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	United Kingdom Employment Appeal Tribunal
You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> YKK Europe Ltd v. Heneghan [2010] UKEAT 0271_09_1901 (19 January 2010) URL: http://www.bailii.org/uk/cases/UKEAT/2010/0271_09_1901.html Cite as: [2010] ICR 611, [2010] UKEAT 0271_09_1901, [2010] UKEAT 271_9_1901, [2010] IRLR 563

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APPEARANCES

 

For the Appellant	MR J LADDIE (of Counsel) Instructed by: Messrs Dundas & Wilson LLP Solicitors North West Wing Bush House LONDON WC2B 4EZ
For the Respondent	MR O HYAMS (of Counsel) Instructed by: Messrs GLP Solicitors 85 Chapel Street Manchester M3 5DF


 


SUMMARY

JURISDICTIONAL POINTS

Working outside the jurisdiction

Respondent's appeal against ET judgment that there was jurisdiction to determine Claimant's unfair dismissal claim. Post the Lawson v Serco analysis, and considering Hunt v United Airlines this appeal raised the question of an employee absent from work at the time of dismissal because he was suspended or on garden leave. ET judge was held to have misdirected herself on the test to be applied. Appeal allowed and matter remitted to be re-determined.


 


THE HONOURABLE MRS JUSTICE COX

1. This is an appeal by YKK Europe Ltd (Respondent below) against the Judgment of the London Central Employment Tribunal, promulgated with reasons on 29 May 2009, that the Tribunal had jurisdiction to determine the Claimant's claim of unfair dismissal. The issue is one of territorial jurisdiction, and the legal principles which apply, in circumstances where the Claimant was absent from work prior to, and on, the date of dismissal because he was on garden leave. Once again, the EAT is being asked to determine this issue in the context of facts which were not contemplated when the whole question of territorial jurisdiction was considered by the House of Lords in Lawson v Serco Ltd [2006] ICR 250

The Facts

2. After hearing evidence at a Pre-Hearing Review, held to determine the question of jurisdiction, the Employment Judge found the following facts, in so far as they are relevant to the issue in this appeal.
3. The Claimant, Michael Heneghan, commenced employment with a subsidiary of the Respondent, YKK Fastners (UK) Ltd (subsequently YKK (UK) Ltd), in August 1988. This company is incorporated and registered in the UK and is part of the worldwide YKK Group, the parent company of which is based in Japan. Their business is the manufacture of zips and their supply to clothes retailers.
4. The Claimant was promoted on several occasions and, in 1997, he moved from Cheshire to work at the company's head office in London. By 2002 he was the national marketing and business development manager.
5. In January 2002 the Claimant's employment was transferred to the Respondent company, in order for him to take up the role of Programme Director for Europe, the Middle East and Asia (EMEA) in the Global Marketing Group (GMG). Other sales managers from other European countries also transferred to the Respondent at this time to take up positions in the GMG, which was set up to deal with the global marketing patterns of multi national retailers and brands. The Employment Judge found that:

"The role of the Claimant and others who worked in Global Marketing in the European region was to obtain large contracts with major European brands which could result in YKK companies in other parts of the world, mainly Asia and Turkey, supplying the product to the manufacturers who were based there."

6. Between January 2002 and December 2004 the Claimant carried out this role working from the London office of the Respondent. A decision was then taken to set up a second office for the GMG in Germany. The Claimant was instructed to go and set this office up, and to work there. He did so.
7. This office was based in Wuppertal, at the premises of one of YKK's German companies. The rent was paid by the Respondent, as were the IT and other equipment costs and the salaries of the staff required to work there, including the Claimant, although their pay was processed through YKK Deutschland's payroll system. The Respondent also paid the rent for the Claimant's living accommodation in Germany.
8. Whilst he was working in Germany, all the Claimant's discussions regarding his annual salary and bonus payments were with Mr Noma, the Respondents HR manager, and Mr Ando, his line manager at the Respondent company. Mr Ando set and evaluated his objectives, and then decided the bonus to be paid, on the basis of his performance. The Claimant had no dealings with YKK Deutschland, save that his pay was processed through their system.
9. The Claimant advertised for and recruited some staff to work for him in Germany, who all had contracts showing that they were employed by YKK Deutschland. He also remained responsible for YKK Europe employees who were working in the GMG in London, and he continued to supervise and manage them. To begin with, he travelled back to London about once each quarter, for about three days at a time, to attend meetings for this purpose. Later on his visits to London increased, as a result of staff relationship problems, and he would then travel back about four times each month, playing an active role in trying to resolve these difficulties. Save for these visits, he was working all the time in Germany.
10. In about October 2007 Mike Smith, the Respondent's legal and risk manager, told the Claimant that it had been decided that he would not be continuing in the role of GMG Programme Director, and that he would have to cease working in that role at the end of the year and return to the UK. The Claimant told him that he had rented out his UK accommodation and would not be able to return to it at the end of the year. Mr Smith therefore agreed that he could continue to live in Germany, and that the Respondent would continue to pay his rent.
11. The Claimant ceased working for the Respondent in Germany on 31 December 2007. He did not go to work after that date, but he stayed in Germany. The Respondent continued to pay his salary, via YKK Deutschland as before, and to pay the rent for his German accommodation. The Claimant also retained his company car, computer and telephone.
12. The lease of his German accommodation was due to expire in May 2008. The Respondent informed him that it would not be renewing the lease after that date and that he would have to return the UK when it expired. The Employment Judge found as a fact that:

"The Claimant's understanding was that he had been placed on garden leave until it was decided whether to retain him in some other capacity or to terminate his employment."

