England and Wales Court of Appeal (Civil Division) Decisions

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
		19th September 2014

Lord Justice Rimer :

Introduction

1. 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.
2. 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.
3. 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.
4. 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.
5. 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.
6. 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

7. 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.
8. 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.
9. 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.
10. 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.
11. 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.
12. 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.
13. 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, which was handled from New York by David Good, CS Inc's General Counsel and Chief Finance Officer.
14. The New York office decided that the Dubai office would, from a legal point of view, be a branch or representative office of London. That decision was made on advice of Dubai-based lawyers as to the complex regulatory regime within which the office had to operate. EJ Sigsworth interpreted the documentation as showing that 'branch' and 'representative' was terminology that was used loosely and interchangeably. Rather than attempt to summarise EJ Sigsworth's take on it, I shall quote what he said:

'3.3 … For example, in the lengthy written advice from the Dubai lawyers, it was stated that the establishment of branch offices of foreign companies in the UAE is established by ministerial decision. A branch office, on registration, carries on business under the name and form of the parent company. The branch office does not have a separate legal entity of its own but is considered as part of its parent company. A branch office is not permitted to carry out commercial activities and cannot physically deal in or trade in goods within the UAE. It is, however, permitted to render maintenance and service repairs to customers of its parent company. A branch office can promote, advertise and market its parent company's goods and services and even enter into contracts for sale. However, because of the prohibition against physically dealing in goods, the goods, when supplied to customers, must be imported into the UAE in the name of the customers as consignees etc. However, the Dubai based lawyer, in an e-mail to Mr Good, dated 23 October 2008, wrote setting out the requirements and procedures applicable to the incorporation of a representative office. The representative office can only carry out administrative and liaison office services. A representative office of a foreign company is allowed to promote its parent company's activities. To set up a representative office, the services of a UAE national or 100% UAE entity must be engaged to act as a sponsor of the entity etc. [CSL] reached an agreement with a local agent to assist in obtaining all necessary permits and licences to operate in Dubai. Again, the terminology in the agreement is somewhat loose. In the preamble it states: "whereas the company wishes to establish a branch in the Emirate of Dubai, UAE to carry out the activities of representative office (the branch)." The company there is identified as [CSL]. Internally, and so far as CreditSights generally was concerned, Mr Good decided that the Dubai office would be a branch of the London office, rather than a subsidiary company, given the restrictions on what it could do. In e-mail exchanges with colleagues and with the Dubai lawyers, Mr Good describes the Dubai office as a branch of CreditSights' UK operations. In the commercial register of the Government of Dubai, again terminology is loose. The trade name is given as [CSL] (Rep Office). However, the legal type is designated as branch of foreign company. Other relevant factors include the fact that the sales made in Dubai would be handled in London (in other words, invoiced from and payments remitted to London). The India office in New Delhi was similarly supported through the United States. The administration of the Delhi office [sic: counsel agreed that this should read "Dubai office"] remained in London and [Mr Dhunna] remained on the London payroll, albeit he was being paid in US dollars and without national insurance and tax deductions being made. However, [Mr Dhunna] was not entitled to be included in the UK pension plan and he had a separate health and dental policy in Dubai. He was entitled to the benefits of UK holidays (statutory and bank). All the expenses of the Dubai office and of [Mr Dhunna] were paid for by London.'

