Ravat v Halliburton Manufacturing and Services Ltd
| Jurisdiction | Scotland |
| Judge | Lord Mance,Lord Kerr,Lord Brown,LORD HOPE |
| Judgment Date | 08 February 2012 |
| Neutral Citation | [2012] UKSC 1 |
| Date | 08 February 2012 |
| Docket Number | No 10 |
| Court | Supreme Court (Scotland) |
[2012] UKSC 1
Lord Hope, Deputy President
Lady Hale
Lord Brown
Lord Mance
Lord Kerr
Appellant
John Cavanagh QC
(Instructed by Paull & Williamsons)
Respondent
Aidan O'Neill QC
Christine McCrossan
(Instructed by Lefevre Litigation)
Heard on 22 November 2011
LORD HOPE , with whom Lady Hale, Lord Brown , Lord Mance and Lord Kerr agree
This case is about the employment status of individuals who are resident in Great Britain and are employed by a British company but who travel to and from home to work overseas. Halliburton Manufacturing & Services Ltd ("the appellant") is a UK company which is based at Dyce, near Aberdeen. It is one of about 70 subsidiary or associated companies of Halliburton Inc, which is a US corporation. It supplies tools, services and personnel to the oil industry. The employee, Ismail Ravat ("the respondent"), lives in Preston, Lancashire and is a British citizen. He was employed by the appellant from 2 April 1990 as an accounts manager until he was dismissed with effect from 17 May 2006. The reason for his dismissal was redundancy. The respondent complains that he was unfairly dismissed. The complication in his case is that at the time of his dismissal he was working in Libya. The question is whether the employment tribunal has jurisdiction to consider his complaint.
An employment tribunal sitting in Aberdeen (Mr RG Christie, sitting alone) held on 23 November 2007 that it had jurisdiction. That decision was set aside by the Employment Appeal Tribunal (Lady Smith, sitting alone) in a judgment which was given on 14 November 2008. The respondent appealed under section 37(1) of the Employment Tribunals Act 1996 to the Inner House of the Court of Session. On 22 June 2010 an Extra Division (Lord Osborne and Lord Carloway, Lord Brodie dissenting) allowed his appeal: 2011 SLT 44. The appellant now appeals to this court.
The question whether the respondent's complaint of unfair dismissal can be heard in Scotland is, as the decisions below show, not an easy one to answer. Section 94(1) of the Employment Rights Act 1996 provides: "An employee has the right not to be unfairly dismissed." Section 230(1) of that Act provides that "employee" means an individual who has entered into or works under (or, where the employment has ceased, worked under) a contract of employment. Neither of these provisions contains any geographical limitation. Nor is any such limitation to be found anywhere else in the Act. As Lord Hoffmann observed in Lawson v Serco Ltd [2006] UKHL 3, [2006] ICR 250, para 1, the statement in section 244(1) that the Act extends to England and Wales and Scotland means only that it forms part of the law of Great Britain and does not form part of the law of any other territory, such as Northern Ireland (to which the subsection states the Act does not apply), for which Parliament could have legislated.
Yet it is plain that some limitation must be implied. As Lady Hale noted in Duncombe v Secretary of State for Children, Schools and Families (No 2) [2011] UKSC 36, [2011] ICR 1312, para 5, it was agreed in that case that section 94(1) could not apply to all employment anywhere in the world. That must indeed be so: see also Lawson, para 6, where Lord Hoffmann said that all the parties in that case were agreed that the scope of section 94(1) must have some territorial limits. But this does not solve the problem as to where the line is to be drawn between those cases to which section 94(1) applies and those to which it does not. It is not straightforward. As Louise Merrett, The Extra-Territorial Reach of Employment Legislation (2010) 39 Industrial Law Journal 355, has pointed out, increasing labour mobility together with the proliferation of multinational companies and groups of companies has made the international aspects of employment law important in an ever-growing number of cases. The present case is an illustration of the problems that this gives rise to.