13. When the lease expired the Claimant returned to the UK. The Respondent paid the costs of repatriating him to the UK, including the costs of shipping all his belongings back here. After his return the Claimant did not attend for work at the Respondent's London office, but he did have dealings and discussions with Mr Smith, with a view to seeing if they could reach some agreement on a mutually acceptable termination package.
14. Towards the end of June 2008 Mr Smith sent him a draft compromise agreement, though at that stage there was no reference to any figures or details of any payments to be made. On 3 July 2008 Paul Strange took over from Mr Smith as HR Manager. His understanding was found to be that the Claimant had been "assigned to Germany under YKK Europe (London office) supervision".
15. On 8 July Mr Strange sent the Claimant a letter, stating that he had been suspended from work in December 2007 and that the Respondent was now terminating his employment with effect from 30 June 2008. The Claimant subsequently lodged a Claim Form complaining of breach of contract and unfair dismissal.

The Tribunal's Decision

16. The Employment Judge first determined that, at the time of his dismissal, the Claimant was employed by the Respondent, as opposed to some other body, and that there was therefore jurisdiction to determine his breach of contract claim. There is no challenge to that decision.
17. The second matter to be determined was whether there was jurisdiction to determine his unfair dismissal claim, and the Judge considered that this was more difficult to decide.
18. She directed herself as to the relevant provisions of the Employment Rights Act 1996, and to the recent case law relating to territorial jurisdiction, namely the decision of the House of Lords in Lawson v Serco Ltd [2006] IRLR 289, and two more recent decisions of the EAT, Williams v University of Nottingham [2007] IRLR 660 and Hunt v United Airlines Inc [2008] ICR 934.
19. Her conclusions, at paragraphs 23 and 24 of the judgment, were as follows:

"Where was the Claimant working at the time of his dismissal?

23. I found this more difficult to decide. At the time of his dismissal, the Claimant was still employed by YKK Europe Ltd but was no longer living or working in Germany. YKK Europe Ltd had ceased to pay for his accommodation in Germany and had facilitated his return to the UK. He had returned to the United Kingdom but because he was on garden leave, while his future was being decided, he did not actually attend the workplace or do any work in the United Kingdom. It is, however, abundantly clear that in June 2008 he was not working in Germany. This case is different from both Hunt and Williams because in those cases the employees never returned to the UK and were still abroad when they were dismissed. It is also different from Hunt because in that case the only active elements of Ms Hunt's employment, namely trying the management of her sickness absence and her dismissal, were managed from Chicago. In this case, all the active elements of the Claimant's employment, namely trying to negotiate a termination package and his dismissal, were managed from London. I followed the test laid down in Hunt and considered the factual circumstances which indicated how the contract was being operated in June 2008. The factors set out (above in this paragraph) led me to the conclusion that in June 2008 the Claimant was employed and working at an establishment in Great Britain. I, therefore, concluded that the Tribunal had jurisdiction to hear the Claimant's complaint of unfair dismissal.

24. In case I am found to have erred in reaching that conclusion I considered whether in the circumstances of this case it could have been held that the Claimant was working in the UK even when he was working in Germany. I took account of what Lord Hoffman said about expatriate employees at paragraphs 35 to 40 in Lawson v Serco. The office in Wuppertal was described as a representative office of YKK Europe based in London. It was paid for by the office in London. The Claimant was managed by a manager and HR personnel in London and he in turn also managed and supervised employees in London. He spent some time in the London office. The Claimant was responsible for managing the European Global Management Group, some of whom were based in London and some in Germany. The Global Management Group was part of YKK Europe Ltd which was based in London. The German office was not a separate business but part of the business based in London. In my judgment, the circumstances of this case are such that section 94(1) would apply to the Claimant."

