United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellants	MR N D HART (Solicitor) Messrs Slee Blackwell Solicitors 10 Cross Street Barnstaple Devon EX31 1BA
For the Respondent	MS J CALLEUX (Employment Law Consultant) Employease Britannia House 4-24 Britannia Street London WC1X 9JD


 


JUDGE PETER CLARK: This is an appeal by Asahi Diamond Industrial Co. UK Limited ['the English company'] against a decision of an Employment Tribunal chaired by Mr I A Edwards, sitting at Brighton on 2nd December 1998, on a preliminary issue raised in the complaint of Monsieur Francois Barrier, presented to the Southampton Employment Tribunal on 1st October 1998 against the English company alleging breach of contract, unfair dismissal and unauthorised deductions from wages. That decision was promulgated with extended reasons on 9th December 1998.

1. In that complaint Monsieur Barrier contended that he commenced employment with Asahi Diamond Industrial Europe SA ['the French company'], a sister company of the English company, on 6th September 1993 and that from August 1994 he entered into a parallel contract of employment with the English company, whereby he worked for the English company for two days per week in England, and under the contract with the French company for three days per week in France. Those arrangements continued until July 1998 when his employment with both companies was effectively terminated.
2. The preliminary point taken before the Employment Tribunal by the English company in its Notice of Appearance was that the applicant was never employed by the English company and further that he ordinarily worked outside Great Britain, so that the tribunal had no jurisdiction, by virtue of s.196(2) of the Employment Rights Act 1996, to entertain his complaints of unfair dismissal, his right to minimum periods of notice and unauthorised deductions from wages.

S.196(2) provides:

"The provisions to which this subsection applies do not apply to employment where under the employee's contract of employment he ordinarily works outside Great Britain."

3. The tribunal made the following material findings of fact. The applicant commenced employment with the French company in 1993. He was based in Chartres. The French company is part of a Japanese group of companies, which includes the English company, producing industrial diamond cutters.
4. During the early part of his employment with the French company the applicant made occasional visits to the English company's premises in Crawley for audit purposes.
5. On 15th September 1995 the applicant was offered a position in England. By a letter of that date from Joel Rose, President of the French company, it was confirmed, following an earlier conversation that:

"During your stay in England as Financial Manager of Asahi UK [the English company] as well as "controller" of Asahi Europe [the French company], Asahi UK will pay for your housing and for a car."

6. Following that letter the English company paid him a salary of £300 per month, later rising to £800 per month, together with the rent of a house in England, where he was joined by his wife and daughter and a car, something which was not provided by the French company, and his travel between England and France and the provision of a car from the airport to the French company's premises at Chartres was also paid by the English company. He spent two days a week working in Crawley and three days per week in Chartres. These arrangements continued until July 1998, when the French company terminated his employment with them. He was not then required any further by the English company.
7. On those facts the tribunal accepted the applicant's contention that he was employed under parallel contracts both with the French company and the English company. They rejected the respondent's argument that he was seconded to the English company under the auspices of his contract with the French company. His salary paid by the English company was paid into his bank account in England. He was shown as part of the English company's management structure on its organisational chart.
8. In relation to the question of jurisdiction raised by s. 196(2) the tribunal observe at paragraph 22 of their reasons that it was conceded on behalf of the respondent that the real issue was whether the applicant was working separately under a contract with the English company. Mr Hart, today, does not accept that that concession was made by him below, but for the reasons which we shall shortly give, we think that the real issue in the case was whether or not he was employed under separate contracts. The tribunal took the view that s.196(2) would be irrelevant if, as turned out to be the case, the tribunal accepted that there were indeed parallel contracts of employment with the French and English companies respectively. We infer that what the tribunal there meant was that if the relevant contract for the purposes of s.196(2) was a contract with the English company for two days work per week to be performed solely in Crawley, then no question of him ordinarily working outside Great Britain under that contract arose. The position may be different if he was employed under a single contract with the French company involving his working partly in France and partly in England.
9. Having determined that the applicant was employed under two separate parallel contracts with each of the Group companies, the tribunal directed that the matter should proceed to a merits hearing. For completeness we should add that by subsequent decisions a different tribunal sitting at Brighton upheld his complaints and made awards of compensation in his favour against the English company.
10. Against the decision of 9th December 1998 the English company appealed. At a preliminary hearing held before a division presided over by Judge Byrt QC on 15th April 1999, that part of the appeal which challenged the tribunal's finding that the applicant was employed under two separate contracts of employment by the French and English companies as a perverse finding was dismissed. However, the appeal was permitted to proceed to this full hearing on the single issue as to whether the tribunal misdirected itself as to the test under s.196(2). It was submitted that the question for the tribunal was not simply whether the applicant was employed under a separate contract of employment in England, but where the applicant ordinarily worked. It was argued that the applicant ordinarily worked in France in circumstances where he spent three days per week working there and two days in England.
11. Leave to amend the Notice of Appeal was granted to develop that single point.
12. We say at once that, on the facts of this case, once the respondent's appeal against the finding that the applicant was employed under a separate contract of employment with the English company, requiring him to work under that contract solely within Great Britain, albeit for only two days per week was dismissed, the appeal on the further point taken was and is unsustainable.
13. Mr Hart has argued, accepting as he must the tribunal's finding as to the separate contracts, that it was open to the Employment Tribunal to find that under the English contract the applicant was required to work for three days per week in France. He relies particularly on the tribunal's finding at paragraph 14 of the reasons, that the applicant was supplied with a car from the airport in France to the head office of the French company at Chartres.
14. We reject that submission. It comes as no surprise that as a matter of internal accounting the English company within a group of companies may pay for transport in France, rather than the French company. That is as far as that point takes us.
15. What we are quite satisfied about is that this case is unusual when compared with the earlier authorities, in particular, the most recent statement of the law on this topic by the Court of Appeal in Carver v Saudi Arabian Airlines [1999] IRLR 370, and that in the earlier cases, including Wilson v Maynard Shipbuilding Consultants AB [1977] IRLR 491 and Janata Bank v Ahmed [1981] IRLR 457. In each case the applicant was employed under a single contract of employment which required him to work both within and outside the jurisdiction. In Carver the applicant was a flight attendant employed by Saudi Arabian Airlines who regularly undertook flights from and to Heathrow between London and Saudi Arabia. The question there for the Court was where under that single contract of employment the applicant ordinarily worked.
16. No such problem arises in the present case. The only contract of employment relevant for the purpose of s.196(2), on the tribunal's findings, was the contract with the English company. That simply required the applicant to work two days per week in Crawley. There was no requirement at all under the contract with the English company for him to work abroad, that requirement arose solely under the contract with the French company.
17. This is a complaint brought solely against the English company and not the French company. In these circumstances, we are quite satisfied that the Employment Tribunal was correct and we shall dismiss this appeal.