15. EJ Sigsworth made further findings as follows. Mr Dhunna regarded his move to Dubai as permanent, or semi-permanent. He married shortly before his move, but did not buy a matrimonial home in the UK: he and his wife went to live with her parents during the few months before his move. He obtained a three-year visa and EJ Sigsworth presumed that he intended to renew it if, at its expiry, he was still there. In an e-mail of 1 November 2009 that he sent to a colleague shortly after his move to Dubai, Mr Dhunna said he was glad to be out of the UK and hoped never to have to return. He agreed with Ms Mithal that his business card would describe him as "Director, Middle East, Asia and Africa sales'. CSL changed its publicity material by describing him as part of CreditSights' Middle East and Asian operations, to which was added a general description of the role he would be performing. He assisted Ms Mithal in the line management of two junior, Delhi-based employees, assisted in their training, advised them and included them in his weekly Asian sales call. He continued, however, his contact with London staff to some extent, mainly because he was reliant on analysts based there for research and reports in particular markets, which could often be world-wide: the research facilities in Delhi were either non-existent or in their infancy. The office manager in London, Ms McNally, had however no authority to make decisions, which were taken by managers in New York, notably Mr Good. Queries regarding the pricing of contracts were dealt with in New York. CSL's financial results were consolidated with those of CS Inc, but sales to Middle Eastern and European clients were recorded as Dubai revenue and Mr Dhunna's sales were recorded separately from the UK sales on the internal management accounts. By 2010, the turnover of the Dubai office was shown in the group's profit and loss account separately from that of the UK office.
16. London's initial support for Mr Dhunna was intended to be temporary: the plan, as happened, was to set up a Singapore office, which was to be the hub for the Asian business and all administration was to be carried out from there. As planned, that office now processes invoices and sales contracts in conjunction with the legal and contract team in New York, and accepts payment from the Asian clients. There was no discussion with Mr Dhunna about any return to a job in London; and there was no job for him to return to there. He expected to move to Singapore in May 2010, just before his dismissal. On 22 April 2010, he e-mailed a shipping agent in relation to the transfer of his furniture and effects to Singapore. In the same month, Ms Mithal wrote both to Mr Dhunna and to Mr Boyd, who was also moving to Singpore, about residential properties there. The plan was for Mr Dhunna to stay in Dubai until 15 May 2010, return to London for two months and then go to Singapore in July/August 2010. On 20 May 2010, Ms Mithal updated Mr Dhunna, informing him that they were working on an employment contract for him when he was in Singaopore, that he would be part of the Singapore entity and would be paid in Singapore dollars.
17. EJ Sigsworth summarised (and, I understand, accepted) the evidence given by Ms Mithal about the structure of the CS business. CS Inc was incorporated in 2001 and CSL in 2002. CSL's purpose was to facilitate the exploitation of the European opportunities, which could be pursued more easily from London than New York. Glenn Reynolds and Peter Petas, respectively the CEO and COO of CS Inc, are the only two directors of CSL. CreditSights Asia Research PvT Limited was set up in early 2009 as a Delhi-based, wholly-owned subsidiary of CS Inc. It was intended to perform sales support, research support and junior analyst functions from a base of operations in India. Ms Mithal was its managing director and reported to Mr Petas. She had regular contact with New York but little with London. She understood the reasons for setting the Dubai office up as a branch or representative office, of CSL to be twofold. First, it was convenient for it to be such a branch or representative office, because the UK was in a closer time zone with the Middle East and Asia than the USA. Second, CreditSights had been considering carrying out a reorganisation of CS Inc for tax, regulatory and other reasons and it was thought that to have the Dubai office as a branch or representative office of CSL would make the reorganisation slightly less complicated. The CS Group as a whole was managed from New York. The financial results of both the Indian operation and CSL are consolidated with those of CS Inc. At the date of his dismissal, Mr Dhunna was responsible for running the Asian business, under Ms Mithal's line management: the London office dealt with European accounts, but not with any Asian accounts, which had all been transferred to Mr Dhunna.
18. EJ Sigsworth further found that upon his removal to Dubai, Mr Dhunna divested himself of all European accounts, which were thereafter dealt with exclusively by London; and he retained all the Asian accounts, with none being left in London when he went to Dubai. His biggest client, at least potentially, was Mubadala, with a potential half million dollar contract for consultancy services. The confidentiality agreement in relation to that transaction was signed by CS Inc, not CSL, and most of the people who worked on the contract were based in New York. The revenue generated on the contract was expected to go to New York. CSL never invoiced Mubadala.
19. In fact, Mr Dhunna never moved to Singapore. He was summarily dismissed on 26 May 2010 for alleged gross misconduct. Mr Petas and Mr Reynolds made the dismissal decision in New York, and Mr Good communicated it to Mr Dhunna. CSL and its staff and managers had no part in the dismissal decision.

EJ Sigsworth's decision

20. EJ Sigsworth considered the decision in Lawson and, in particular, Lord Hoffmann's guidance as to the factors material to whether an employment tribunal has jurisdiction to entertain an unfair dismissal claim brought by a former employee who was engaged to work abroad. Section 94(1) of the Employment Rights Act 1996 confers on employees a right not to be unfairly dismissed, and section 230(1) of the Act defines an employee as an individual 'who has entered into or works under (or, where the employment has ceased, worked under) a contract of employment.' The problem, however, is that the Act contains no geographic limitation, whereas it was common ground in Lawson, and the House of Lords held, that some territorial limitation into the jurisdiction of an employment tribunal must be implied. As Lord Hoffmann said, it was inconceivable that Parliament intended the Act to confer rights upon employees working in foreign countries and having no connection with Great Britain. Lord Hoffmann said, at [2006] ICR 250, 253D:

'1. … Putting the question in the traditional terms of the conflict of laws, what connection between Great Britain and the employment relationship is required to make section 94(1) the appropriate choice of law in deciding whether and in what circumstances an employee can complain that his dismissal was unfair? The answer to this question will also determine the question of jurisdiction, since the employment tribunal will have jurisdiction to decide upon the unfairness of the dismissal if (but only if) section 94(1) is the appropriate choice of law.'