The Appeal

20. On behalf of the Respondent Mr Laddie challenges this decision on two bases. His first and main challenge is to the conclusion in paragraph 23. He submits, essentially, that the Employment Judge, relying on the decision in Hunt, erroneously invented a new genus of 'territorially uncertain' employee, namely the employee who is not working at the time of dismissal. She failed to identify into which of the categories identified in Lawson this Claimant fell; and in any event she erroneously limited the test to be applied to how the Claimant's contract was being operated in June 2008, rather than looking more broadly at the facts, as was recognised to be appropriate in Hunt. Her conclusion that, in June 2008, the Claimant was employed and working at an establishment in Great Britain, was arrived at in error of law and should be overturned.
21. Secondly, he submits, her alternative finding in paragraph 24, that the Claimant fell into the third, "expatriate employee" category identified in Lawson, is simply unsustainable on the basis of her own findings of fact. It is clear that the Claimant had a global remit. He was not merely working in Germany as a part of a business which the Respondent conducted in London. This finding too should therefore be overturned.
22. Mr Hyams, for the Claimant, submits that the judge approached the question before her in accordance with the law, arrived at findings of fact which were open to her on the evidence, and was entitled to conclude as she did on the facts found. He submits that Mr Laddie is seeking, impermissibly, to elevate the principles identified in Lawson into rigid rules, which would narrow the scope of inquiry to be undertaken by tribunals in such cases, in particular where they involve different facts from those which existed in that case.
23. At the time of his suspension he submits that this Claimant was working both in England and in Germany. However, by the time of his dismissal this Claimant had long since ceased to work abroad, and his contract was being operated in England. It was difficult to fit him into any of the Lawson categories, unless he was a special kind of peripatetic employee. He was effectively someone who worked in more than one place, as the Employment Judge recognised. The proper approach for the tribunal in such a case is to consider all the relevant circumstances, and then to stand back and decide where the employee was based. That is what this judge did, and the EAT should not interfere with her decision that he was based at an establishment in Great Britain when he was dismissed.

The Law

24. It is common ground that, in considering the issues arising in this appeal, the starting point is now the decision of the House of Lords in Lawson. The repeal, in 1999, of section 196 Employment Rights Act, which provided that the right to unfair dismissal did not apply "to any employment where, under his contract of employment, the employee ordinarily works outside Great Britain", had resulted in the courts being left to imply whatever geographical limitations seemed appropriate to the substantive right. In Lawson, Lord Hoffman, with whom all the other members of the House agreed, referred in his judgment to the history of developments since then, and the inferences it was submitted should be drawn from the repeal of that statutory provision. In view of the submissions made in this appeal I need to refer to the relevant passages.
25. Lord Hoffman considered that there were a number of ways in which the earlier history of the right not to be unfairly dismissed under section 94(1) may still be relevant. In respect of the first of these, he said as follows at paragraph 11:

"11. First, the original exclusion of cases in which the employee ordinarily "works outside Great Britain" shows that when Parliament created the new remedy in 1971, it thought that the sole criterion delimiting its territorial scope should be the place where the employee worked. If he ordinarily worked in Great Britain, he should be entitled to protection. If not, then he should not. It attached no significance to such matters as the places where he was engaged, from which he was managed or his employer resided. The repeal of section 196 means that the courts are no longer rigidly confined to this single litmus test. Nevertheless, the importance which parliament attached to the place of work is a relevant historical fact which retains persuasive force."

26. At paragraphs 23-24, he stated:

"23. In my opinion the question in each case is whether section 94(1) applies to the particular case, notwithstanding its foreign elements. This is a question of the construction of section 94(1) and I believe that it is a mistake to try to formulate an ancillary rule of territorial scope, in the sense of a verbal formula such as section 196 used to provide, which must then itself be interpreted and applied. That is in my respectful opinion what went wrong in the Serco case. Although, as I shall explain, I think that there is much sound sense in the perception that section 94(1) was intended to apply to employment in Great Britain, the judgment gives the impression that it has inserted the words "employed in Great Britain" into section 94(1). The difference between Lord Phillips of Worth Matravers MR and the majority of the court in Crofts v Veta Ltd was about how these words should be construed. But such a question ought not to arise, because the only question is the construction of section 94(1). Of course this question should be decided according to established principles of construction, giving effect to what Parliament may reasonably be supposed to have intended and attributing to Parliament a rational scheme. But this involves the application of principles, not the invention of supplementary rules.

24. On the other hand, the fact that we are dealing in principles and not rules does not mean that the decision as to whether section 94(1) applies (and therefore, whether the Employment Tribunal has jurisdiction) is an exercise of discretion. The section either applies to the employment relationship in question or it does not and, as I shall explain later, I think that is a question of law, although involving judgment in the application of the law to the facts. One may contrast the case of In re Paramount Airways Ltd [1993] Ch 223 in which the Court of Appeal decided that the provisions of the Insolvency Act 1986 for setting aside transactions at an undervalue had, as a matter of construction, world-wide application but that the court had a discretion to refuse to make an order in a case not sufficiently connected with England. Section 94(1), on the other hand, does not have world-wide application and the court must give effect to its implied territorial limitations. Nor is there any basis for the exercise of a discretion. Although rule 10(2)(h) of Schedule 1 to the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2004 SI 2004/1861 gives the Tribunal a general power to stay any proceedings, I think that it would be contrary to principle for an application under section 94(1) to be stayed on the ground of forum non conveniens. There is no other more convenient forum in which such a claim can be litigated because no other tribunal has jurisdiction to hear a claim under section 94(1): compare British Airways Board v Laker Airways Ltd [1985] AC 58. There may be tribunals in other countries which have jurisdiction to hear similar claims but that is not the same thing. I shall deal later with the question of double claiming."

