United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR JONATHAN SWIFT (of Counsel) Instructed by: Messrs Lewis Silkin Solicitors 12 Gough Square London EC4 3DW
For the Respondent	MR MARTIN FODDER (of Counsel) Instructed by: Messrs Archon Solicitors Sun Court 67 Cornhill London EC3V 3NB


 


HIS HONOUR JUDGE J BURKE QC

The facts

1. This is another appeal in a series of appeals from decisions of the Employment Tribunal, generated by the repeal by section 32(3) of the Employment Relations Act 1999, with effect from 25 October 1999, of section 196 of the Employment Rights Act 1996 "ERA"), which have raised the issue as to the territorial limits of the Employment Tribunals' ability to entertain complaints of unfair dismissal, breach of contract and unlawful deductions from wages. There have, so far, been three decisions of the Employment Appeal Tribunal on the issue; they are, in the order in which they were heard, Lawson -v- Serco Limited (EAT/0018/02 judgment 11 March 2003) Bryant -v- The Foreign and Commonwealth Office (EAT/0174/02 judgment 10 March 2003) and Jackson -v- Ghost Inc (EAT/00547/02 judgment delivered 2 September 2003).
2. The judgments in the first two of those three appeals were available and extensively referred to by Counsel in the present appeal; the argument in Jackson took place, in part, contemporaneously with the argument before us. As is set out at paragraph 3 of the judgment in Jackson, arrangements were made for the Skeleton Arguments in Jackson to be provided to Counsel in this appeal and vice versa; these arrangements were facilitated by the fact that Mr Fodder appeared for the employee in both and that Mr Swift, who appeared before us on behalf of the employers, and Ms Proops, who appeared in Jackson on behalf of the employers, are in the same chambers. We have seen the judgment in Jackson, which was, handed down after the arguments before us were completed; but we were not asked, in the event that that judgment appeared before this judgment was written, to permit the parties the opportunity to present further arguments on what might be said in that judgment; and we do not regard it as necessary to do so, each party having had and having very properly taken the opportunity to address in full all of the arguments put before the division of the Employment Appeal Tribunal which decided Jackson and all of the arguments which form the basis of our decision in this appeal.
3. There were some issues raised before us which were not, or at least had not been at the conclusion of the arguments before us, raised in Jackson. They are whether jurisdiction in respect of Mr Bishop's unfair dismissal claim can be based:

(i) on article 14 of the Council of the European Union's Regulation EC44/2001, and

(ii) on the finding that English law was the proper law of Mr Bishop's contract of employment.

4. With that preamble, we can turn to the facts. In 1981 Mr Bishop was first employed as a Sales Executive by the Financial Times Limited ("FT") at their London office. In 1992 he was promoted to Sales Manager to the Information Technology Sector at the same office. In March 1995 he moved to a similar role in New York; a visa was obtained which entitled him to work, as a UK national, on a temporary basis in the USA. He continued to work there until June 1997 when he took up the post of Advertising and Circulation Manager in FT's new Singapore office; that office was at first serviced from Hong Kong where Mr Bishop worked until he moved to Singapore in September 1997. He remained there until January 1999. He then transferred back to New York and moved on to San Francisco where his role was to take in house the selling of FT's advertising. In San Francisco he worked originally in an office provided by FT's parent company and then, from the Spring of 2001, in an office provided by Financial Times Incorporated ("FT Inc"), an associated US corporation.
5. The Tribunal found that, from January 1999, Mr Bishop was in the main treated as an employee of FT Inc and participated in FT Inc's bonus scheme. However his terms and conditions of employment were largely those which he had enjoyed throughout his employment by FT, including in particular a holiday allowance which was in excess of that of US local employees.
6. On 20 March 2002, in San Francisco, Mr Bishop was dismissed by Mr Boyar, his Departmental Head who was based in New York and was Vice President of FT Inc. By his Originating Application, presented to the Employment Tribunal in London on 18 June 2002, Mr Bishop claimed (1) that he had been unfairly dismissed (2) that his employers had, in breach of contract, failed to pay to him bonuses due, including a bonus of $28,000 said to have been outstanding from February 2000. He brought his claim against FT on the basis that they had always been his employers and were his employers at the date of dismissal.
7. In their Notice of Appearance FT claimed that, for the reasons which they set out, based broadly on the assertion that Mr Bishop was employed and dismissed in the USA, the Tribunal did not have jurisdiction to hear and determine Mr Bishop's claims. They also asserted that, in relation to the breach of contract claim, England was not the appropriate forum. They requested a preliminary hearing at which these issues could be determined.

The Tribunal's Decision

8. The preliminary hearing sought by FT took place before the Tribunal, sitting at London South and chaired by Mr Peters, on 18 December 2002; the Tribunal's reserved decision was sent to the parties with Extended Reasons on 19 February 2003. The Tribunal concluded firstly, at paragraphs 23 - 25 of their decision, that Mr Bishop's employer throughout the period from 1988 to 2002 and at the date of the dismissal was FT. That conclusion has been accepted by FT and is not the subject of this appeal. The Tribunal then determined (i) that the Tribunal had jurisdiction to consider the unfair dismissal complaint and the breach of contract complaint, (ii) that the most appropriate forum for the litigation was England and (iii) that English law governed Mr Bishop's contract of employment throughout the relevant period. They therefore directed a substantive hearing of Mr Bishop's claim; but that hearing has been postponed pending this appeal. The last two of those conclusions are not in issue in this appeal; the appeal has concentrated on the issue as to whether the Tribunal rightly decided that they could entertain Mr Bishop's claims.

The statutory history

9. The right of an employee not to be unfairly dismissed by his employer is now embodied in section 94(1) of the ERA; it has existed in various statutes since the Industrial Relations Act 1971. It is a right created purely by statute. The ERA provides, of course, numerous other rights which were first created by various statutes and consolidated into the ERA.
10. The history of section 196(2) of the 1996 Act and its predecessors is set out in the Employment Appeal Tribunal's judgment in Jackson; and it is, we hope, unnecessary for us to repeat, save by way of brief summary what it there set out. The subsection provided:

"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."

The provisions there referred to included Part X of the ERA in which the right not to be unfairly dismissed and to make a complaint to an Employment Tribunal of unfair dismissal are contained. It is to be noted that section 196(2) and its predecessors and the equivalent provision was to be found in all previous statutes which set out the right not to be unfairly dismissed did not purport to limit jurisdiction; the statutory right not to be unfairly dismissed did not exist in a case which fell within that subsection. Other rights now provided by the ERA to employees were also subject to that subsection.