21. After considering Lawson and other authorities, and summarising the parties' submissions, EJ Sigsworth's conclusions were as follows. I should set them out in full:

'12.1 … The general rule is that it is very unlikely that someone working abroad would be within the scope of section 94(1), even if working for an employer based in the United Kingdom. Something more than that UK connection is necessary. Thus, even though [Mr Dhunna] was technically (for administrative purposes) employed by [CSL], this was not sufficient. He has to be able to show that he was working in Dubai for the purposes of [CSL], in other words as a representative of a business conducted in the UK.

12.2 [Mr Dhunna] contends that the Dubai operation was a representative office of [CSL] and not a branch office conducting business abroad belonging to a British owner. He places substantial reliance on the paperwork generated in setting up the Dubai office. However, I regard this as inconclusive. "Branch" and "Representative Office" are terms used interchangeably. The laws of Dubai meant that there was a significant limitation on what the Dubai office could do and how it could operate. Thus, another office – London for convenience – had to carry out this role. I have to look behind the technical set up of the Dubai office and the reasons for it, to the commercial reality of the situation.

12.3 At the date of his dismissal, [Mr Dhunna] had relinquished all his European accounts (run from London) and was focusing entirely on Middle East, Asia and Africa, as the director of sales for those areas. He was line managed from Delhi, and had close links with that office and the management of employees based there. What is fundamental to this case is that [CSL] was only part of a worldwide business, which was ultimately run and managed by [CS Inc] in New York. The Dubai office and the Delhi office were part of the global operation, and had their own spheres of operation in the Middle East, Africa and Asia. [CSL] in London focused on Europe. [CS Inc] in New York focused on the United States. [Mr Dhunna] was not selling a product of [CSL] as their representative. He was selling a global product for the international business. He did not report to London because he was not within [CSL's] remit. He may have received assistance from specialist staff in London, but so did all sales staff wherever they were based.

12.4 [Mr Dhunna] was on [CSL's] to [sic] payroll only as a matter of administrative convenience, consistent with it being the parent of a branch office. He was paid in US dollars. He was not entitled to be in [CSL's] pension plan or under its health insurance scheme etc. Mr Adamson did not line manage [him], and only signed contractual documentation generated by the office because he was the only convenient authorised signatory. [Mr Dhunna] was in every sense that mattered part of the Asia operation, reporting to Ms Mithal in Delhi, line managing Delhi staff, and any revenue generated by him "counted" as part of the Asian business, not the business of [CSL]. The key Mubadala account – the confidentiality agreement was signed by [CS Inc], and [Mr Dhunna] worked with colleagues in New York to try and finalise he consultancy services contract.

12.5 As Ms Mithal said, the international business of CreditSights defined their business by where of [sic] the sales and clients were located. All revenue ultimately went to New York. Had [Mr Dhunna] not been dismissed he would undoubtedly have moved to Singapore from where a main office for the Asian business was to be established. He had effectively severed his links with the UK. In his own words to a colleague at the start of his period in Dubai, he had no intention of returning to the UK. There was no role for him to return to in any event. The decision to dismiss him was taken by [CS Inc] in New York. Thus, the circle was complete. [CS Inc] had set up the Dubai office, and they decided to close it, and [CS Inc] dismissed [Mr Dhunna]. [CSL] was not involved in these key decisions.

12.6 I therefore conclude that the Dubai office was not a representative office of [CSL's] UK Business …. [Mr Dhunna] was not working as a representative of [CSL] in Dubai. He was part of the Asian business of an international company, based in New York. He does not fall within the first class of ex-patriate employees identified by Lord Hoffmann in Lawson v. Serco. Further, he did not have strong connections with the UK and British employment law, such as would put him into the third, somewhat vaguely defined, category identified by Lord Hoffmann. The reality of the situation was that he had moved from the United Kingdom and severed his links with it. He was only on [CSL's] payroll and received administrative support from it as a matter of convenience. Such could equally well have been provided by New York, and would been provided by Singapore had [Mr Dhunna] moved there. Thus, the Tribunal has no territorial jurisdiction to hear the claims of unfair dismissal and breach of the right to be accompanied to a disciplinary hearing. …'