27. He then proceeded to identify three categories of employees who would need to be considered, from the point of view of territorial jurisdiction. The first of these he described as "The standard case: working in Great Britain", stating as follows at paragraphs 25-27:

"25. Having said that, I am sure that Pill LJ was right in saying that what Parliament must have intended as the standard, normal or paradigm case of the application of section 94(1) was the employee who was working in Great Britain. As I said earlier, the fact that Parliament in 1971 and subsequently until 1999 thought that ordinarily working in Great Britain was an appropriate criterion for territorial scope remains indicative of what the general intent is likely to have been. Section 196(3), however, attributed decisive importance to whether "under the employee's contract of employment" he ordinarily worked outside Great Britain. This emphasis on the contract rather than the factual position at the time of dismissal was in accordance with the prevailing attitude to the employment relationship in the early 70s. It was seen simply as a matter of contract, the terms being agreed at the inception of the employment relationship. In Wilson v Maynard Shipbuilding Consultants AB [1978] ICR 376, 385C, Megaw LJ said that this made good sense: 'It means that the question whether or not this important statutory right exists is settled at, and can be ascertained by reference to, the time of the making of the contract.' "

26. In practice however this concentration on the original contract could produce arbitrary and counter-intuitive results when, as often happens, the contract allowed the employer to direct where the employee would work. In Carver v Saudi Arabian Airlines [1999] ICR 991 Mrs Carver was employed as a flight attendant under a contract made in 1986. It said nothing about where she was to work, but she was trained in Jeddah and then spent four years based in Bombay. She then moved to London, where she remained based at Heathrow until she resigned in circumstances which she said amounted to an unfair constructive dismissal. The Court of Appeal held that section 94(1) did not apply because the original contract had contemplated that she would be based at Jeddah.

27. Since 1971 there has been a radical change in the attitude of Parliament and the courts to the employment relationship and I think that the application of section 94(1) should now depend upon whether the employee was working in Great Britain at the time of his dismissal, rather than upon what was contemplated at the time, perhaps many years earlier, when the contract was made. I would therefore expect Mrs Carver's case to be decided differently if it came before the courts today. The terms of the contract and the prior history of the contractual relationship may be relevant to whether the employee is really working in Great Britain or whether he is merely on a casual visit (for example, in the course of peripatetic duties based elsewhere) but ordinarily the question should simply be whether he is working in Great Britain at the time when he is dismissed. This would be in accordance with the spirit of the Posted Workers Directive, even though that Directive is not applicable to the right not to be unfairly dismissed."

28. Mr. Laddie correctly points out that all of the three appellants in Lawson were in fact working immediately prior to their dismissal. I agree with him, however, that this passage makes it clear that the important question in the standard case, as regards the applicability of section 94(1), will ordinarily be whether the employee was working in Great Britain at the time of his dismissal. The terms of the contract and the history of the contractual relationship may of course be relevant to that question, but it is the question whether the employee was working in Great Britain at the time of dismissal, rather than merely on a casual visit, upon which the tribunal must focus.
29. The second category (at paragraph 28) was described as that of "Peripatetic employees", in respect of which it was acknowledged that it may not be easy to apply the concept of 'employment in Great Britain'. As Lord Hoffman pointed out, the Employment Rights Act continues to make specific provision for one class of peripatetic worker, namely mariners, but he said, "….I do not think that one can draw any inferences about what Parliament must have intended in relation to other peripatetic workers such as airline pilots, international management consultants, salesmen and so on". He noted that the solution previously adopted, having regard to the statutory provision, was to ask where the employee was based. He then said as follows:

"As I said earlier, I think that we are today more concerned with how the contract was in fact being operated at the time of the dismissal than with the terms of the original contract. But the common sense of treating the base of a peripatetic employee as, for the purposes of the statute, his place of employment, remains valid."

30. In relation to peripatetic employees, he then expressly approved the following guidance of Lord Denning MR in Todd v British Midland Airways Ltd [1978] ICR 959 at 964, in concluding, at paragraph 31, that there is no sensible alternative to asking where airline pilots (as in that case) and other peripatetic employees are based:

"A man's base is the place where he should be regarded as ordinarily working, even though he may spend days, weeks or months working overseas. I would only make this suggestion. I do not think that the terms of the contract help much in these cases. As a rule, there is no term in the contract about exactly where he is to work. You have to go by the conduct of the parties and the way they have been operating the contract. You have to find at the material time where the man is based."

31. I agree with Mr Laddie's submission that the emphasis in relation to this category of employee is therefore still on where the employee was ordinarily working, namely his base, at the time of dismissal.
32. The third category referred to (at paragraphs 35 – 40) was that of "Expatriate employees", which was said to raise more difficult issues, and in respect of which the notion of a 'base' provided no assistance. In relation to this category, Lord Hoffman said as follows:

"36. The circumstances would have to be unusual for an employee who works and is based abroad to come within the scope of British labour legislation. But I think that there are some who do. I hesitate to describe such cases as coming within an exception or exceptions to the general rule because that suggests a definition more precise than can be imposed upon the many possible combinations of factors, some of which may be unforeseen. Mr Crow submitted that in principle the test was whether, despite the workplace being abroad, there are other relevant factors so powerful that the employment relationship has a closer connection with Great Britain than with the foreign country where the employee works. This may well be a correct description of the cases in which section 94(1) can exceptionally apply to an employee who works outside Great Britain, but like many accurate statements, it is framed in terms too general to be of practical help. I would also not wish to burden tribunals with inquiry into the systems of labour law of other countries. In my view one should go further and try, without drafting a definition, to identify the characteristics which such exceptional cases will ordinarily have.