11. The provisions of section 196(2) did not, however, have any relevance to the right to make a complaint to an Employment Tribunal of breach of contract. The right of one party to a contract to make a claim against another for breach of contract is, of course, enshrined in the common law; the right of an employee to bring a claim for breach of contract in certain defined circumstances in the Employment Tribunal was provided by the Employment Tribunals Extension of Jurisdiction (England and Wales) Order 1994 and by the parallel Order of the same year in Scotland; those Orders were made under powers given by section 3 of the Employment Tribunals Act 1996 section 3 and its predecessor. Section 196 of the ERA had no part to play in such a breach of contract claim.
12. Although section 196(2) had given rise to the difficulties of interpretation considered by the Court of Appeal in Carver -v- Saudi Arabian Airways 1999 IRLR 170, the facts of which and the decision in which are summarised at paragraphs 34 - 36 of the judgment in Jackson, it and its predecessors have formed part of the statutory framework of employment law from the commencement of the right not to be unfairly dismissed; it is perhaps not surprising that difficulties of interpretation arose; but in cases in which the employee could not claim to have ordinarily worked in Great Britain, either on the "base test" or on the "contract test" which were fully discussed in Carver, section 196(2) made it clear that no claim based on any of the provisions to which it applied could be brought. While there were inevitably borderline cases, the principle was relatively straightforward.
13. In contrast to the rights provided to employees under the ERA, in the case of the primary statutory provisions intended to prevent discrimination in the employment field, there is a different principle, namely whether the employee is employed at or the discrimination is in relation to employment at an establishment in Great Britain; see Equal Pay Act 1970 section 1(1), Sex Discrimination Act 1975 section 6(1), Race Relations Act 1976 section 4(1) and Disability Discrimination Act 1995 section 4(6). Under the first of these four provisions, the statutory equality clause can only arise and a claim based on contravention of a term modified or included by way of an equality clause can, therefore, only be made in the case of a contract under which the employee is employed at an establishment in Great Britain. The 1975 and 1976 Acts both provide that:

"it is unlawful for a person in relation to employment by him at an establishment in Great Britain, to discriminate ……"

The 1995 Act uses the same language

14. The repeal of section 196 of the ERA was not accompanied by the introduction of any new statutory provision setting out any statutory limit upon the extent of the right not to be unfairly dismissed or upon the ability of Employment Tribunals to entertain an unfair dismissal claim or other claims made under the ERA. It was, therefore, open to employees who did not ordinarily work within Great Britain to argue that, in the absence of section 196(2), there was no such limit or that any such limit as could be identified from other sources gave the Tribunal's jurisdiction on a wider basis than hitherto. Not surprisingly, employees have taken that opportunity; and employers have sought to resist it. It is in these circumstances that there has been a substantial number of recent cases in which Tribunals have had to decide upon their own jurisdictional limits; four of those decisions have now been considered on appeal by the Employment Appeal Tribunal, as we have indicated above; many other appeals are waiting in the wings. The first of the EAT's four decisions, that in Lawson, is to be considered by the Court of Appeal, we understand, in December of this year.

The EAT's Decisions

Lawson -v- Serco

15. Mr Lawson was employed by Serco Limited for a brief period as a security supervisor in Ascension Island. He did not work anywhere else during the course of his employment. He is British and domiciled in England; and Serco Limited is a UK company with its head office in the UK. Mr Lawson was paid in the UK by sterling transfers into his UK bank account. He claimed that he had been constructively and unfairly dismissed for asserting a statutory right under the Working Time Regulations 1998 and, as the EAT held, also for raising health and safety matters. If he had been dismissed for either of those reasons, the qualifying period of one year's continuous employment would not have been required in his case (section 198(1) and (3) of the ERA); and his dismissal would have been automatically unfair (section 100(1)(c) and section 104(1) and (4)(a) of the ERA), if those provisions applied to him.
16. The course of events before the Tribunal and the Employment Appeal Tribunal is set out in paragraphs 55 to 62 of the judgment in Jackson. In summary, the Employment Appeal Tribunal concluded that:

(1) the jurisdictional issue is not determined by what is the proper law of the contract.

(2) Section 244(1) of the ERA defines the territory within which the ERA is to apply but not those who are to be treated as subject to the provisions of the Act.

(3) Although the ERA itself contains no jurisdictional limit, such a jurisdictional limit is to be found in Regulation 11(5) of the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2001.

(4) That Regulation gave the Tribunal jurisdiction to consider Mr Lawson's claim because Serco Ltd carried on business in England and Wales.

(5) The Tribunal had no jurisdiction to stay proceedings before them on the basis of the forum non conveniens doctrine.

17. We agree, as the judgment in Jackson states at paragraph 62 - and indeed it is not in dispute that there were put before us arguments which were apparently not advanced in Serco on behalf of the employers; they were:

(1) the argument based on the effect of the European Parliament and Council Directive 96/71/EC, known as the Posted Workers Directive ("PWD").

(2) The argument based on the "substantial connection" test.

(3) The rebuttable presumption against the extra-territorial effect of UK Statutes.

(4) The argument as to the true meaning and effect of the 2001 Regulations, which arguments we will consider below.

Bryant -v- The Foreign and Commonwealth Office

18. Mrs Bryant was employed by the Foreign and Commonwealth Office from 1994 to 2001 at the British Embassy in Rome. She was recruited in Italy; the contract of employment was made there; she worked only in Italy and was paid at local rates. She lived in Italy but was a UK citizen. She complained that she had been unfairly dismissed; she also claimed that she had been the victim of sex discrimination and that the Foreign and Commonwealth Office had acted in breach of contract and in breach of the Equal Pay Act 1970.
19. We hope to be forgiven for adopting the history of the hearing of Mrs Bryant's claim and the summary of the reasons for the decisions of the Tribunal and the Employment Appeal Tribunal in her case set out at paragraphs 43 to 51 of the judgment in Jackson. The Tribunal had held that they had no jurisdiction in respect of any of Mrs Bryant's claims; her appeal against the rejection of her claims under the Sex Discrimination Act and the Equal Pay Act were dismissed without any argument; her appeal against the rejection of her unfair dismissal claim was dismissed; but it is important to point out, in the context of the present appeal, that the EAT concluded that there was jurisdiction in respect of her breach of contract claim; see paragraphs 30 to 35 of the judgment in her case.
20. We would add that the EAT in Bryant, as in Lawson, did not have the benefit of the very full argument which was deployed before us and before the Employment Appeal Tribunal in Jackson. In particular in Bryant there appears to have been no reliance, on either side, upon section 244 of ERA, upon Regulation 11(5) of the 2001 Regulations, or upon the "substantial connection" test, all of which formed a prominent part of the arguments in Jackson and before us. Whether, as a result, the decision in Bryant is to be regarded as per incuriam we need not consider because nobody has suggested to us, however much respect and regard we must and do give to the judgments in Bryant and Lawson, which are unhappily in conflict with each other, that we are bound by either of them. It is clear that in neither case did the Employment Appeal Tribunal have full argument before it. It is also clear that what is said in Bryant as to the argument for unlimited extra territorial jurisdiction to entertain complaints of unfair dismissal is obiter dicta, because Mrs Bryant was not, on appeal, arguing for such a principle - although the employers believed that she would so argue and therefore presented arguments against such a principle. On the other hand, what is said in Bryant as to Mrs Bryant's right to claim for breach of contract against her employers in the Tribunal is not obiter dicta.
21. Whether obiter dicta or per incuriam or not, the EAT in Bryant, in considering the unfair dismissal complaint, was particularly concerned by the consequences of the arguments for a general extra-territorial jurisdiction in the Tribunal which had been advanced on Mrs Bryant's behalf before the Tribunal (supported at that time to an extent by the editors of Harvey (at Volume 1C1 paragraphs 1109 to 1111) and which counsel for the Foreign and Commonwealth Office was, at least in his skeleton argument, seeking to rebut. While it is correct that the reasons expressed by the EAT at paragraphs 12 to 15 and 21 to 26 of the judgment in Bryant were reached without full argument, it might be thought that they represent a constructive and pragmatic reaction to the very wide propositions advanced below which would, if correct, have had the effect that the Tribunal's jurisdiction in relation to claims made under the ERA was wholly without limit and that such claims might be advanced in the Employment Appeal Tribunal of the United Kingdom between parties neither of whom had any real or substantial connection with the UK and in relation to a contract of employment which had no such connection, whether (to take the examples mentioned in Bryant) the parties came from Senegal, Peru, Wisconsin or elsewhere.
22. In the judgment in Jackson reference is made (at paragraph 9 and 52/3) to the judgment of Pill LJ on Mrs Bryant's application to the Court of Appeal for permission to appeal - which she was not granted. That judgment was not before us (the last day of argument before us having occurred between the second and third days of the argument in Jackson); we have heard no argument as to it for that reason; but in the light of the fact that the Court of Appeal has given permission to Serco Ltd to appeal in Lawson, so that the essential area of dispute will be fully explored in the Court of Appeal, we do not regard it as right to take into account what was said by Pill LJ on what we take to have been an ex parte application, as to the result of which we have heard no argument.