The decision of the EAT

22. It was agreed at the hearing of the appeal before the EAT, as before the ET, that the same territorial limitation applied both to the unfair dismissal claim and to the 'right to be accompanied' claim. By the time of that appeal there had, however, been the three further authorities on the territoriality question, to which I have referred in [3]. Slade J opened her judgment by summarising the facts, although not as fully as I have, and then summarised EJ Sigsworth's judgment, her summary also setting out his conclusions in full.
23. In expressing her conclusions, Slade J said that, despite the further authorities, 'the fundamental principles applicable to the issue have remained unchanged'. She said that it was 'the approach to the exceptions to the general rule that the right to claim unfair dismissal will only exceptionally cover employees who are working or based abroad which have been developed.' She described the general principles to be derived from the authorities as being: (i) the question of territorial scope is a question of statutory construction; (ii) Parliament regarded the standard, normal or paradigm case for the application of section 94(1) as the employee who was working in Great Britain; (iii) the general rule is that the place of employment is decisive in determining the territorial reach of section 94(1), but 'its open-ended language leaves room for some exceptions where the connection with Great Britain is sufficiently strong to show that this can be justified' (for which she cited Ravat, per Lord Hope of Craighead, at [27]); (iv) whether, on given facts, a case falls within the territorial scope of section 94(1) is a question of law; but whether the connection between the circumstances of the employment and Great Britain and its employment law was sufficiently strong is a question of fact and degree on which the decision of he primary fact-finder is entitled to considerable respect (for which she cited Lawson, per Lord Hoffmann at [34], and Ravat, per Lord Hope, at [35]).
24. Slade J referred to Lord Hoffmann's opinion in Lawson 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 even that would not be enough: something more would be required, and Lord Hoffmann gave non-exhaustive examples of when that 'more' might be satisfied. Baroness Hale of Richmond, in Duncombe, emphasised that Lord Hoffmann's examples were simply that, and Slade J cited from [8] of her judgment:

'It is therefore clear that the right will only exceptionally cover employees who are working or based abroad. The principle appears to be that the employment must have much stronger connections both with Great Britain and with British employment law than with any other system of law. There is no hard or fast rule and it is a mistake to try and to use the circumstances of one employment to make it fit one of the examples given, for they are merely examples of the general principle.'

25. Slade J derived from what Lady Hale said in Duncombe, and from what Lord Hope said in Ravat, at [28], that in order to decide whether, exceptionally, an employee who is working or is based abroad has a much stronger connection with Great Britain and with British employment law than with any other system of law, a comparative exercise is required. She said that this was further refined by Elias LJ in Bates van Winkelhof, who explained that in the case of the foreign-based employee who lived and/or worked at least part of the time in Great Britain such a comparative exercise was not necessary, since in such a case the territorial attraction was far from being all one way and the circumstances need not be truly exceptional before the connection with the system of law in Great Britain can be identified. In such a case, all that is required is that the tribunal should satisfy itself that the connection is, in Lord Hope's words, 'sufficiently strong to enable it to be said that Parliament would have regarded it as appropriate for the tribunal to deal with the claim'.
26. Slade J summarised as follows the principles to be applied when considering whether an employee who works and lives abroad falls within the territorial scope of section 94(1):

'(1) the overarching question is whether Parliament intended that … section 94(1) apply to a person in the circumstances of the Claimant;

(2) the general rule is that the place of employment is decisive; but

(3) where the employment has much stronger connections both with Great Britain and with British employment law than with any other system of law the Claimant will be within the scope of section 94(1) if the connection is sufficiently strong;

(4) the comparative exercise is appropriate where the Claimant is employed wholly abroad. As suggested in paragraph 98 of Bates van Winkelhof, the comparison is between Great Britain and the jurisdiction in which the Claimant works;

(5) the country in which the Claimant lives is relevant. If he lives as well as works abroad an especially strong connection with Great Britain and British employment law is required before an exception can be made for him;

(6) when the Claimant lives and/or works for at least part of the time in Great Britain, the comparison of connection with Great Britain and with the country in which he works is not required. All that is required is a sufficiently strong connection to enable it to be said that Parliament would have regarded it appropriate for an ET to deal with the Claimant's unfair dismissal claim.'