37. First, I think that it would be very unlikely that someone working abroad would be within the scope of section 94(1) unless he was working for an employer based in Great Britain. But that would not be enough. Many companies based in Great Britain also carry on business in other countries and employment in those businesses will not attract British law merely on account of British ownership. The fact that the employee also happens to be British or even that he was recruited in Britain, so that the relationship was "rooted and forged" in this country, should not in itself be sufficient to take the case out of the general rule that the place of employment is decisive. Something more is necessary.

38. Something more may be provided by the fact that the employee is posted abroad by a British employer for the purposes of a business carried on in Great Britain. He is not working for a business conducted in a foreign country which belongs to British owners or is a branch of a British business, but as representative of a business conducted at home. I have in mind, for example, a foreign correspondent on the staff of a British newspaper, who is posted to Rome or Peking and may remain for years living in Italy or China but remains nevertheless a permanent employee of the newspaper who could be posted to some other country. He would in my opinion fall within the scope of section 94(1). The distinction is illustrated by Financial Times Ltd v Bishop [2003] UKEAT 0147, a decision of the Employment Appeal Tribunal delivered by Judge Burke QC. Mr Bishop was originally a sales executive working for the Financial Times in London. At the time of his dismissal in 2002 he had been working for three years in San Francisco selling advertising space. The Employment Tribunal accepted jurisdiction on the ground that under European rules it had personal jurisdiction over the Financial Times: see article 19 of Regulation EC 44/2201. But that was not a sufficient ground: the Regulation assumes that the employee has a claim to enforce, whereas the question was whether section 94(1) gave Mr Bishop a substantive claim. Having set aside this decision, the EAT was in my opinion right in saying that the findings of fact were inadequate to enable it to give its own decision. The question was whether Mr Bishop was selling advertising space in San Francisco as a part of the business which the Financial Times conducted in London or whether he was working for a business which the Financial Times or an associated company was conducting in the United States: for example, by selling advertising in the Financial Times American edition. In the latter case, section 94 would not in my view apply. (Compare Jackson v Ghost Ltd [2003] IRLR 824, which was a clear case of employment in a foreign business).

39. Another example is an expatriate employee of a British employer who is operating within what amounts for practical purposes to an extra-territorial British enclave in a foreign country. This was the position of Mr Botham working in a military base in Germany. And I think, although the case is not quite so strong, that the same is true of Mr Lawson at the RAF base on Ascension Island. While it is true that Mr Lawson was there in a support role, employed by a private firm to provide security on the base, I think it would be unrealistic to regard him as having taken up employment in a foreign community in the same way as if Serco Ltd were providing security services for a hospital in Berlin. I have no doubt that Bryant v Foreign and Commonwealth Office [2003] UKEAT 174, in which it was held that section 94(1) did not apply to a British national locally engaged to work in the British Embassy in Rome, was rightly decided. But on Ascension there was no local community. In practice, as opposed to constitutional theory, the base was a British outpost in the South Atlantic. Although there was a local system of law, the connection between the employment relationship and the United Kingdom were overwhelmingly stronger.

40. I have given two examples of cases in which section 94(1) may apply to an expatriate employee: the employee posted abroad to work for a business conducted in Britain and the employee working in a political or social British enclave abroad. I do not say that there may not be others, but I have not been able to think of any and they would have to have equally strong connections with Great Britain and British employment law. For the purposes of these two appeals, the second of these examples is sufficient. It leads to the conclusion that the appeals of both Mr Lawson and Mr Botham should be allowed."

33. Once again, the emphasis at paragraph 37 was on the general rule that it is the place of employment at the time of dismissal which is decisive, i.e. where the employee is working. Two examples only were given, of cases where expatriate employees might be able to establish a sufficiently strong connection with Great Britain to displace that general rule, and Lord Hoffman was unable to think of any others. In reality it will, in my view, be a rare case indeed where an expatriate employee who ordinarily works abroad will fall within the scope of section 94(1).
34. It is common ground before me that the question whether a case falls within the territorial scope of section 94(1) is a question of law. This was made clear at paragraph 34 of Lawson, although Lord Hoffman also stated that it is, on the other hand, a question of degree "…on which the decision of the primary fact-finder is entitled to considerable respect".
35. One of Mr Laddie's main complaints is that the Employment Judge, having referred to Lawson at the outset, in paragraphs 3 and 4 of her judgment, then failed to return to it and to apply the correct test at paragraph 23, when deciding the case on the basis of her factual findings. She relied instead on the decision in Hunt, which concerned an employee who was absent from work at the date of her dismissal.
36. The Claimant in Hunt was a flight attendant who, it was agreed, fell within the "peripatetic employees" category referred to in Lawson. She had been based in Paris for five years since 2000, when it was agreed, in February 2005, that she would transfer to Heathrow. She fell ill in March 2005, however, and her transfer never took place. The remaining period of her employment, during the lengthy capability process which followed, was managed from her employer's head office in Chicago, and in fact she never returned to work before being dismissed in February 2007. It seems, therefore, that she was absent from work on ill-health grounds for some two years, during which time she continued to live in Paris. The employment tribunal, applying Lawson, held that there was no jurisdiction to determine her unfair dismissal claim because she was not based at Heathrow (and was not therefore working in Great Britain) at the time of dismissal.
37. On her appeal to the EAT, the question of law arising on the particular facts of that case was identified as follows:

