United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR R DAVISON (of Counsel) Instructed by: Mr T P Fagg Messrs Kingsford Flower & Pain Solicitors 2 Elwick Road Ashford Kent TN23 1PD
For the Respondents	MR A LOCK (Employed Barrister) Instructed by: Messrs Beachcroft Wansboroughs Solicitors 10-22 Victoria Street Bristol BS99 7UD


 


JUDGE COLIN SMITH QC: This is an appeal by the employee before the Employment Tribunal, Mr Cosgrove, against the decision of the Employment Tribunal held at London (South) on 16th April 1999 of which extended reasons were sent to the parties on 29th April 1999 whereby the Employment Tribunal held that the appellant ordinarily works outside of Great Britain, as they put it, so that he did not have a right not to be unfairly dismissed.

1. We have had the benefit of very helpful concise submissions on both sides. The appeal turns on the proper meaning to be given to the expression 'ordinarily works outside Great Britain' in section 196(2) of the Employment Rights Act 1996, which is in these terms:

"(2) 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."

2. We were helpfully told by Counsel for the appellant, Mr Davison, that that provision has now been repealed and therefore the appeal deals with matters which are not likely to arise in the future.
3. However, we of course have to reach a conclusion as to whether the Employment Tribunal followed the correct course in relation to interpretation of section 196(2) having regard to the authorities in the Court of Appeal by which we are bound and of course the Employment Tribunal was equally bound.
4. Before we deal with the submissions made to us on the appeal, we should summarise the Employment Tribunal's decision. It is only a summary, and full reference should be made to the decision for the full terms of the decision. As appears from the decision and the facts found by the Employment Tribunal the appellant, who is a United Kingdom national and resident, living in Kent, had worked for the respondents, BICC Cables Limited, a United Kingdom company, based at Erith in Kent, with its headquarters there, as an overseas cable jointer and fitter, from 1974 until his summary dismissal on 30th July 1998 arising from an allegation that he had been guilty of gross misconduct after a disciplinary hearing held at Erith.
5. The appellant brought proceedings for unfair dismissal by his Originating Application presented on 27th October 1998 and the respondents, in addition to claiming that the dismissal was fair, took the point that by virtue of section 196(2) of the 1996 Act he did not have the right not to be unfairly dismissed.
6. The Employment Tribunal concluded that the appellant's contract of employment conclusively established that the appellant did not have the right not to be unfairly dismissed. They expressed themselves in the following way at paragraph 8 of the decision:

"8. Having listened to the evidence and considered the documentation we conclude that the contract of employment is conclusive as to where the Applicant ordinarily works. The terms and conditions clearly state that they relate to Overseas Cable Jointers and Cable fitters and proposed that "Overseas Cable Jointers and Cable Fitters are employed primarily to work outside the United Kingdom", and that is what the contract states and in fact that is actually what happened in the Applicant's case. In our view the contract of employment is conclusive and therefore it is not necessary for the Tribunal to apply "the base" test. Having so found, we find that the Applicant does not by virtue of section 196(2) of the Employment Rights Act 1996 have the right not to be unfairly dismissed. His application is therefore dismissed and can proceed no further."

7. The submission is made to us by Mr Davison that in so concluding they unfortunately erred in law in failing to answer, as part of the contract test, the key question that arose, according to his submission, in this particular case, namely where according to the appellant's contract was Mr Cosgrove based. It is Mr Davisons's submission that in the light of the Court of Appeal decisions, particularly Wilson v Maynard Shipbuilding Consultants AB [1977] IRLR 491, as applied in the recent Court of Appeal decision of Carver v Saudi Arabian Airlines [1999] IRLR 370 CA, the Employment Tribunal failed properly to define what was meant by the statutory expression 'ordinarily works outside Great Britain' in the context of an employee who worked on successive tours of duty overseas. They should have asked themselves, looking at the whole period contemplated by the contract and the terms of the contract itself, where was the appellant based. Instead, they wrongly decided, according to his submission, that because under the terms of the contract it was provided that the appellant was employed 'primarily' to work outside of the United Kingdom, such provision conclusively established that he 'ordinarily' worked outside Great Britain. Mr Davison submitted that it by no means follows as a matter of law that because an employee is employed to work mainly outside Great Britain that he ordinarily works outside Great Britain, because the Court of Appeal decisions show that where an employee is required under the terms of his contract to spend periods abroad by way of a succession of overseas postings, the test is where he 'ordinarily' works under the contract as a whole, and thus it is necessary to examine where the employee is 'based' in order to determine whether he ordinarily works outside Great Britain. Mr Davison further submitted that once the proper question is asked in this particular case it is beyond argument, looking at the contract here, that the appellant was based in Erith in Kent and so that was where he ordinarily worked. This is clear from the terms of the contract which required him to be part of the Projects Unit based at Erith from which he was to be available to travel on 24 hours notice to overseas tours of duty as directed. Between such tours he was required to work in the United Kingdom, or to train in the United Kingdom, or to be on standby in the United Kingdom, until sent off again on another tour of duty. He was paid in sterling in a United Kingdom bank account and was subject to grievance and disciplinary procedure at Erith. For all those reasons, Mr Davison submitted, it is clear from the contract that the appellant as a matter of law had his base in Erith, so that he did not ordinarily work outside Great Britain. Reliance was also placed by Mr Davison on the fact that, over a period of some five years, approximately, although he had spent about 1,228 days overseas the appellant had also spent 778 days in total in the United Kingdom. The submission was made accordingly that the Employment Tribunal erred in finding that the contract of employment was conclusive since they misconstrued the contract in the light of the authorities and equated the word 'primarily' with the word 'ordinarily', which is not permissible.
8. Mr Lock submitted, on the contrary, that as a matter of common sense, looking at the natural and ordinary meaning of the word 'primarily' it was legitimate for the Employment Tribunal to conclude that that term in the contract was conclusive of the matter and it was correct in law for the Employment Tribunal to conclude that in the circumstances here the contract was conclusive and decisive having regard to the way in which that particular term was drafted in the contract. He submits, additionally, that if the Employment Tribunal have misconstrued the contract contrary to the authorities in the Court of Appeal, then it is not a case where the position is so clear that the Employment Appeal Tribunal should substitute its own decision but rather it is a case where it is necessary for the matter to be remitted to the Employment Tribunal for a fresh hearing in order to re-examine the contract and what in fact has happened over the years in order to determine where the appellant's base was and that is a matter which is not so clear from the contract itself as to enable the Employment Appeal Tribunal properly to substitute its own decision for that of the Employment Tribunal.
9. Those were, in a nutshell, the rival submissions.
10. Having considered the submissions made to us and also the Court of Appeal authorities binding upon us, we can express our conclusions as follows. In our judgment the proper approach to section 196(2) of the 1996 Act, and in particular the wording in that subsection "where under the employee's contract of employment he ordinarily works outside Great Britain" is settled by the decision in Carver in favour of the contract test. That test obliges the tribunal to consider the position as it appeared at the date of the contract, looking at the whole period covered by the contract rather than what actually happened during the employment. However, in our judgment, it is equally clear, particularly from the judgment of Megaw LJ in the case of Wilson, as expressly followed and approved in the case of Carver, that the purpose of looking at the contract, in a case of this kind, namely where an employee is required to go on successive overseas postings at the behest of the employer, is in order to ascertain where, looking at the whole period of the contract, the employee's base is. The only exception to that approach is where the contract expressly provides that the employee is to work "wholly, or substantially wholly" abroad. In any other circumstances in cases of this kind the 'base test' is part and parcel of the contract test, it is not a separate test.
11. In our judgment, it is also clear from Carver that the expression in section 196(2) "ordinarily works outside Great Britain" is to be construed differently from the expression "engaged in work wholly or mainly outside Great Britain" in section 196(1). That is clear from the judgment of Mantell LJ in the case of Carver at page 372 paragraph 9 of the report where he says:

"So it is quite clear that with regard to the Employment Rights Act 1996 Parliament allowed for a distinction to be made between the place where under the contract of employment the employee ordinarily works and the place where the employees is wholly or mainly engaged in work."

12. It follows from that, in our judgment, that it is no answer to the question, does the employee 'ordinarily' work outside Great Britain, to say well under the contract he is obliged 'primarily' to work outside the United Kingdom and therefore he ordinarily works outside Great Britain. Such an approach ignores the distinction made by Parliament in section 196 as specifically noted by Mantell LJ in Carver between the two statutory expressions used in section 196. In our judgment it is clear that the Employment Tribunal here founded its decision in paragraph 8 on the fact that the contract required Mr Cosgrove, as an overseas cable jointer, 'primarily' to work outside the United Kingdom and that that was in their judgment decisive of the position. They did not make any enquiry by reference to the terms and conditions of the contract, looking at it at the time it was made and at the whole period contemplated by the contract in order to see where the employee's base was to be. That, in our judgment on the authorities to which we have been referred and in the light of the submissions made to us by Mr Davison with which we agree, is the crucial enquiry in a case of this kind. And that is the enquiry, which, unfortunately, the Employment Tribunal did not make.
13. For those reasons we find that the Employment Tribunal did err on this difficult topic in relation to the way in which they approached the matter and construed the words in section 196(2).
14. We thus turn to consider whether in this particular appeal we should substitute our own conclusion for that of the Employment Tribunal. In our judgment, this is a case where it is clear from the wording of the express terms and conditions of the contract itself, looking at it in the manner required by the decisions of the Court of Appeal, that Mr Cosgrove's base was to be in Erith in Kent. We notice that the requirement was for him to be in the United Kingdom at Erith and to be prepared to move from one overseas contract to another. Between tours overseas the contract required him to travel from Erith and return to Erith and then to work in the United Kingdom at or around Erith or at other places in the United Kingdom between overseas tours of duty. He could either be required to work in the United Kingdom or he could be required to train in the United Kingdom, or he could be required to be on standby between overseas duties in the United Kingdom. In those circumstances, looking at those provisions alone, we consider it is abundantly clear that he was based in the United Kingdom. His salary was paid in sterling in a United Kingdom bank account and the grievance and disciplinary procedures applied to him in Erith in Kent. Looking at the provisions of the contract viewed as a whole, as helpfully set out in the decision of the Employment Tribunal at paragraph 4(xi), we are unanimously of the view that the terms of the contract here establish that the appellant's base was Erith in Kent, where it also appears that he had himself been living for many years as the Employment Tribunal found at paragraph 4(i) and they also found at paragraph 4(v) that he was part of the Project Unit based at Erith and that he took his instructions from the Project Unit. When one overseas tour of duty finished the appellant would at most times return to the United Kingdom. The evidence, in our judgment, was very strong indeed to the effect that his base was at Erith in Kent
15. For all those reasons we have concluded that this is a case where we should allow the appeal and substitute our decision that the appellant did have the right not to be unfairly dismissed since he was not an employee who under his contract of employment ordinarily worked outside Great Britain. The matter will have to be remitted to the Employment Tribunal so that there can be a hearing as to whether or not Mr Cosgrove was unfairly dismissed. That remains to be decided by the Employment Tribunal and is a matter about which we express no view since we have no idea what the merits are in relation to that aspect of the case.
16. The appeal is allowed on that basis.