27. Slade J identified 'the cornerstone' of EJ Sigsworth's decision as being in the final sentence of paragraph 12.1 of his reasons: he there identified a criterion for meeting the jurisdiction hurdle which Mr Dhunna failed to surmount. Slade J also identified the fourth to sixth sentences of paragraph 12.6 as amounting to a second ground for his conclusion that Mr Dhunna did not have sufficiently strong connections such as to bring him within 'the third, somewhat vaguely defined, category identified by Lord Hoffmann.' She acknowledged that this ground for his decision was 'closer to the approach adopted in the authorities decided after Lawson to the issue of whether "truly expatriate" employees who not only work but live abroad are within the scope of section 94(1).' She continued:

'55. Lord Hope in Ravat considered such cases in paragraph 28 of the judgment. Paragraph 29 concerns the case of those who, like Mr Ravat, are not truly expatriates. In paragraph 28 Lord Hope referred to the comparative exercise of whether the connection of the employee with Great Britain was sufficiently strong to overcome the general rule that the place of the employment is decisive. An especially strong connection with Great Britain is required before an exception to the general rule can be made. As Elias LJ held in Bates van Winkelhof paragraph 98, the comparative exercise is appropriate where an employee, such as the Claimant, is employed wholly abroad. He observed that: "Some comparison and evaluation of the connections between the two systems will typically be required to demonstrate why the displacing factors set up a sufficiently strong counter-force".'

28. In criticism of EJ Sigsworth's decision, Slade J said he had not compared such connections as Mr Dhunna had with Great Britain and British employment law with the strength of his connections with Dubai to the extent 'now required' by the post-Lawson authorities. She added that she had considered whether, had he carried out such a comparison, he would anyway have come to the same conclusion. She accepted that many of the facts that he had found supported the conclusion that Mr Dhunna was not within the territorial scope of section 94(1), but she continued:

'56. … However, the question of the relative strength of connection of an expatriate employee with Great Britain and with the country in which he works and, if the connection with Great Britain is the greater, whether it is sufficient to bring the Claimant within the territorial scope of section 94(1) is one of degree. Whilst respect must be paid to the fact finding Tribunal, in this case the EJ viewed the facts in the light of the guidance in [Lawson]. The guidance has been developed in subsequent authorities. In my judgment it cannot be said with the degree of confidence required to uphold the decision of the EJ, that the outcome would be the same notwithstanding that the test to be applied in determining whether the Claimant is within the territorial scope of section 94(1) requires a different enquiry than that which was undertaken by him. Further findings of fact may be necessary and a different emphasis may be given to the relevant facts.'

29. The outcome was that Slade J allowed Mr Dhunna's appeal against EJ Sigsworth's decision on his unfair dismissal and 'right to be accompanied' claims and remitted them for a re-hearing before a differently constituted ET.

The appeal

30. Before coming to the arguments, I shall refer to the authorities. The difficulty they address is Parliament's omission to provide explicit guidance in the Employments Rights Act 1996 as to the territorial scope of section 94(1). In Lawson, Lord Hoffmann (with whose speech all the other members of the House, including Lady Hale, agreed) said, at [34], that the question of whether, on given facts, a case falls within its territorial scope is one of law; but that, on the other hand, 'it is a question of degree on which the decision of the primary fact-finder is entitled to considerable respect.' Lord Hoffmann continued, materially:

'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. … 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 a 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). …

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. …

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 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. …'

31. In Duncombe, Lady Hale delivered the judgment of the Supreme Court. She opened by referring to Lawson as laying down the basic principle, referred at [6] to the three types of case to which Lord Hoffmann had referred in [38] to [40] of his judgment, and continued:

'8. It is therefore clear that the right [to claim for unfair dismissal under section 94(1)] will only exceptionally cover employees who are working or based abroad. The principle appears to be that the employment must have much stronger connections both with Great Britain and with British employment law than with any other system of law. There is no hard and fast rule and it is a mistake to try and torture the circumstances of one employment to make it fit one of the examples given, for they are merely examples of the application of the general principle.'

32. In Ravat, Lord Hope delivered the judgment of the Supreme Court (which included Lady Hale). He said:

'27. Mr Cavanagh [leading counsel for the appellant employer] drew attention to Lord Hoffmann's comment in [Lawson], para 37, that the fact that the relationship was "rooted and forged" in Great Britain because the employee happened to be British and he was recruited in Great Britain by a British company ought not to be sufficient in itself to take the case out of the general rule. Those factors will never be unimportant, but I agree that the starting point needs to be more precisely identified. It is that the employment relationship must have a stronger connection with Great Britain than with the foreign country where the employee works. The general rule is that the place of employment is decisive. But it is not an absolute rule. The open-ended language of section 94(1) leaves room for some exceptions where the connection with Great Britain is sufficiently strong to show that this can be justified. The case of the peripatetic employee who was based in Great Britain is just one example. The expatriate employee, all of whose services were performed abroad but who had nevertheless very close connections with Great Britain because of the nature and circumstances of employment, is another.

