same role, although remotely from Australia using the remote working software. In June 2013, she resigned and brought claims in the UK employment tribunal for constructive unfair dismissal and whistleblowing.
Tribunal
The tribunal found that it did not have jurisdiction to hear her claims. The employment judge decided that Lodge was not really an ‘expatriate employee’ (under the legal test in Serco) as she had chosen to return to Australia rather than being posted by her employer. The key question then was whether she had an especially strong connection with Great Britain and our employment law (the test in Ravat). In her favour were the facts that her contract was governed by the law of England and Wales and it was clear the employer and its activities were located in Great Britain. However, the employment judge found that she did not have an especially strong connection as she was an Australian citizen, who asked to work in Australia, paid tax there and had an Australian pension.
EAT
Lodge appealed, and the Employment Appeal Tribunal allowed the appeal. The EAT found that there was no difference between an employee who consents to being posted abroad and an employee who chooses to work abroad. She, therefore, fell within a sub-category of ‘expatriate employee’. She did not lose her right to bring her claims as, instead of working as a ‘physical employee’ in the UK, she worked as a ‘virtual employee’ in Australia. Additionally, the fact that her employer did not dispute her assertion that she was unable to bring these claims in Australia, and that a grievance raised by her had been handled in London under the terms of the employer's staff handbook, supported the EAT's conclusion.
Comment
Technically this case doesn’t change the rules established in Serco and Ravat, but it does provide useful guidance in an area dominated by case law rather than by legislation. It is particularly significant in the light of the rapid growth of remote working. This is likely to continue, and increasingly is likely to include an international element, and employers need to be aware of the risks this could bring.
A useful question for employers to consider in this situation is whether an employee is working abroad as part of the employer's business in Great Britain or is working for a business conducted in a country other than Great Britain. If it is the first of these, the employee is likely to be protected under the ERA 1996; if it is the latter, the employee will probably lose this protection.
Paul Mander is a partner and head of employment and Stuart Smyth is a trainee at Penningtons Manches
For more employment law articles, visit HR-inform