Jackson -v- Ghost Inc

23. Mrs Jackson had lived and worked in the USA for a number of years when, in early 2000, she agreed in New York to work at the New York clothing store of Ghost Inc, a Californian corporation. Her employers, the Tribunal concluded, were Ghost Inc and not Ghost Ltd, a UK limited company which was separate from but shared common majority ownership with Ghost Inc. Mrs Jackson worked only at the New York store and was paid in New York by Ghost Inc. When she was dismissed in June 2001 she claimed that she had been unfairly dismissed, that she had suffered unlawful deductions from her wages and that her employers had acted in breach of her contract of employment. The Tribunal concluded that there was no jurisdiction to consider her claims; she appealed against the Tribunal's conclusions as to jurisdiction in respect of her unfair dismissal and wrongful deduction claims. We make no reference to Ghost Inc's cross-appeal which is not relevant for present purposes.
24. The EAT concluded that:

(1) the repeal of section 196 of the ERA was, in part, in order to comply with the UK Government's obligations under PWD and was not intended to confer unlimited jurisdiction.

(2) Regulation 11(5) of the 2001 Regulations does not confer jurisdiction on the Tribunal but merely determines where, if the Tribunal has jurisdiction, the case should be heard; and, therefore, in this respect Lawson was not followed.

(3) Section 244 of the ERA determines the extent of jurisdiction, not its applicability and does not assist on the issue before the EAT.

(4) The correct criterion is whether the employment has a substantial connection with the UK.

(5) On the facts there was no such connection; and Mrs Jackson's appeal failed.

The basis of the Tribunal's Decision in the present case

25. We must now set out in more detail the basis upon which the Tribunal in this case reached those of their conclusions which remain in issue. As to the unfair dismissal claim, the Tribunal held that:

(1) the repeal of section 196 of the ERA by section 32 of the Employment Relations Act 1999 was triggered by the need to implement PWD (paragraph 28).

(2) Section 244 of the ERA had the same meaning before and after the repeal of section 196 and did not assist to determine or define jurisdiction but was a "provision which designates the geographical limits of the law not the jurisdiction of the Courts and Tribunals" (paragraph 29).

(3) The purpose of PWD was not to remove the rights of posted workers in their home state but to enable such workers to benefit from the minimum terms and conditions of employment in the host country to which they were posted or their home country, whichever were more favourable (paragraph 33).

(4) Mr Bishop was domiciled in a member state; there was therefore jurisdiction to consider his unfair dismissal claim under Article 19 of Council Regulation 44/2001, subject to the forum non conveniens point (paragraphs 34 to 37).

(5) There was no other available and more appropriate forum for Mr Bishop's claims (paragraph 45).

As to the breach of contract claim, the Tribunal held that:

(1) Article 3 of the 1994 Extension of Jurisdiction Order provides that proceedings can be brought before a Tribunal if the claim is one in respect of which a court in England and Wales would have jurisdiction (paragraph 39).

(2) Such a court would have jurisdiction because FT as an English limited company could be served in England (paragraph 40).

(3) Therefore there was jurisdiction in the Tribunal to hear the breach of contract claim, subject again to the forum non conveniens argument (paragraph 40).

(4) There was no other available and more appropriate forum (paragraph 45).

26. Thus Mr Bishop succeeded on the jurisdictional issues; and we must turn now to the arguments presented with ability and erudition by Mr Swift on behalf of FT and Mr Fodder on behalf of Mr Bishop as to whether the Tribunal's conclusions should stand or fall.

Unfair dismissal - the arguments

27. We hope that Counsel will forgive us for summarising only the heads of their arguments; we do so in order to identify the topics which we must proceed to address.
28. Firstly on neither party's side was there any argument for unlimited extra-territorial jurisdiction or entitlement in respect of claims made under the provision of the ERA. The arguments addressed on behalf of Mrs Bryant to the Tribunal and responded to by Counsel on behalf of the Foreign and Commonwealth Office in the Employment Appeal Tribunal have not been repeated before us. Each party has started from the position that there must be some limit on the territorial scope of the right not to be unfairly dismissed and the other rights provided by the ERA and upon the jurisdiction of Tribunals to entertain claims that such rights have not been honoured. Each acknowledged that the correct identification of that limit posed considerable difficulties, in the absence of section 196(2).
29. Secondly, it is important, in our judgment, to bear in mind that, while we have referred in this judgment to extra-territorial jurisdiction, as Mr Swift pointed out the issue relates not only to procedural matters but to substantive rights. Although section 94 of the ERA provides the right not to be unfairly dismissed to employees without any expressed limitation on the scope of that right, neither party to this appeal suggests, to use again the geographical examples referred to in Bryant, that a Senegalese employee working for a Wisconsin based corporation in Peru has such a right. We will discuss in more detail later the effect of the presumption that a UK Statute does not have extra territorial effect; at this stage we think it right to draw attention to the need, in considering the arguments for and against the ability of the Tribunal to hear claims such as those of Mr Bishop, to bear in mind that the problem is not only one of whether service of the Originating Application to the Tribunal can be effected upon the employer. In the case of FT there can be no difficulties about effecting such service; nor would there have been any such difficulties in Bryant or in Lawson. Rule 23(4) of Schedule 1 to the 2001 Regulations contains no limitation on the geographical extent to which Tribunal proceedings may be sent to Respondents as is required by Rule 2(1); and in practice Tribunals, we are told, regularly send Originating Applications and other documents to Respondents based abroad, although we understand that there has been a Tribunal decision that overseas service should only be effected with the permission of a Regional Chairman (see E.L.A Briefing Volume 10 No 3 April 2003 page 47). Service is not the central consideration; the central consideration is whether, in each case, the employee has the benefit of the statutory right upon which he bases his claim; if he does have such a right, then prima facie the Tribunal has jurisdiction to entertain his claim; if he does not, the position is otherwise. Discussion of "extra-territorial jurisdiction" needs to be seen in that light.
30. Mr Swift's arguments may be summarised as follows:

(1) PWD does not have the purpose ascribed to it by the Tribunal.