28. The reason why an exception can be made in those cases is that the connection between Great Britain and the employment relationship is sufficiently strong to enable it to be presumed that, although they were working abroad, Parliament must have intended that section 94(1) should apply to them. The expatriate cases that Lord Hoffmann identified as falling within its scope were referred to by him as exceptional cases: para 36. This was because, as he said in para 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. It will always be a question of fact and degree as to whether the connection is sufficiently strong to overcome the general rule that the place of the employment is decisive. The case of those who are truly expatriate because they not only work but also live outside Great Britain requires an especially strong connection with Great Britain and British employment law before an exception can be made for them.

29. But it does not follow that the connection that must be shown in the case of those who are not truly expatriate, because they were not both working and living overseas, must achieve the high standard that would enable one to say that their case was exceptional. The question whether, on given facts, a case falls within the scope of section 94(1) is a question of law, but it is also one of degree. The fact that the commuter has his home in Great Britain, with all the consequences that flow from this for the terms and conditions of his employment, makes the burden in his case of showing that there was a sufficient connection less onerous. Mr Cavanagh said that a rigorous standard should be applied, but I would not express the test in those terms. The question of law is whether section 94(1) applies to this particular employment. The question of fact is whether the connection between the circumstances of the employment and Great Britain and with British employment law was sufficiently strong to enable it to be said that it would be appropriate for the employer to have a claim for unfair dismissal in Great Britain.'

33. In Bates van Winkelhof, Elias LJ (in a judgment with which Richards and Lloyd LJJ agreed) said, at [90], that Duncombe emphasised the broader principle underlying the concept of jurisdiction and that Lord Hoffmann's examples were just that, namely practical examples. Elias LJ also said that Ravat marked a similar distancing from too rigorous an emphasis on the specific examples given by Lord Hoffmann in favour of the adoption of a broader test. The critical paragraphs in Elias LJ's judgment are these:

'96. The appellants contend that each of the employment tribunal and the Employment Appeal Tribunal erred in their approach to the question of jurisdiction. It is submitted that in the light of Lord Hope DPSC's judgment it was incumbent on the tribunal to carry out a comparative exercise in which the factors which pointed towards a connection with Great Britain were compared with the factors pointing in favour of another jurisdiction, in this case Tanzania. It was only if the former plainly outweighed the latter that the tribunal should exercise jurisdiction.

97. In this case, submits Mr Stafford, the comparison was simply not made and the case should be remitted to the employment tribunal. This is not a case where the answer is so obvious that we would be entitled to reach our own conclusion on the matter one way or the other. There are further findings that the tribunal would have to make before the jurisdiction issue could be properly determined.

98. I do not accept this submission. The comparative exercise will be appropriate where the applicant is employed wholly abroad. There is then a strong connection with that other jurisdiction and Parliament can be assumed to have intended that in the usual case that jurisdiction, rather than Great Britain, should provide the appropriate system of law. In those circumstances it is necessary to identify factors which are sufficiently powerful to displace the territorial pull of the place of work, and some comparison and evaluation of the connections between the two systems will typically be required to demonstrate why the displacing factors set up a sufficiently strong counter-force. However, as para 29 of Lord Hope DPSC's judgment makes plain, that is not necessary where the applicant lives and/or works for at least part of the time in Great Britain, as is the case here. The territorial attraction is then far from being all one way and the circumstances need not be truly exceptional before the connection with the system of law in Great Britain can be identified. All that is required is that the tribunal should satisfy itself that the connection is, to use Lord Hope DPSC's words: "sufficiently strong to enable it to be said that the Parliament would have regarded it as appropriate for the tribunal to deal with the claim."

99. I agree with the claimant that, showing remarkable prescience, this is in essence the question posed by the employment judge here. She asked whether there were "strong connections with Great Britain such that the tribunal has jurisdiction to hear the [complaints]". Even if, contrary to my view, the question was not quite appropriately framed, Judge Peter Clark was plainly entitled to conclude, as did Lord Hope DPSC in the different circumstances in the Ravat case, that had she asked the right question she would necessarily have come to the same conclusion.'

34. Finally, I refer to the decision of the EAT (Langstaff J, the President) in Powell v. OMV Exploration & Production Ltd [2014] ICR 63, in which, after referring to Lord Hope's judgment in Ravat, the President said:

'47. This test is one of sufficiently strong connection. …

51. The starting point which must not be forgotten in applying the substantial connection test is that the statute will have no application to work outside the United Kingdom. Parliament would not have intended that unless there were a sufficiently strong connection. "Sufficiently" has to be understood as sufficient to displace that which would otherwise be the position.'