"where a peripatetic employee is to be transferred from overseas to work at a base in Great Britain, but becomes ill before the transfer takes effect and is dismissed whilst still absent from work through illness, does the employment tribunal have jurisdiction to hear a claim for unfair dismissal?"

38. The Claimant advanced two grounds of appeal. First, it was argued that the tribunal erred in failing to find where her base actually was. This was rejected, on the basis that the tribunal had to determine only whether her base was or was not in London, and the decision that it was not was sufficiently stated and reasoned. On the facts it was obvious that Chicago was found to be her base, but there was no duty upon the tribunal to go on to say so.
39. The second ground, of more interest to this appeal, was that the tribunal failed correctly to follow the principles set out in Lawson. The correct approach, in a case of long term sickness absence, was said to be to ask where the employee would ordinarily have been working, or based, if she had not been absent through sickness, i.e. to apply what was said to be a 'but for' or 'as if' test.. In this case the answer, it was submitted, could only have been that she would have been working in London.
40. The Respondent contended that Lawson required the tribunal to look, not at the terms of the contract of employment, but at how that contract was in fact being operated at the time of the dismissal, i.e. to apply an 'as is' test, as the EAT described it. On the facts as found, she was not working at all and had no involvement whatsoever with the Respondent in London. The only active content of her employment relationship was her long term sickness absence, which was being managed entirely from Chicago, to which base she was told to report throughout her period of absence.
41. At paragraphs 37 – 39 HH Judge Burke QC held as follows:

"37. While it is tempting to apply the "but for" or "as if" test, in my judgment the Tribunal was right to resist that temptation. I agree with Mr West that, if the Tribunal had looked only at where Ms Hunt was working at the material time, it would have applied too narrow a test; for, because of her sickness, she was not working at all; yet neither party suggested that she had no base. In the standard case of a peripatetic employee the base is likely to be the place where that employee ordinarily works, as Lord Hoffmann said at paragraph 29 of his speech, adopting what Lord Denning had said in Todd v British Midland Airways [1978] IRLR 320. However in the case of a peripatetic (or any) employee there may be many situations in which the employee is not actually working at the date of the dismissal; and in such a case, in my judgment, the Tribunal must look more broadly at the facts in evaluating where the employer's base was rather than simply asking where the employee was working at that date.

38. However it does not, in my judgment, follow that in such a case the Tribunal must as a matter of law ask itself what would have been the position if the facts were different. What the Tribunal was required to do in this case was to consider the factual circumstances which indicated how the contract was being operated at the time of the dismissal. The Tribunal expressly referred to the need to take that approach in paragraphs 20 and 29 of its judgment. Having directed itself as it did in paragraph 29, the Tribunal then in paragraph 30 did not base itself only on where Ms Hunt was or had been working; it referred to the indications, as to which it had found the facts earlier in the judgment, which pointed away from a London base and, specifically, to the process of managing her ill health issues in Chicago.

39. Had the Tribunal accepted the temptation held out to it by Mr West at paragraph 26 it would, in my judgment, have been departing from the approach required of it by Lawson, namely to look to see how the parties were at the relevant time actually operating the contract. Although Lawson lays down that, at least at present, the evaluation which has to be carried out is a question of law, that evaluation is likely to be fact-sensitive; that is why Lord Hoffmann regarded it as important that respect should be paid to the decision of the primary fact finder; and while it is natural to seek a solution to a difficult task of evaluation by asking what would be the solution were the facts in some way different, that in my judgment would, in the present context, have been an erroneous approach or at least not an approach which the evaluator is bound in law to adopt."

