Creditsights Ltd v Satpal Dhunna
| Jurisdiction | England & Wales |
| Judge | Lord Justice Rimer,Lord Justice Floyd,Lady Justice Macur |
| Judgment Date | 19 September 2014 |
| Neutral Citation | [2014] EWCA Civ 1238 |
| Docket Number | Case No: A2/2013/1107 |
| Court | Court of Appeal (Civil Division) |
| Date | 19 September 2014 |
[2014] EWCA Civ 1238
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE EMPLOYMENT APPEAL TRIBUNAL
Mrs Justice Slade
Appeal No: UKEAT/0246/12/LA
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Rimer
Lord Justice Floyd
and
Lady Justice Macur
Case No: A2/2013/1107
Mr Andrew Stafford QC and Mr Daniel Tatton-Brown (instructed by Kemp Little LLP) for the Appellant
Mr Aiden O'Neill QC and Ms Aileen McColgan (appearing Pro Bono) for the Respondent
Hearing date: 20 May 2014
Introduction
This appeal is by CreditSights Limited ('CSL'). The respondent is Satpal Dhunna, a former employee of CSL. Following his dismissal by CSL, Mr Dhunna brought proceedings against it in the London Central Employment Tribunal ('the ET'), making claims: (i) under section 94(1) of the Employment Rights Act 1996 for unfair dismissal; (ii) under section 10 of the Employment Relations Act 1999 for breach of his right to be accompanied at a disciplinary hearing; and (iii) for accrued holiday pay.
Employment Judge Sigsworth, sitting alone, after a five-day pre-hearing review and by a judgment sent with reasons to the parties on 20 September 2011, held that the ET had no territorial jurisdiction to hear the first two claims, but did have jurisdiction to hear the third claim, which he directed should be listed for hearing. Having found the facts, he decided the jurisdiction questions by reference to the principles explained by the House of Lords in Lawson v. Serco Ltd [2006] ICR 250.
Mr Dhunna appealed to the Employment Appeal Tribunal ('EAT') against the dismissal of the first two claims and CSL cross-appealed against the holiday pay decision. Slade J, sitting alone, by an order of 5 April 2013, allowed Mr Dhunna's appeal and remitted the first two claims for re-hearing by a differently constituted employment tribunal. She also allowed CSL's cross-appeal and dismissed the holiday pay claim. We are not concerned with the holiday pay claim, but only with the first two claims. Slade J arrived at her decision in relation to those claims because she concluded that, in light of the guidance derived from three authorities decided since the hearing before EJ Sigsworth, the employment judge had innocently misdirected himself as to the task he had to perform. The decisions are those of the Supreme Court in Duncombe v. Secretary of State for Children Schools and Families (No 2) [2011] ICR 1312 and Ravat v. Halliburton Manufacturing and Services [2012] ICR 389; and that of the Court of Appeal in Bates van Winkelhof v. Clyde & Co LLP and another [2013] ICR 883.
With the permission of Underhill LJ, CSL appeals against the EAT's decision allowing the appeal in respect of the claims for unfair dismissal and for breach of the right to be accompanied. CSL asserts that Slade J erred in concluding that the later authorities showed that EJ Sigsworth had failed to carry out a particular, and necessary, comparative exercise in deciding the jurisdiction question; alternatively, that even if he had carried out such a comparative exercise, he would inevitably have reached the same conclusion; alternatively, that, if otherwise right, Slade J was wrong to remit the case for re-hearing by a differently constituted employment tribunal.
Andrew Stafford QC (who did not appear in either tribunal below) and Daniel Tatton-Brown (who appeared in the EAT, but not the ET) represented CSL. In both tribunals below, Mr Dhunna was represented by Ian Wright instructed under the Bar Council's Direct Access Scheme. Whilst for his appeal to this court, Mr Dhunna also had the benefit of a skeleton argument prepared by Mr Wright, our understanding until the commencement of the hearing was that he would be representing himself. At the hearing, however, he in fact had the good fortune to be represented by Mr O'Neill QC and Ms McColgan, appearing pro bono. I record the court's gratitude to them for their assistance.
The appeal turns essentially on whether the application of the relevant law to the facts found by EJ Sigsworth reveals the making of an error of law by him. I shall first summarise the facts he found.