As I have already said, the respondent was working in Libya when his employment was terminated. From 1990 to 1995 he worked for the appellant in London. For the remainder of the period that he was employed by it he worked overseas, initially in Algeria. In March 2003 he was offered and accepted a transfer to Libya. The arrangement was on what was known as a commuter or rotational basis: employment tribunal's judgment, para 5. The appellant described the respondent's status in documentation attached to his employment contract as that of a UK commuter. This was because he continued to live in Great Britain and travelled to and from his home to work for short periods overseas. He worked for 28 consecutive days in Libya, followed by 28 consecutive days at home in Preston. In effect he was job sharing, working back-to-back with another employee. During the 28 days when he was at home the work was done in his place by another employee on the same arrangement. His rotational work pattern was in accordance with the appellant's international commuter assignment policy. Some of its overseas employees were accorded expatriate status. But that was not done in the respondent's case because he did not live abroad full-time. His travel arrangements and costs for commuting between his home in Preston and his workplace in Libya were paid for by the appellant.
The work that the respondent carried out in Libya was for the benefit of Halliburton Co Germany GmbH, which was another subsidiary or associated company of Halliburton Inc. The German company was charged by the appellant for the respondent's services. His duties included dealing with statutory compliance in relation to tax, audits and financial control and ensuring that all day to day transactions were reported to the German company in Germany. He reported on a daily basis to an operations manager based in Libya, but on policy and compliance issues he reported to an African Region Finance Manager, Mr Strachan, who was employed by another UK Halliburton subsidiary, Halliburton Management Ltd, based in Cairo. On human resources his contact was with the appellant's human resources department in Aberdeen and with another of its employees who was its human resources representative in Libya.
The respondent had little by way of day to day contact with the Aberdeen office while he was in Libya, and he had no formal obligation to do any work during the 28 days while he was at home. Any duties that he performed in Great Britain, such as responding while at home to emails, were incidental to that overseas employment. A feature of the appellant's commuter policy was that while he was working on a foreign assignment the employee's terms were such as to preserve the benefits, such as pay structure and pensions, for which he would normally be eligible had he been working in his home country other than those which were purely local such as a car allowance: employment tribunal's judgment, para 6. The respondent was remunerated on the normal UK pay and pension structure that applied to the appellant's home-based employees. He was paid in Sterling into a UK bank account, and he paid UK income tax and national insurance on the PAYE basis.
In 2003, when he started work in Libya, the respondent was concerned to know whether his employment contract would remain governed by UK employment law: employment tribunal's judgment, para 13. He asked his manager there what his position was and was assured that he would continue to have the full protection of UK law while he worked abroad. He was given a copy of a document in which overseas managers were told to contact the appellant's human resources team in Aberdeen when they were considering action in relation to poor performance, misconduct, dismissal or redundancy. The decision to dismiss him was taken by Mr Strachan of Halliburton Management Ltd under guidance from the Aberdeen human resources department. The respondent then invoked the appellant's UK grievance procedure, as he was advised that he was entitled to do by the human resources department. The grievance hearing, the redundancy consultations and the respondent's appeal against his dismissal all took place in the appellant's offices in Aberdeen. The respondent received a redundancy payment from the appellant. It was stated to have been paid to him in accordance with the Employment Rights Act 1996: see section 135, which confers the right to a redundancy payment to an employee who is dismissed by the employer by reason of redundancy.
The question as to what connection between Great Britain and the employment relationship was required to confer rights on employees working abroad was considered in Lawson v Serco Ltd [2006] UKHL 3, [2006] ICR 250. Three appeals were heard together in that case, as illustrations of the situations in which the question of territorial scope might arise. Mr Lawson was employed as a security adviser at the British RAF base on Ascension Island. Mr Botham was employed as a youth worker at various Ministry of Defence establishments in Germany. Mr Crofts was a pilot employed by a Hong Kong airline but was based at Heathrow. Having been presented with these examples, the appellate committee sought to identify the principles which should be applied to give effect to what Parliament might reasonably be supposed to have intended and attributing to Parliament a rational scheme: para 23, per Lord Hoffmann. As Lord Hoffmann, with whom all the other members of the committee agreed, observed in the final sentence of that paragraph, that involved the application of principles, not supplementary rules.
Lord Hoffmann took first what Parliament must have intended as the standard, normal or paradigm case: the employee...
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