42. Mr Laddie submits that, having found at paragraph 37 that a broader factual enquiry as to the employee's base is required, in a case where the employee is not actually working at the date of dismissal, a proposition with which he does not disagree, the judge then, in error, held in the following paragraphs that what the tribunal in that case was required to do was to consider "how the contract was being operated at the time of dismissal". This, he submits, is in fact a narrow test, which fails to reflect the decision in Lawson. To focus exclusively on a snapshot of how the contract was being operated at dismissal, i.e. on the last day of employment, is not looking more broadly at the facts.
43. In my judgment, however, the judge was not advocating a narrow test. The phrase used by the judge at paragraphs 38 and 39, in identifying the test to be applied, was in fact the phrase used by Lord Hoffman when considering the focus of the modern enquiry in such cases (at paragraph 29 of Lawson). In referring to that focus as being "how the contract was in fact being operated at the time of dismissal" he was emphasising the need to look at the factual position as at the time of dismissal, rather than the original contractual terms, i.e. what was anticipated at the outset of the employment relationship.
44. In my view, when using that phrase in Hunt, the judge was emphasising that in respect of a peripatetic, or indeed any, employee who is absent from work at the date of dismissal, it is the factual position as at the time of dismissal that is important; and that, in deciding that question, a broader factual enquiry is required. That in my view is the natural reading of paragraphs 37-39 of the judgment.
45. Support for this view is to be found in paragraph 43, where the judge clearly took into account the fact that the only active element of that Claimant's employment, for the whole of a two year period, was the management of her continuing sickness absence, which was found to have been managed entirely from the USA and which culminated in her dismissal. This led him to agree with the tribunal's factual evaluation, having regard to the broader factual circumstances in that case.
46. In Hunt, therefore, the EAT was doing no more than adapting the principles established in Lawson, in order to cater for the unusual circumstances of a particular peripatetic employee, who was absent on long term sick leave at the date of dismissal. Absence from work at the date of dismissal is not uncommon; however, whatever the category of employee, and as the judge himself recognised at paragraph 37, a broader factual enquiry will therefore be appropriate in other situations where an employee is not actually working at dismissal.
47. In my judgment, therefore there is no conflict with the decision in Lawson and no error is disclosed in the approach adopted by the judge in Hunt. He was clearly not advocating that only a snapshot view of what was happening as at the moment of dismissal would be appropriate in such a case. Nothing in either Hunt or Lawson (or indeed in Williams v University of Nottingham [2007] IRLR 660, which in my view adds nothing to this debate) suggests that this would be the appropriate test in respect of an absent employee, whether peripatetic or otherwise.
48. Mr. Laddie submits, relying on these decisions, that the following approach is to be adopted in any case where territorial jurisdiction is in issue. Firstly, an employment tribunal should make a clear finding as to which of the categories identified in Lawson applies, i.e. into which particular category the employee falls, on the facts found. Secondly, in a case where the employee was absent from work at the time of dismissal, a broader factual enquiry is required in order to decide whether that employee is entitled to the protection afforded by section 94(1).
49. Mr. Hyams, on behalf of the Claimant, advocates a more flexible approach. He submits that it is wrong to read the decision in Lawson as if it were a statute. The principles established are of course to be applied in appropriate cases, but the law does not stand still and the House of Lords cannot be taken to have foreseen all the possible circumstances in which section 94(1) could apply. The factual circumstances arising in this case were not envisaged in Lawson and a different, more flexible and common sense approach is required. This approach recognises that cases cannot be restricted to the three categories identified in Lawson. The two categories identified, of peripatetic and expatriate employees, should not themselves be regarded as separate or rigid categories, or as constituting the only categories of employee whose place of work is not ordinarily Great Britain, but who may nevertheless still rely on section 94(1).
50. These categories, he suggests, can be 'stretched' to accommodate employees whose particular circumstances may mean that they fall into both categories. Alternatively, even if a Claimant who does not ordinarily work in Great Britain cannot establish that he falls into either of these categories, as Lord Hoffman defined them, he may still be able to rely on section 94(1), depending on the facts found. Lawson established principles, not rules, and their application will always depend on the tribunal's findings, after what will always be a wholly factual enquiry. On appeal, the decision of the primary fact-finder will always be entitled to considerable respect.
51. Whilst I recognise the need to respect the employment tribunal's findings of fact, which is of course, absent perversity, the position always adopted in the EAT, I prefer Mr. Laddie's submissions as to the correct approach to be adopted in these cases. In my view the flexible and entirely open-ended approach suggested by Mr. Hyams lacks clarity, and fails to acknowledge the detailed consideration recently given to this issue in Lawson. Whether section 94(1) applies or does not apply to a particular employment relationship is a question of law, albeit one involving the exercise of judgment in applying the law to the facts. A submission, so soon after the House of Lords has pronounced on the matter, that the categories of employee are not closed, and that the applicability of section 94(1) will always depend on the facts found, I regard as unpersuasive. I accept, of course, that the circumstances within each category will change, as the facts of both Hunt and the present case demonstrate. I note too, that in the Williams case, there was no dispute that Lawson should be followed, and a decision reached as to the appropriate category for the Claimant employee.
52. The starting point for tribunals, in each case, will therefore be into which of the categories identified the particular claimant falls. Lawson now establishes the test to be applied, in each of the three categories of employee identified, and the focus now should be on what was happening as at the date of dismissal rather than at the outset of the relationship. In a standard case, the application of section 94(1) will depend on whether the employee was working in Great Britain at the date of dismissal. For peripatetic employees the most helpful test is to decide where the employee was based at that time. Expatriate employees, who both work and are based abroad, will not normally fall within the scope of section 94(1), but they might do so if they were posted abroad by a British employer, for the purpose of a business carried on in Great Britain, or worked in what was in effect an extra-territorial British enclave in a foreign country.
53. Where the employee is not working at the date of dismissal, for whatever reason, the test to be applied will need to be adapted to meet the different circumstances existing for the particular category of employee, as in the case of Hunt. In these cases a broader factual enquiry will be required in order to decide what the true position was when the employee was dismissed.
54. After the oral hearing of this appeal, Mr Laddie lodged further written submissions, to which Mr. Hyams responded, as to what that broader factual enquiry might involve. He suggested a series of questions to be followed, in a two stage investigation, which could provide helpful guidance to employment tribunals when faced with a territorial jurisdiction issue in cases where the employee was absent from work at dismissal.
55. Having considered these further submissions, however, I agree with Mr. Hyams that the somewhat prescriptive series of questions proposed runs the risk of narrowing the scope of a tribunal's inquiry, or of suggesting the "invention of supplementary rules", which Lord Hoffman regarded as incorrect in Lawson. The nature and breadth of the inquiry to be conducted will always depend on the particular circumstances of each case, and it is unwise to attempt to define its scope.
56. As part of the broader, factual inquiry which will usually be required, however, I agree with Mr. Laddie that, in addition to considering the category into which an employee falls, the following factors would in general be relevant in determining the overall picture in absence from work cases, and in deciding whether section 94(1) applied, though I do not suggest that this is an exhaustive list, or that all the questions will be relevant in all cases:- why the employee was absent from work, and the length of his absence before dismissal; where the employee was ordinarily working, or based, and for how long, before his absence from work began; where the employee would have been working at dismissal, if he had not been absent from work; whether there was an active employment relationship between the date of his absence from work and the date of dismissal; from where the contract was being operated at dismissal; and whether the tribunal would have had territorial jurisdiction as at the date on which the Claimant became absent from work. Mr Hyams agreed that the history of the employment relationship would be relevant and did not disagree that a number of the other factors listed here would also be relevant to this inquiry, so long as it is understood that it is for the employment tribunal always to decide the relevance of particular facts in the case before them.
57. It will always be for tribunals to decide the weight to be given to the different factors considered in any case, and to determine, ultimately, whether the nature of the events which occurred before and during the employee's absence, up to the date of dismissal, is such that section 94(1) applies and they have territorial jurisdiction to determine the claim.