35. In support of the primary ground of Creditsights' appeal, namely that Slade J was wrong to hold that EJ Sigsworth had misdirected himself in law as to the approach he was required to adopt, Mr Stafford of course recognised that EJ Sigsworth did not have the benefit of a reference to the judgments in Duncombe, Ravat, Bates van Winkelhof or Powell. He simply focussed on Lawson, but Mr Stafford pointed out that it is not suggested that he did not correctly apply the guidance that Lawson identified. The essence of Lawson, as of the later authorities, is that the right to claim under section 94(1) will only exceptionally apply to employees working or based abroad; and in order for a case to be so exceptional, it is necessary for any such employee to show 'strong' connections with Great Britain and British employment law such as to displace the general rule that Parliament did not intend to extend section 94(1) to employees working or based abroad. In Duncombe, the requirement is described as one showing 'much stronger connections', and in Ravat the phrase becomes 'sufficiently strong'. Mr Stafford acknowledged that EJ Sigsworth did not use the phase 'sufficiently strong' but said that his conclusions in paragraph 12, in particular 12.6, ('… he did not have strong connections with the UK and British employment law such as to put him into the third, somewhat vaguely defined, category specified by Lord Hoffmann') showed that he had applied the right test reflected in the authorities. Elias LJ in Bates van Winkelhof, at [99], was satisfied that the employment judge in that case had asked herself what was in essence the right question by asking whether there were 'strong connections with Great Britain such that the tribunal has jurisdiction to hear the case', which was essentially the same question that EJ Sigsworth asked himself.
36. As to Slade J's conclusion that EJ Sigsworth's error lay in his omission to make a comparison of the 'connections [with Great Britain and British employment law] with the strength of the connections [Mr Dhunna] had with Dubai to the extent now required by the authorities decided since [Lawson]', Mr Stafford submitted that this failed to recognise that EJ Sigsworth's full and careful analysis of the facts was materially devoted to a continuing assessment of the strength of the competing connections with the different jurisdictions in play (Great Britain, Dubai, New York and India) and enabled the judge then to provide his relatively succinct conclusions in paragraph 12. The inference from Slade J's judgment was, said Mr Stafford, that she appeared to consider that the comparative exercise must be carried out in some rather more formulaic manner. Mr Stafford submitted that that was wrong, and that EJ Sigsworth could not be faulted for not having made a proper comparison.
37. In support of Slade J's decision, Mr O'Neill submitted that it was clear that the ET had made an error of law. He said the critical comparison that is required in cases such as the present is one between the system of employment legislation available in Great Britain and that available in the jurisdiction where the claimant employee was working at the time of his dismissal; and that the purpose of such inquiry is to determine which is the better system of law. No such inquiry was carried out in the present case, whereas it should have been. Mr O'Neill said that such an inquiry might have revealed that there was no employment legislation in Dubai equivalent to that available in Great Britain, or that it would anyway have shown that CSL did not even have a presence in Dubai that would have enabled Mr Dhunna to sue it there. The case had, therefore, to be remitted to the ET in order for the right comparative exercise to be performed.
38. Whilst Lord Hoffmann in Lawson had referred at [1] to the question raised by the case as being one as to a choice of law, Mr O'Neill accepted, as I followed it, that Lord Hoffmann did not identify the relevant exercise as requiring a comparison between competing systems of law: on the contrary, he said expressly, at [36], that he would 'not wish to burden tribunals with inquiry into the systems of labour law of other countries', whereas Mr O'Neill's submission was that such an inquiry is an essential part of what he said is the applicable comparative exercise. Mr O'Neill submitted, however, that support for his submission is to be found in [8] of Lady Hale's judgment in Duncombe and, in particular, in [14] to [16] and [27] of Lord Hope's judgment in Ravat. If Mr O'Neill is correct in his submission, there is no doubt that the ET did not carry out the right comparison. The error he asserted was not, however, one that Slade J appears to have identified. Mr O'Neill submitted further that this was a case in which there were obvious connections between Mr Dhunna and Great Britain and its employment law: Mr Dhunna is a British Citizen, CSL is a company incorporated in England and Wales, and Mr Dhunna was employed under a contract with CSL governed by English law and he formerly worked under that contract in this jurisdiction.

