United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR S LAKHA (of Counsel) Messrs D Gouldman & Co. Solicitors 384 City Road London EC1V 2QA


 


JUDGE PETER CLARK: The issue in this appeal is whether the Appellant, Mr Vass ordinarily worked outside Great Britain within the meaning of s.196(2) of Employment Rights Act 1996. If so, the Stratford Employment Tribunal Chairman correctly found that the Tribunal had no jurisdiction to entertain his complaints of unfair dismissal and unauthorised deductions from wages brought against the Respondents.

The facts are that in January 1991 the Appellant commenced employment with the First Respondent Deutsche Bank AG in Frankfurt. In 1995 the possibility of his working in London for a subsidiary of the First Respondent arose. He agreed to that move by signing a letter from the First Respondent dated 24 November 1995. That letter as translated reads as far as is material:

"Dear Mr Vass

We refer to the discussions we have held with you and confirm to you herewith that, subject to the granting of a work and residence permit, you will take up the employment discussed with you in the Information Technology Department at the Deutsche Bank AG, London. Your assignment is anticipated for a period of 3 years, i.e. until 31st December 1998.

...........

4. We would like to confirm to you that on expiration of your employment with the Deutsche Bank AG London, we will continue to employ you within the Deutsche Bank AG in another place. We reserve also reserve the right to offer you alternative positions within the Deutsche Bank Group. However, this commitment, which is valid until 31st December 1998, does not apply if you leave the Deutsche Bank AG London because you yourself have handed in your notice or for reasons which would justify the Deutsche Bank AG in giving you notice.

5. We reserve the right to recall you to this country at any time or to assign you to another post abroad. In this case we would, of course, hold a personal interview with you in good time before hand."

The letter goes on to state that he would be paid a gross salary of £75,000 per annum in London and arrangements were made for him to be free from tax liability in Germany for which purpose it was necessary for him to relinquish all places of residence there. He was also to receive £400 per week in relation to the cost of accommodation in London.

From 1 April 1996 the subsidiary by which he was to be employed in London then became Deutsche Morgan Grenfell (UK) Ltd.

The Appellant was informed of this change by a letter from the Second Respondent dated 25 March 1996, and from the First Respondent dated 27 March 1996, which read in translation so far as is material:

"1. As Deutsche Morgan Grenfell (UK) Ltd is a subsidiary company, your existing contract of employment with the Deutsche Bank AG will remain during the time of your assignment to Deutsche Morgan Grenfell (UK) Ltd.

3. We would like to confirm to you that on expiration of your employment with Deutsche Morgan Grenfell (UK) Ltd we will continue to employ you within the Deutsche Bank AG in another place. We also reserve the right to offer you alternative positions within the Deutsche Bank Group. ......"

The Appellant continued to work in London until his resignation in circumstances which he alleged amounted to constructive dismissal on 15 March 1997.

The Tribunal Chairman concluded that the Appellant was on temporary assignment to Great Britain having completed four years service in Germany. He would, at the end of the three year assignment, have returned to Germany. Looking at the contract as a whole, and applying the principles in Janata Bank v Ahmed [1981] ICR 791, he found that the Appellant ordinarily worked outside Great Britain and dismissed the complaint for want of jurisdiction.

In this appeal, Mr Lakha takes a number of points in his notice of appeal, but recognises that in order for this matter to proceed to a full appeal hearing, we must be satisfied that there is an arguable case on his construction of the document dated 24 November 1995 referred to below as the Secondment Agreement.

He accepts as he is bound to do, the principles enunciated by the Court of Appeal in Janata and in particular, those appearing from the judgment of Lord Justice Donaldson, which are set out by the Chairman in paragraph 11 of his Extended Reasons. In that case Lord Justice Donaldson said:

"The consecutive posting situation has, of course, to be distinguished from the case where an employee is appointed to a new position involving a significant variation in his contract of employment, as a result of which he is required to work in one particular country unless and until that contract is further varied. In such a case that will be the place and the only place at which he ordinarily works under this contract of employment."

His Lordship went on to say, the Appeal Tribunal erred in attaching any significance to the fact that at the time of the dismissal, if such it was, Mr Ahmed, the employee was based in London. This is merely a glimpse of the blindingly obvious, he had been posted to London and as long as he worked there, he was not only based in London, but he ordinarily worked in London. What the Appeal Tribunal should have been considering was not Mr Ahmed's period of service in London, but his whole service under his contract of employment, both past and future assuming no premature determination.

Applying those principles, Mr Lakha submits that there was here a significant variation of the contract by the letter of 24 November 1995. We accept there was a variation to the extent that the original contract contained no mobility clause and therefore under that contract the employer had no contractual right to transfer the Appellant out of Frankfurt. But we think the effect of the 24 November 1995 agreement was that the parties agreed that for a period of up to three years, the Appellant would be assigned to work in the London branch of the Bank; at the end of that period, he could be transferred to another place and that at any time, by virtue of clause 5 of the Secondment Agreement, he could be recalled to Germany or assigned to another post abroad, that is other than in England.

That we think brings this case firmly on the Ahmed side of the line. Had the contract been varied to allow for an open-ended period of working in London that would have been a significant variation of the type referred to by Lord Justice Donaldson, because in order to move the Appellant again, it would be necessary for the parties to agree a further variation to the contract. However the Secondment Agreement itself makes provision as to what will happen at the end of the three year period and indeed and we think very significantly, reserves the right to the Bank to move the Appellant at any time within that three year period.

In these circumstances, looking at the whole of the service under the contract of employment, both past and future and disregarding its premature determination by the Appellant's resignation, we have no hesitation in finding that the Chairman was entitled to conclude that the Appellant ordinarily worked outside Great Britain for the purposes of s.196(2) of the Act and accordingly to find that the Tribunal had no jurisdiction in this matter. The appeal is dismissed.