(2) Article 19 of Council Regulation 44/2001 does not provide any jurisdictional limit.

(3) The Tribunal were therefore in error in basing their decision to hear Mr Bishop's unfair dismissal claim on those two factors.

(4) Regulation 11(5), on which Mr Fodder relied on appeal, did not provide the answer; and the decision in Lawson should not be followed.

(5) The limit was to be found in section 244 of the ERA or alternatively by applying a substantial connection test.

31. Mr Fodder's arguments may be summarised as follows:-

(1) Lawson was rightly decided; its reasoning should be adopted; the necessary limit is to be found in Regulation 11(5) of the 2001 Regulations.

(2) The Tribunal were right to rely on Article 19 of Council Regulation 44/2201.

(3) Section 244 should not be regarded as providing any jurisdictional limit.

(4) Jurisdiction can be based on the proper law of the contract of employment being English law.

(5) There was no statutory support for a substantial connection test which would be uncertain and difficult of application.

32. We will address separately the six issues which emerge from these arguments, i.e. PWD, Article 19, Regulation 11(5), Section 244, the proper law of contract and the substantial connection test. Although these issues, or most of them, were addressed in Jackson, we make it clear that we regard it as right to express our own views on them; we should do so in particular because we have reached those views independently of and before we saw the judgment in Jackson.

Hansard

33. Before embarking on consideration of those issues individually, it is necessary to refer to the extract from Hansard reporting the debate in Parliament on the amendment to the Employment Relations Bill which, as enacted, became section 32(3) of the Employment Relations Act 1999. We regard it as right in this case to consider what was said in Parliament by the Minister of State of the Department of Trade and Industry as to that amendment for the purpose of seeking clarity as to the mischief and the legislative intent behind the repeal of section 196(2). Although the words of the repeal themselves are not ambiguous or obscure, the result achieved by them plainly is obscure; there is no clear and obvious answer to the question - now that section 196(2) has gone, what is the limit upon the Tribunal's jurisdiction to entertain claims brought under the provisions of the ERA and where such limit is to be found? If light can be provided by the relevant Parliamentary material, in our view that material should not be ignored. This appears to us to be consistent with the guidance in Peper -v- Hart [1993] AC 593.
34. The Minister of State firstly made the point, explaining why section 196 could be repealed, that:

"International law and the principles of our domestic law are enough to ensure that our legislation does not apply in inappropriate circumstances"

He did not identify what principles of international law or domestic law he was referring to. He gave as the reasons why section 196(2) should be repealed, firstly, the need to ensure that the UK complied with its obligations under PWD and, secondly, the need to reduce in some cases the effect of the decision in Carver.

35. We accept that one of the purposes of the removal of section 196(2) may have been to enable employees who had worked for some years in the UK but were excluded from rights conferred by the ERA, as was Mrs Carver, to rely upon such rights: but consideration of employees in Mrs Carver's position did not require the wholesale elimination of section 196(2); and the Hansard extract gives little indication (save by the vague reference to international law and the principles of domestic law (set out above) as to the effect which such elimination was intended or expected to achieve, as the Employment Appeal Tribunal pointed out in Bryant, at paragraph 25(1) of the judgment.
36. The reference to other principles of international law and domestic law was extremely general and does not assist us in the task of establishing which principles do apply. Nor does Hansard explain why the repeal of 196(2) without any replacement provision was necessary to achieve compliance with PWD. We agree with the Employment Appeal Tribunal's view, set out at paragraph 40 of Jackson, that the Minister of State's expressions as to the reasons behind the repeal give rise to as many questions as there are answers. We have concluded that the contents of Hansard do not help in determining the true limit of jurisdiction, save that it does not appear to have been the intention of Parliament to provide unlimited jurisdiction (for which neither party to this appeal contends).

PWD

37. Mr Fodder submitted that PWD has no relevance to unfair dismissal claims. Mr Swift agreed that it had only an indirect connection with such claims. Article 3(1) of PWD provides as follows:

"Member States shall ensure that, whatever the law applicable to the employment relationship, the undertakings referred to in Article 1(1) guarantee workers posted to their territory the terms and conditions of employment covering the following matters which, in the Member State where the work is carried out, are laid down -

- by law, regulation or administrative provision, and/or

- by collective agreements or arbitration awards which have been declared universally applicable within the meaning of paragraph 8, insofar as they concern the activities referred to in the Annex -

(a) maximum work periods and minimum rest periods;

(b) minimum paid annual holidays;

(c) the minimum rates of pay, including overtime rates; this point does not apply to supplementary occupational retirement pension schemes;

(d) the conditions of hiring-out of workers, in particular the supply of workers by temporary employment undertakings;

(e) health, safety and hygiene at work;

(f) protective measures with regard to the terms and conditions of employment of pregnant women or women who have recently given birth, of children and of young people;

(g) equality of treatment between men and women and other provisions on non-discrimination.

For the purposes of this Directive, the concept of minimum rates of pay referred to in paragraph 1(c) is defined by the national law and/or practice of the Member State to whose territory the worker is posted."

38. The effect of those provisions is, in our judgment, that the domestic law of a member state must guarantee to a worker posted to that state terms and conditions of employment laid down within that state for indigenous workers, by one or more of the methods identified, as to the matters set out at (a) to (g). Unfair dismissal or the right not to be unfairly dismissed is not one of those matters; and those matters in UK law are not governed by or principally by the ERA. The thrust behind PWD might be taken to indicate that, by analogy, posted workers ought to have the same rights in the state to which they are posted in relation to unfair dismissal as indigenous workers; but the omission of unfair dismissal from PWD points in the opposite direction.
39. What PWD does not say, as we see it, is that a posted employee may choose between the rights available to him in the state in which he is posted and the rights available to him in his own country, as the Tribunal thought at paragraph 33; and in any event PWD applies only to posted workers as defined by Article 2.1 i.e. .a worker who, for a limited period, carries out his work in the territory of a Member State other than the state in which he normally works.
40. None of Mr Bishop, Mrs Jackson or Mr Bryant would fall within that definition. We prefer not to guess as to the status of Ascension Island.
41. It follows that we have some doubt whether, in the absence of full argument, the Employment Appeal Tribunal was correct at paragraph 25.(1) of the judgment in Bryant to explain the repeal of section 196 in terms of the UK's need to comply with the provisions of PWD. In our judgment PWD does not help us to understand the reasons for the repeal of section 196; of more importance, it does not assist us in determining where, if anywhere, the limit on jurisdiction for claims made under the provision of the ERA is to be found or what that limit is. Connections between PWD and the provisions of the ERA there may be; see paragraphs 66 to 70 of the judgment in Jackson; but, on the basis of agreement between Counsel in this appeal that there is a jurisdictional limit, PWD does not supply it or tell us where it is to be identified.

