The Territorial Scope of Employment Legislation and Choice of Law

AuthorUglješa Grušić
Publication Date01 Sep 2012
The Territorial Scope of Employment Legislation and
Choice of Law
Uglješa Grušic´*
Traditionally, the determination of the territorial scope of the statutor y rights conferred by
employment legislation forming part of English law has been regarded as an issue entirely
disconnected from the choice-of-law process. Indeed, this view formed the basis of the key
decision addressing the problem of territoriality,Lawson v Serco, decided by the House of Lords in
2006. After presenting the current state of the law with regard to the territor ial scope of
employment legislation, this article takes a critical look at Lawson v Serco. It is argued that the
‘European’ choice-of-law rules must have a greater importance for determining the ter ritorial
scope of employment legislation and, consequently, that the approach pursued in Lawson v Serco is
no longer correct, if it ever was, and should not be followed in the future.
In English employment law, claims that employees bring against employers fall
into three basic categories: claims for breach of contract, claims for breach of
statutory employment rights, and claims in tort for breach of the employer’s
personal and non-delegable duty of care or on the basis of the employer’svicar ious
liability for the torts of employees committed in the course of employment.
If the employment relation involves a foreign element, the question arises
whether English law or a foreign law applies.The common law of conflict of laws
answered this question by reference to the same three basic categories that exist
in substantive law. On the one hand,there were separate choice-of-law rules for
contractual and tortious claims. On the other hand,if the claim was based on the
employer’s breach of a right granted to the employee by a statute for ming part
of English law, it was a matter of statutory construction whether or not the statute
applied despite foreign elements in the employment relation. Nowadays, the
choice-of-law rules for contractual and non-contractual obligations in English
law are of EU law origin and are contained (excluded matters aside) in the Rome
I Regulation1and Rome II Regulation.2It is clear that if the employee advances
*PhD candidate, London School of Economics and Political Science. I am grateful to ProfessorTrevor
Hartley,Dr Jan Kleinheisterkamp,Mr Jacob Bomhoff and the anonymous referees for their very helpful
comments.The usual disclaimer, of course, applies.
1 Regulation 593/2008 on the law applicable to contractual obligations [2008] OJ L177/6 (Rome
I Regulation). The Rome I Regulation superseded the 1980 Rome Convention on the law
applicable to contractual obligations [1980] OJ L266/1, implemented in the UK law by the
Contracts (Applicable Law)Act 1990, on 17 December 2009 in relation to all contracts concluded
after this date: Arts 28 and 29(2).
2 Regulation 864/2007 on the law applicable to non-contractual obligations [2007] OJ L199/40
(Rome II Regulation).The Rome II Regulation repealed and replaced, in matters falling within
its scope, national choice-of-law rules on 11 January 2009 in relation to events giving rise to
damage which occured after its entry into force:Ar ts 31 and 32.
© 2012The Author.The Modern Law Review © 2012 The Modern Law ReviewLimited. (2012) 75(5) MLR 722–751
Published by BlackwellPublishing, 9600 Garsington Road, Oxford OX42DQ, UK and 350 Main Street, Malden,MA 02148, USA
a claim in contract or tort, the applicable law will be deter mined by the
choice-of-law rules of one of the two Regulations. But what happens if
the employee brings a statutory claim? Must one be guided solely by what the
statute says with regard to its territorial scope? Or does the application of the
statute depend, at least partly, on the choice-of-law r ules?
English courts still adhere to the traditional common law approach, as evi-
denced by the leading House of Lords decision of Lawson vSerco.3Faced with a
claim based upon an employee’s statutory right, the courts look into the statute’s
express or implied territorial scope. If the employee falls within the statute’s
territor ial reach,he can invoke the right conferred by it (provided,of course, that
the other prescribed conditions, such as qualifying period of employment,are also
satisfied). Otherwise, he cannot.
This article argues that, contrary to the conventional view upheld in Lawson v
Serco and academic literature,4the question of whether an employee can invoke a
statutory right must not be treated exclusively as a matter of statutory construction,
but should be answered primarily by reference to the choice-of-law rules. EU
Regulations lay down the choice-of-law rules for all obligations,and the Regu-
lations require a different approach to the application of employment r ights.If the
question is approached in this manner,there are two issues to be resolved.The fir st
issue is whether English law applies pursuant to the‘European’choice-of-law rules.
The second issue is whether there is a good reason not to apply the statute despite
the fact that English law is applicable or whether there is a good reason to apply the
statute despite the fact that English law is not applicable.Arguably, such reasons
rarely exist and the statute must normally be applied within the boundaries
determined by the choice-of-law rules. In other words, contractual and statutory
claims seem to have been by and large merged into a single category for the
purposes of private international law. Although this article deals with the terri-
torial scope of employment legislation, the issues discussed and the conclusions
reached are also potentially relevant for other fields of English law.
This article is divided into two parts.The first par t presents the current state
of the law with regard to the territorial scope of employment legislation. It
reveals the complex and often confusing nature of the traditional common law
approach.The second part proposes a different approach towards the statutory
employment rights that gives priority to the choice-of-law rules for employment
contracts for the determination of the terr itorial scope of employment legisla-
3 [2006] UKHL 3; [2006] 1 All ER 823.
4 See Sir L. Collins (gen ed), Dicey, Morris and Collins on the Conflict of Laws (London: Sweet &
Maxwell,14th ed, 2008) and the 4th Supplement to the 14th ed (London: Sweet & Maxwell, 2010)
at [1-049]–[1-063] and [33-086]–[33-103]; S. F. Deakin and G. S. Morris, Labour Law (Oxford:
Hart, 5th ed, 2009) 98–107; L. Merrett, Employment Contracts in Private International Law (Oxford:
OUP, 2011) at [1.02], [1.05]–[1.06], ch 7 and [8.38]–[8.42]; C. G. J. Mor se,‘Choice of Law,
Ter ritoriality and National Law:the Case of Employment’ in Vers de nouveaux équilibres entre ordres
juridiques: liber amicorum Hélène Gaudemet-Tallon (Paris: Dalloz, 2008) 763; R. Plender and M.
Wilderspin, The European Private International Law of Obligations (London:Sweet & Maxwell, 3rd ed,
2009) at [11-059]–[11-072] and [12-003]–[12-017]; A. Scott ‘The Territorial Scope of British
Employment Legislation’ [2010] LMCLQ 640.See also A. Briggs, ‘A Note on theApplication of
the Statute Law of Singapore within its Private International Law’[2005] Singapore Jour nal of Legal
Studies 189.
Uglješa Grušic´
© 2012 TheAuthor.The Moder n Law Review© 2012 The Modern Law Review Limited. 723
(2012) 75(5) MLR 722–751

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