Discussion and conclusion

39. Mr O'Neill's submission as to the critical comparative exercise that the ET should have performed was not only unheralded by any written skeleton argument, it was positively at variance with the written argument that had been prepared on behalf of Mr Dhunna by Mr Wright, which, at paragraphs 21 and 22, expressly rejected any suggestion that what is required in a case such as the present is a comparison of the merits of the local employment law of the employee's workplace at the time of his dismissal with that of the employment law applicable in Great Britain.
40. That does not, by itself, mean that Mr O'Neill's submission is incorrect, but I have no hesitation in holding that it is and I would respectfully reject it. There is certainly no support in Lawson for the making of such a comparison. Nor would I accept that Lady Hale's words in [8] of her judgment in Duncombe provide any support for it. What she was there identifying was the principle, established in Lawson, to which she had been a party, that the general rule is that an employee who is working or based abroad at the time of his dismissal will not be within the territorial jurisdiction of section 94(1), but that exceptionally he may be if he has 'much stronger connections both with Great Britain and with British employment law than with any other system of law.' The relative merits of any competing systems of law have, however, no part in the inquiry to which Lady Hale was referring. Why should they? The object of the exercise is not to decide which system of law is more or less favourable to the employee: it cannot realistically have been Parliament's intention that the 'general rule' in relation to expatriate employees should be regarded as ousted in any case in which the local employment law is less favourable to the employee than British employment law. The object of the exercise is simply to decide whether an employee is able to except himself from the general rule by demonstrating that he has sufficiently strong connections with Great Britain and British employment law.
41. Mr O'Neill also relied on what Lord Hope said in [14] to [16] and [27] of Ravat. I have not cited [14] to [16] from Ravat, but they are there to be read by any interested reader. I propose to say no more than that I can extract nothing from them that provides any support for Mr O'Neill's submission. Nor does [27] of Lord Hope's judgment. If there were any foundation for the submission that a critical part of the inquiry required in cases such as these is as to the relative merits of the competing, or potentially competing, systems of labour law, it is quite extraordinary that no express supporting statement for it can be found anywhere in the authorities. The reason, however, that there is none is that the submission is wrong. The authorities make it clear that the general rule is that someone in Mr Dhunna's position is, upon dismissal, excluded from any right to claim under section 94(1) of the Employment Rights Act 1996. If he wishes to show that, exceptionally, his case is not caught by that general rule, but that he is within the territorial jurisdiction of section 94(1), he must be able to show that his employment relationship has a sufficiently strong connection with Great Britain and British employment law such that it can be presumed that Parliament must have intended that section 94(1) should apply to him. Proof of such a connection is not established by making a comparison of the relevant merits of British and any competing system of labour law. I would therefore reject Mr O'Neill's submission in support of Slade J's decision (but not her reasons) for remitting this case for a re-hearing by the ET.
42. All that remains is to consider Mr Stafford's submission that Slade J was wrong to hold that EJ Sigsworth had failed to carry out a sufficient comparative exercise in deciding that Mr Dhunna's case was governed by the general rule and that he had not demonstrated that there was a sufficiently strong connection between his employment relationship and Great Britain and British employment law to take the case out of that rule. I did not understand Mr O'Neill to level any direct response to that submission over and above that which was implicit in his 'comparative labour law merits' submission.
43. I would accept Mr Stafford's submission, essentially for the reasons he advanced as summarised in [35] and [36] above. The fact that Mr Dhunna was engaged under an English contract of employment by a company incorporated in England and Wales might be thought to be a compelling factor in his favour. But it is not; Lord Hoffmann made it clear in Lawson, at [27], that what counts is whether or not the employee was working in Great Britain at the time of his dismissal, rather than what was contemplated when his employment contract was made, and EJ Sigsworth would not have overlooked that. Whilst I recognise that EJ Sigsworth did not formally explain that he was carrying out any comparative exercise, I agree with Mr Stafford that his reasons reflected a full, careful and sufficient assessment of the facts so far as they related to the competing pulls of the different jurisdictions in play such as to enable him to carry out the required evaluation of whether or not Mr Dhunna had established a sufficiently strong connection with Great Britain and British employment law to except himself from the general rule. In substance, he carried out a sufficient comparative exercise. It is true that he did not expressly ask himself whether the connection was 'sufficiently strong' but, in paragraph 12.6, he did ask himself whether Mr Dhunna had 'strong connections' with the UK and British employment law such as to put him in Lord Hoffmann's third category, and the substantive sense of that question was therefore whether Mr Dhunna had sufficiently strong such connections. EJ Sigsworth concluded that he did not and his decision in that respect is entitled to the fullest respect.
44. I therefore respectfully disagree with Slade J that the case needs to be remitted for a re-hearing for the purpose of the carrying out of another comparative exercise. EJ Sigsworth carried out the duty with which he was charged, he did so carefully and conscientiously, he found the facts that he was required to find and he gave full and cogent reasons for his conclusion. There was no assertion before us that any of his findings of fact were ones that it was not open to him to make. There is no justification for any re-hearing.
45. I would allow CSL's appeal, set aside the order in the third paragraph of the EAT's order of 5 April 2013 and restore the judgment in paragraph (i) of the ET's judgment sent to the parties on 20 September 2011.

Lord Justice Floyd :

46. I agree.

Lady Justice Macur :

47. I also agree.