Article 19 of EC 44/2201

42. In Lawson the Employment Appeal Tribunal concluded (at paragraph 17) that EC 44/2201:

"On jurisdiction and a recognition and enforcement of judgments in civil and commercial matters"

applied only where the choice of jurisdiction was between Member States of the European Community. Mr Fodder submits that section 5 of those Regulations, headed "Jurisdiction over individual contracts of employment" is not so limited and that Article 19, as part of that section, applies full square to this case and has the effect that FT, "domiciled" in the UK as it is, may be sued by an employee in the courts, including the Employment Tribunal, of this country. Section 5 of the Regulation consists of Article 18 to 21. Articles 20 and 21 are of no present relevance. Article 18(1) provides:

"(1) In matters relating to individual contracts of employment, jurisdiction shall be determined by this section, without prejudice to Article 4 and point (5) of Article 5"

Article 19 provides:

"An employer domiciled in a Member State may be sued:

(i) In the Courts of a Member State where he is domiciled or

(ii) In another Member State:

(a) in the Courts where the place where the employee habitually carries out his work or in the Courts for the last place where he did so, or

(b) If the employee does not or did not habitually carry out his work in any one country, in the Courts for the place where the business which engaged the employee is or was situated."

43. Article 19(II) does not assist Mr Bishop because, of course, the USA is not a Member State; he relies in Article 19(1), on the basis that FT, domiciled here may, in relation to individual contracts of employment, be sued here.
44. Mr Swift's submission on this issue is that Article 19 does no more than prescribe procedural steps setting out where an existing right may be pursued and enforced and does not assist at all as to whether the right to claim unfair dismissal or to make any other claim under the provisions of ERA exists where the employment is beyond the territorial limits of UK jurisdiction.
45. In our judgment Mr Swift's submission on this issue is to be preferred. The essential question is whether, on the facts, Mr Bishop had a right not to be unfairly dismissed and whether the Tribunal could entertain a claim that the employer had broken his obligation to honour that right. Article 19, as we see it, does not give us any indication as to the extent, if any, of the extra-territorial effect of section 94 of the ERA; it tells us only where,if a right under section 94 exists, it can be pursued. We do not believe that Mr Bishop can found jurisdiction on Article 19; and to the extent that the Tribunal took a different view they were, in our judgment, in error.

Regulation 11(5) of the 2001 Regulations

46. Regulation 11(5) of the 2001 Regulations which apply to Employment Tribunals in England and Wales, provides as follows:

"(5) The rules contained in Schedules 1, 2 and 3 shall apply in proceedings to which they relate where -

(a) the respondent or one of the respondents resides or carries on business in England and Wales;

(b) had the remedy been by way of action in the county court, the cause of action would have arisen wholly or partly in England and Wales; or

(c) the proceedings are to determine a question which has been referred to the tribunal by a court in England and Wales."

Mr Fodder placed substantial reliance upon this Regulation; he submitted that the decision of the Employment Appeal Tribunal in Lawson was correct and that the repeal of section 196 did not result in unlimited extra-territorial jurisdiction because Rule 11(5) provides the necessary limit, namely that in an unfair dismissal claim or other claim brought under the provisions of the ERA, except a claim where separate Rules of Procedure apply (see Regulation 11(1) - which is not the case in respect of the rights given to employees under the ERA), that the circumstances set out in Regulation 11(5)(a)(b) or (c) exist. He submits that the circumstances set out in Regulation 11(5)(a) existed in the present case; FT carry on business in England and Wales; in contrast, had the Tribunal found that Mr Bishop was employed by FT Inc, those circumstances would not be made out. Thus the operation of a statutory limit, in a clear and fair way, can be readily seen.

47. Mr Fodder pointed to the contrast between Regulation 11(5) and Regulation 11(6) which provides that Schedules 4, 5 and 6 of the Regulations, which govern procedures for statutory issues arising other than under the ERA, apply "in relation to proceedings before a Tribunal which relate to matters arising in England and Wales"; and he relied on section 7 of the Employment Tribunals Act 1996 which gave power to the Secretary of State to make regulations (such as the regulations which we are now addressing) to "make such provision as appears to him to be necessary or expedient with respect to proceedings before an Employment Tribunals", which power he described as very wide. These arguments found favour in Lawson; see paragraphs 12 and 13 of the judgment.
48. Mr Fodder accepted that, if his argument derived from the decision of Lawson is correct, Mrs Bryant ought to have succeeded; for the Foreign and Commonwealth Office carries on business in England and Wales. The fact that Mrs Bryant did not succeed on that basis should, he argues, not be regarded as diminishing the strength of his argument, because Regulation 11(5) was not argued and therefore was not considered in Bryant. We accept this submission and put Mrs Bryant's failure wholly aside, so far as this aspect of this appeal is concerned. There are, however, more formidable difficulties.
49. Firstly, in our judgment, section 7 of the Employment Tribunals Act 1996 empowered the Secretary of State to make regulations as to procedures or proceedings before Tribunals but not as to the conferring or limitation of rights. It is to be noticed that section 7(4) provided that Employment Tribunal Procedure Regulations may, in particular, include provision "for determining by which Tribunal any proceedings are to be determined". Nothing in section 7 of the Employment Tribunals Act indicates that the Secretary of State was empowered by regulation to expand or contract or define the extent of rights provided by the ERA.
50. Secondly, in the context of those empowering provisions, Regulation 11(5) simply provides that the Rules in Schedules 1, 2 and 3 shall apply to the type of proceedings governed by those Schedules in the circumstances set out in (a) (b) and (c); Schedules 1 2 and 3 lay down a series of purely procedural rules. Regulation 11(5) is to be contrasted with Regulation 11(5) of the parallel regulations in Scotland which are in the same terms as Regulation 5 of their English and Welsh counterpart save that where the words "England and Wales" appear in the latter, the word "Scotland" appears in the former. It is true to say that the terms of Regulation 5(b) and (c) are not identical in both regulations; but the closeness is sufficient to persuade us to the view, on which Mr Swift relied, that these provisions tell litigants to which proceedings the England and Wales procedural rules apply and to which proceedings the Scottish procedural rules apply; so far as Regulation 11(5)(a) is concerned, the English and Welsh Rules apply if the Respondent or one of the Respondents resides or carries on business in England and Wales. If one Respondent is in England and Wales and one in Scotland, the Rules applying are those which apply to the proceedings to which they relate i.e. to England and Wales if the proceedings are brought in England and Wales, and Scotland if the proceedings are brought in Scotland.
51. Thirdly, we respectfully find it difficult to agree with the Employment Appeal Tribunal in Lawson that the 2001 Regulations can properly be seen to fill the gap intentionally left by the repeal of section 196 a year earlier. The previous versions of Regulation 11(5) of the 2001 Regulations, Regulation 8(3) of the 1993 Regulations and Regulation 3(1) of the 1985 Regulations, were not materially different; there were differences in wording but they are not differences material to the present debate. We prefer and adopt as part of our judgment the reasons given by the Employment Appeal Tribunal in Jackson on this point (paragraph 75); in our judgment, the words of the 2001 Regulations have not been adopted, as compared with their predecessors, to fill any gap left by the repeal of section 196; and it is not open to us, applying ordinary principles of statutory construction, to assume or infer the contrary.
52. We further agree with the reasons given by the Employment Appeal Tribunal in Jackson for disagreeing with the decision in Lawson on this issue at paragraph 73 and 74. We do not see any need to repeat in our own words the points succinctly made in those paragraphs.