Conclusions

58. In the circumstances I agree that the Employment Judge in this case appears to have asked herself the wrong question at paragraph 23. Mr Hyams sought to persuade me that, although the wording used was unfortunate, the judge in fact applied the right test and was entitled to find as she did on the evidence. I disagree. The judge made no finding as to which of the categories this Claimant fell into; indeed she does not even refer to Lawson at all at this point, saying rather that she "followed the test laid down in Hunt". Having regard to both paragraphs 23 and 24, I agree with Mr. Laddie that she appears to have proceeded on the basis that a further, separate category of 'non-working employee' was established in Hunt, and that it was unnecessary for her to make a finding as to which of the Lawson categories this Claimant belonged to. That was an error of law.
59. Further, it appears that she adopted an impermissibly narrow test, in considering only "the factual circumstances which indicated how the contract was being operated in June 2008", which led her to conclude that, at that time, "the Claimant was employed and working at an establishment at Great Britain". The basis for this finding seems to be that the Claimant was no longer living or working in Germany at this date; that he had returned to the UK; and that he was doing no work in the UK because he was on garden leave whilst his future was being decided.
60. It was common ground, however, that he had not been working at an establishment in Great Britain, or anywhere else, as at the date of his dismissal. The judge appears to have misunderstood the effect of paragraphs 37-39 of Hunt, and to have considered only a snapshot of what was happening in June, when the emphasis at that point was only on a negotiated termination of the relationship, rather than looking more broadly at the facts, as suggested above and as was required, in my view, in this case.
61. I also accept Mr. Laddie's submission that the judge's alternative finding in paragraph 24 is unsustainable. The facts found in this case show that the Claimant was sent to Germany to assist with the EMEA business of his British-based employer (see paragraph 12 of the reasons). It is therefore apparent that he was not working in Germany merely as a part of the business which the Respondents were conducting in London. I agree that he was found to have a global remit, working on business activities carried on by the British business abroad and not in 'British business'. The facts found cannot support what would in any event be an exceptional finding that this Claimant fell into the category of an expatriate employee.
62. For these reasons, therefore, this appeal must be allowed.
63. Mr. Laddie invited me, in these circumstances, to consider substituting a finding that there was no jurisdiction to entertain this claim. That, however, is not a course which I consider is open to me, having regard to my findings as to the test to be applied, and to the fact-sensitive nature of the necessary inquiry in this case. There was, to start with, no finding below as to the category into which this Claimant fell. Mr Hyams submitted before me that he was in a special category, as a particular kind of peripatetic employee, but this appears not to have been argued fully below. I have to say that it was also unclear, on the judge's findings, whether the Claimant was in fact placed expressly on garden leave at the time of dismissal, as he believed, or was merely suspended from employment, as was also mentioned in argument. In all the circumstances this matter must therefore be remitted for determination on the evidence before a fresh tribunal.