The facts
CSL provides independent investment research to worldwide institutional investors. It carries out 'strategy' work relating to sectors and markets; and 'fundamental research' into a company's balance sheet, income statement and performance in comparison to other companies, and the production of reports for clients for use in their investment management businesses. It has three types of product: (i) subscriptions, under which clients pay a fee in order to enable their users to access CSL's investment reports online; (ii) custom reports, being research reports produced for the needs of a particular client; and (iii) 'BondScore', a scoring model used to access the probability of a company defaulting on its debt and which (as with other products) is accessed via the CSL website. Most of CSL's business derives from its subscription investment reports. Its clients consist of institutional investors such as pension funds, banks, investment advisers, insurance companies and hedge funds. They are based all over the world and often invest in markets outside their own area. CSL's business thus has a global factor. CSL's parent company, CreditSights Inc ('CS Inc'), is based in New York. CSL is a British company operating out of London.
Mr Dhunna began his employment with CSL on 23 January 2006 in London as an institutional sales person. At that date, CS Inc and CSL had only two offices, in New York and London respectively. They covered accounts across the world: in the United Kingdom, Germany and Benelux, Asia, the Middle East and Africa. In broad terms, CS Inc took responsibility for the United States and the Americas, although it also had some Asian accounts; and CSL took responsibility for Europe, Asia and the Middle East. Which office was responsible for which client was determined by where the client's head office was located, not by the location of any of its subsidiary companies. In 2006, CS Inc and CSL had a total of about 135 employees.
Mr Dhunna was, on appointment in 2006, paid a salary of £70,000 a year plus a bonus. That was the remuneration basis of all sales people who joined the company. After about a year, however, he moved to a part salary/part commission pay structure. His website profile described him as part of the CSL European sales team. As time went by, however, he became keen to sell and market CSL products to the Middle East and wished to live in Dubai. That was partly because of its favourable tax regime, but also because he wanted to increase sales to Africa and Asia, which he believed he could do from a Dubai office.
From March 2008, Mr Dhunna began to push this idea strongly with CSL. His line manager, Selina Strong, e-mailed senior colleagues in New York explaining his idea and the rationale for a move to Dubai. He wanted a role solely in the Middle East and Africa. He did not want to retain any legacy European accounts, but wanted a new person to be engaged to service the German, Benelux and UK accounts from June/July 2008. He also did not intend to be a mere salesperson in Dubai: he wanted a full business development role there, with a long term view. He wanted to continue to report to Ms Strong, who at about this time was back in New York: he considered that a direct line into the group's head office was important from a business development standpoint.
A decision was taken in New York to open a Dubai office. It was expected that the office would be opened in September 2008, but because of administrative difficulties it was not opened until January 2009, with Mr Dhunna moving there in October 2009. The intervening period was a transitional phase in which Mr Dhunna's role changed significantly in anticipation of his move to Dubai. David Kubale joined the London sales team and by 1 October 2008 Mr Dhunna had transferred his UK and European clients to him. From then on, Mr Dhunna focussed solely on sales to the Middle Eastern, Asian and African clients (i.e. to clients with head offices in those areas, even if they had European subsidiaries). He took over the Asian accounts of Catriona Boyd, a London sales colleague. In recognition of his new responsibilities, he was put on a new pay structure, with a £100,000 a year salary, plus a bonus which was in part guaranteed. In addition, and at his request, as from January 2009 he was paid in US dollars, whereas other London employees were traditionally paid in sterling at a dollar pay rate.
Towards the end of 2008, a decision was made to set up a CreditSights Asia business, operating from New Delhi. Reena Mithal was to be its managing director. She started managing Mr Dhunna and from 1 January 2009, when the Dubai office opened, she became his line manager. She was party to the decision allowing him to work from home in the UK prior to his departure to Dubai.
The setting up of the Dubai office was all done from New York: no one in London had any input into it. Ms Mithal was involved in the discussions over the costs of the new office and its projected revenue streams etc. CSL's chief executive officer in London, Simon Adamson, who reported to the chief operating officer in New York, had no involvement in the exercise, save that, as CSL's sole authorised signatory he signed various documents relating to the establishment of the Dubai office (a lease, power of attorney etc): but he had no input into the creation of such documents,...
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