The proper law of the contract

53. The argument that the proper law of the contract determines jurisdiction arose in Lawson but not, it seems, in Jackson or Bryant. The Tribunal in Lawson had concluded that there would be jurisdiction to entertain an unfair dismissal claim if the contract of employment was either governed by UK law or the parties agreed to submit to the jurisdiction of the UK Tribunals. The Employment Appeal Tribunal disagreed, relying on section 204(1) of the ERA which provides:

"(1) For the purposes of this Act it is immaterial whether the law which (apart from this Act) governs any person's employment is the law of the United Kingdom or of a part of the United Kingdom, or not."

54. Mr Fodder referred to Dicey & Morris "The Conflict of Laws" 13^th Edition paragraph 3-075 which sets out the general principle that a United Kingdom statute does not normally apply to a contract unless the governing law of the contract is the law of some part of the United Kingdom. He submits that the corollary of that principle is that a United Kingdom statute does apply to a contract, the governing law of which is English law, as in Mr Bishop's case and that section 204 of the ERA has the additional effect of applying or permitting the application of the provisions of the ERA to cases in which the proper law is not English law.
55. We do not accept these submissions. It has been said in many contexts that the rights given by the ERA to the employee and in particular the right not to be unfairly dismissed are not contractual but statutory rights. Although of course the termination of the contract of employment is an essential prerequisite to a successful unfair dismissal claim, that is so because the terms of the ERA require it. A constructive dismissal claim requires a fundamental breach of the contract of employment; but it is not a claim for breach of contract; it is a claim for breach of a statutory right; and section 204 expressly provides that, for the purposes of ERA, whether the proper law of the contract is or is not the law of the UK or part of it is immaterial. We respectfully agree with the view of and reasoning of the Employment Appeal Tribunal in Lawson at paragraphs 7 to 9 on this point. The Senegalese employee working in Peru for a Wisconsin corporation would not be enabled to bring proceedings in the Tribunals here to assert the right not to be unfairly dismissed simply because his contract of employment happened to provide that English law was the proper law of his contract.

Section 244 of the ERA

56. It is illustrative of the complexities of the problem raised by the repeal of section 196 of the ERA and the sequence of decisions which has followed that repeal that, with startling symmetry, neither Regulation 11(5), the provision principally relied upon by Mr Fodder, nor section 244 of the ERA, the provision principally relied upon by Mr Swift, was referred to in Bryant. Section 244 was, however, considered in Lawson and in Jackson, on each occasion with the same result.
57. Section 244(1) provides as follows:

"(1) Subject to the following provisions, this Act extends to England and Wales and Scotland but not to Northern Ireland."

Mr Swift's argument is that the Tribunal were wrong to regard section 244(1) as not setting out the boundaries of the Tribunal's jurisdiction as to claims brought under the ERA. He submits that the effect of section 244(1) is to provide (save in the case of exceptions for which specific provision is made e.g. merchant seamen) that the right not to be unfairly dismissed extends only to employment relationships which in substance exist within Great Britain. The Employment Appeal Tribunal in Lawson was in error, he submits, in regarding section 244(1) as defining only the extent of the territory within the courts of which the Act is to be applied and in the view that section 196(2) would have been otiose if section 244(1) had the effect for which the employers were arguing. That latter view, it was argued, involved a failure to appreciate that section 196(2) could not be regarded as an alternative to section 244(1) but provided a further restriction upon the scope of the right not to be unfairly dismissed by excluding from it employees whose employment might fall within section 244(1) but who ordinarily worked outside Great Britain - as, for instance - was or might have been the case in Carver.

58. We have already pointed out that, on this issue, at least, where it has been raised the Employment Appeal Tribunal has spoken with one voice; and even if not formally bound by what was said on this issue in Lawson and in Jackson, we must regard the views of the divisions of the Employment Appeal Tribunal which decided those two appeals as highly persuasive; but in any event we have independently come to the same conclusion. In our judgment there is an important difference between a provision such as section 196(2) which directly affects the application of the Act and a provision such as section 244(1) which deals only with its geographical extent. To put the point in very simplistic terms, an application provision in a statute such as the ERA (including section 196(2) which is strictly a disapplication provision) lays down the circumstances or some of the circumstances in which the rights, obligations, powers and liberties created by the statute apply or do not apply; thus section 196(2) stated that certain provisions of the Act, including the right not to be unfairly dismissed and to bring a claim of unfair dismissal before the Tribunal, should not apply in certain defined circumstances; the employee who under his contract of employment ordinarily worked outside of Great Britain did not, while section 196(2) existed, have a right not to be unfairly dismissed and did not have a right to complain to the Tribunal of unfair dismissal because of the existence of section 196(2). Section 244(1), which, until section 196(2) was repealed, co-existed with it, defines not what is the jurisdiction of the Tribunal nor who has the right not to be unfairly dismissed or to complain of unfair dismissal to the Tribunal but defines within what territory the provisions of the Act are to have effect i.e. they are to have effect in the Tribunals and Courts of England, Wales and Scotland but not in the Tribunals and Courts of Northern Ireland or anywhere other than England Wales and Scotland.
59. On this basis, the meaning of section 244(1) is clear; but if it was intended to define the scope of the rights provided by the Act, it is in our view far from clear how it could achieve that intention . Do the words of section 244(1) limit those rights to employees who are domiciled or are resident in Great Britain? Or to employments which took place in Great Britain? Or is the limit based on the domicile or some other feature or features of the employers and their business? Mr Swift's argument that section 244(1) excludes from the ERA rights employment which does not, in substance, exist within Great Britain involves a substantial gloss on the simple words of section 244(1) and leaves many unanswered questions.
60. We agree with the reasons for their conclusions as to section 244(1) set out by the relevant divisions of the Employment Appeal Tribunal in paragraphs 7 to 9 of the judgment in Lawson and in paragraphs 81 to 83 of the judgment in Jackson. It appears to us that, prior to the appeal of section 196(2), section 244(1) existed almost without notice; it was not regarded as establishing a jurisdictional limit of the type which we have been discussing. If it had, it might have been regarded as providing another defence to the employers in cases such as Carver and section 196(2) would indeed have been otiose. It is possible, in theory perhaps, to conceive of a case that might have fallen within section 244(1) which would not then have been excluded by section 196(2); in practice we doubt whether this situation would ever have arisen. Section 244(1) was in place before the repeal of section 196; indeed in the same form or in such a form as "this act does not extend to Northern Ireland" it has existed since the beginning of unfair dismissal legislation. It has never been suggested, before the repeal of section 196, that section 244(1) had the effect for which FT now contend; and section 244(1) was not amended so as to change its role when section 196 was repealed; it could not have acquired an altered meaning or function as a result of that appeal. Accordingly we reject Mr Swift's submissions on this issue.
61. Our view is influenced in part by Bennion "Statutory Interpretation" 4^th Edition 2002 at section 103 which states and supports by example the principle that the extent of an Act is "the geographical area throughout which it is law". That principle embodies precisely what we have, in a less succinct way, been seeking to express as the true function of an "extent" provision in contrast to an "application" provision.

Substantial connection

62. If the limit upon total extra-territorial application of the right not to be unfairly dismissed and to complain of unfair dismissal to the Employment Tribunal - which notion both parties abjure - is not to be found in any of the various solutions put forward by the parties which we have considered so far, where is it to be found? Mr Swift's alternative or fallback position, in the event that his argument based on section 244(1) of the ERA was unsuccessful, was that the Courts and Tribunals of Great Britain should find that limit in the "substantial connection" test i.e. that those rights exist and can be enforced in Great Britain in a case in which employment has a substantial connection with Great Britain. This alternative argument found favour with the EAT in Jackson; and we have come to the same conclusion.
63. We intend no criticism in saying that we received lengthy and complex arguments on this issue; we intend no disrespect in only summarising their major thrust. Both Mr Swift and Mr Fodder agreed that there is a presumption that UK statutes do not ordinarily have extra-territorial application; that presumption is well established in case law and in textbooks, as appears from paragraph 25(3) of the judgment in Bryant; it is not in dispute before us. Both parties, as we understood it, also accept that that presumption can be rebutted without difficulty if the express words of the statute under consideration so provide or if it is clear from the purposes and provisions of the statute, by implication, that it was intended not to be limited in scope as it would be if the presumption applied. Thus, the issue may be seen to be narrowed down. If, as we believe to be right, we must reject the arguments that the limit for which we have been seeking is to be found in Article 19, Regulation 5 or the other possible ports of call which we have identified, it is to be found by determining the extent to which the presumption against extra-territorial application is rebutted in the present circumstances. Mr Swift has submitted that, prior to its repeal, section 196(2) set out the boundaries of extra-territorial application of the ERA: now that section 196(2) has gone, the Court, he submitted, must look for another boundary; none is spelt out; but the most appropriate boundary, consistent with the authorities and in particular In Re Paramount 1993 Ch 223 was the test - does the employment relationship have a substantial connection with Great Britain? The application of that test to individual cases would involve a fact-finding exercise of a nature familiar to the Tribunal.
64. Mr Fodder submitted that there is no statutory basis for the adoption of such a test, that both the Employment Tribunal and the rights conferred by the ERA are statutory creations and that Parliament cannot be deemed to have provided such a test by implication in the case of those statutory creations, still less a test of so uncertain a nature. Mr Fodder did not, of course, seek to derive from those points the argument that there is no statutory limit. His argument sought both to undermine Mr Swift's argument and to strengthen his own argument for the importance of Regulation 11(5) or of Article 19.
65. In The Esso Malaysia [1975] 1QB 198 the plaintiff brought a claim in the courts of this country on behalf of twenty-four Russian crew members of a Latvian trawler who died after a collision between their vessel and a Panamanian oil tanker manned by a Spanish crew on the high seas in international waters. The parties agreed to trial by the English courts; but the question arose as to whether there was a good cause of action under the Fatal Accidents Acts i.e. as to the extra-territorial application of the right to make a claim under that Act on behalf of the dependants of the deceased. Rights were in issue, in contrast with merely procedural steps. Brandon J held that the plaintiff did have a good cause of action against the owners of the Panamanian vessel under the Fatal Accidents Act.
66. However that decision is to be contrasted with the decision of the Court of Appeal in Tomalin -v- S Pearson & Son Ltd [1909] 2KB 61 in which it was held that the widow of an English workman employed by English contractors to work on the building of a breakwater in Malta could not claim under the Workmens Compensation Act 1886 for compensation after he was killed during the course of such work. At page 64 Cozens-Hardie MR said:

"What is the ambit of the Statute and what is the scope of its operation? It seems to me reasonably plain that this is a case to which the presumption which is referred to in Maxwell on the interpretation of Statutes in the passage in page 213 …. must apply ". In the absence of an intention clearly expressed or to be inferred from its language or from the object or subject matter or history of the enactment, the presumption is that Parliament does not design its Statutes to operate beyond the territorial limits of the United Kingdom."

The Court of Appeal held that the right to claim under the Workmens Compensation Act arose by virtue of that Act and not otherwise, clearly could not apply universally all over the world and should be restricted in its application to accidents occurring within the United Kingdom; there was a limited exception of such restriction in a specific section of the Act referring to seamen and the like which tended to confirm the restricted application of the remaining provisions.

67. Mr Swift sought to reconcile these two decisions on the basis that the Fatal Accidents Act remedy is parasitic upon the right to personal injury damages for breach of a common law duty against a foreign defendant in the English Courts (if that defendant can be effectively served) while the right to compensation in Tomalin was a statutory right arising from a breach of statutory duty. Mr Fodder responded that, if that was the correct distinction, the rights provided by the ERA should be regarded as parasitic on the common law rights arising out of a contract of employment. We do not seek to resolve those arguments but to rely on the words quoted by Cozens Hardie MR which indicate, that in the case of each statute, the Court must look to see whether an intention as to operation beyond the territorial limits of the United Kingdom can be derived from the object, subject matter or history of the enactment.
68. In Re Paramount Airways the administrators of a company issued an Originating Application against a Jersey bank, seeking declarations that the transfer to the bank of considerable sums of money belonging to the company by one of its directors constituted transactions at an undervalue within the meaning of section 238 of the Insolvency Act 1986 and orders for repayment. The Registrar granted leave to serve the Originating Application on the bank in Jersey; on appeal that order was set aside on the basis that section 238 of the 1986 Act, the relevant words of which were:

"2. Where the company has at a relevant time … entered into a transaction with any person at an undervalue"

did not have extra-territorial effect.

69. The Court of Appeal allowed the administrators' further appeal. Sir Donald Nichols VC, with whom Taylor and Farquharson LJJ agreed, referred, at p 232 B, to the established principle of statutory construction to which we have been referring as the presumption against extra-territorial application; he quoted what he described as authoritative passages from the decision of the House of Lords in Clark -v- Oceanic Contractors [1983] 2AC 130 in which Lord Scarman said, at page 145:

"Putting it into the language of today, the general principle being there stated is simply that, unless the contrary is expressly enacted or so plainly implied that the Courts must give effect to it, United Kingdom legislation is applicable only to British subject or to foreigners who by coming to the United Kingdom, whether for a short or long time, have made themselves subject to British jurisdiction. Two points would seem to be clear; first, the principle as a rule of construction only, and secondly that it contemplates mere presence within the jurisdiction as sufficient to attract the application of the British legislation. Certainly there is no general principle that the legislation of the United Kingdom is applicable only to British subjects or persons resident here. Merely to state such a proposition is to manifest its absurdity. Presence, not residence, is the test."

and Lord Wilberforce said at page 152:

"That principle which is really a rule of construction of statutes expressed in general terms, and which as James LJ said is a "broad principle", requires an inquiry to be made as to the person with respect to whom Parliament is presumed in the particular case to be legislating. Who, it is to be asked, is within the legislative grasp, or intendment, of the statute under consideration? The contention being that, as regards the companies, the statute cannot have been intended to apply to them if they are non-resident, one asks immediately - why not?"

70. The Vice-Chancellor considered who were the persons in respect of whom Parliament was legislating at pages 235 to 238. He concluded that section 238 should apply, because of its purpose, irrespective of the situation of the property or of the nationality or residence of the other party. He then sought to find an acceptable implied limitation on that wide jurisdictional scope but concluded that no satisfactory limitation could be discerned (p 237 G). At p 239 E he concluded in these terms:

"What can be seen is that Parliament cannot have intended an implied limitation along the lines of ex parte blame. The expression therefore must be left to bear its literal and natural meaning:- any person."

71. However he was able, in effect, to limit the nominally unlimited scope of section 238 by pointing out that the statutory provisions provided a discretion to the court as to the orders which it should make. He continued, at p 239H:

"The discretion is wide enough to enable the Court, if justice so requires, to make no order against the other party to the transaction or the person to whom the preference was given. In particular, if a foreign element is involved, the Court will need to be satisfied that, in respect of the relief sought against him, the defendant is sufficiently connected with England for it to be just and proper to make the Order against him despite the foreign elements."

72. What implication should be drawn from the statutory provisions in the present case, in the absence of section 196(2)? It is, as we have said more than once, common ground that the ERA cannot have been intended to have provided rights on an unlimited extra-territorial basis; and there is no discretionary power in the Tribunal, in contrast to the position in Re Paramount Airways, to moderate the effect of such universal application by refusing to entertain a claim or to grant a remedy in circumstances in which it is not thought appropriate to do so. Yet it is not the case of either party that the presumption should, in the case of the ERA, stand unrebutted and that jurisdiction should be based, pursuant to Lord Scarman's view in Clarke, on presence alone (whose presence - the employer or the employee?) In our view the repeal of section 196(2) cannot be taken to have had the effect that employees who had or whose employment had a substantial connection with Great Britain should not be entitled to the rights conferred by the ERA and the ability to assert those rights against their employer in the Employment Tribunal. While the Court of Appeal in Paramount did not limit the relevant jurisdiction by a sufficient or a substantial connection test, it achieved that result by treating the presumption as rebutted but the operation of the broad jurisdiction thus arising as limited by a sufficient connection test upon the basis of which the courts would exercise its discretion. In our judgment, it being accepted that the presumption does not apply in full to the applicability of the rights provided by the ERA but that those rights are not to be regarded as provided to the whole world without restriction, the correct analysis in the present case, as the Employment Appeal Tribunal decided in Jackson, is that the presumption is rebutted but that there is an implied restriction of the applicability of the rights provided by the ERA to cases in which there is a sufficient or substantial connection with the United Kingdom and that there is to be found the limit for which the parties and we have been seeking.
73. Such a test would involve consideration of all factors surrounding the employment, including the place of employment, the residence of the employer and the employee, and matters of that kind - but not the proper law of a contract (section 204 of the ERA). It will be for Tribunals in individual cases to consider the facts as a whole and weigh them so as to decide whether there was or was not the requisite connection with the United Kingdom.

The contract claim

74. The statutory basis for Mr Bishop's claim to the unpaid bonuses has been set out at paragraph 11 above. No such claim was considered by the Employment Appeal Tribunal in Lawson or Jackson; in the latter there was a claim for unlawful deduction from wages which arose under the provisions of the ERA and was not considered separately from Mrs Jackson's unfair dismissal claim. Mrs Jackson had also brought a breach of contract claim; but there was no appeal against the Tribunal's decision upon that claim (judgment paragraph 7).
75. There was, however a breach of contract claim in Bryant; the Tribunal had rejected that claim on the basis that, having determined that Mr Bishop's contract was governed by Italian law, it followed that her breach of contract claim should be determined by the Italian courts. The Employment Appeal Tribunal reversed the Tribunal's decision on this issue, held that the Tribunal's approach was wrong in law and concluded that the claim could be tried in the English courts, by virtue of section 3 of the Employment Tribunals Act 1996 and the Extension of Jurisdiction (England and Wales) Order 1994, could therefore be heard by the Employment Tribunal and on the basis that Article 2 of the Brussels Convention provided for jurisdiction in the UK courts if the respondent was domiciled here; see judgment paragraph 30. The Tribunal in the present case concluded, at paragraph 40, that they had jurisdiction (subject to the forum non conveniens argument) to entertain Mr Bishop's breach of contract claim, brought under the above mentioned statutory provisions, if FT could be validly served with the proceedings and that they could be so served, pursuant to the Civil Procedure Rules, as a company domiciled in and with its registered office in England.
76. There was in this part of FT's appeal no argument as to the principles of jurisdiction. Mr Swift and Mr Fodder agreed that, if the English courts had jurisdiction to try Mr Bishop's contract claim, then by virtue of paragraph 3 of the Extension of Jurisdiction (England and Wales) Order 1994 the Tribunal would have jurisdiction; and service, as in Bryant, posed no problem.
77. The basis of Mr Swift's attack on the Tribunal's decision on this issue was of a very different nature. He submitted that the Tribunal had failed to consider and decide upon FT's submission that, even if FT was Mr Bishop's employer at the date of the dismissal, the obligation in respect of bonus payments lay not on FT as the employer but on FT Inc, who could not be brought within the jurisdiction of the Tribunal and, in any event, was not a Respondent to Mr Bishop's claim.
78. Mr Swift took us to the findings of fact of the Tribunal, at paragraphs 6(xiv) and paragraph 23 of their decision, that the bonus scheme in which Mr Bishop claims to have been entitled to participate was operated by FT Inc and, at paragraph 44, that the bonus scheme was operated by a USA corporation in the USA and would have been paid, had Mr Bishop remained in the USA, in US dollars. On the basis that those were the facts, Mr Swift contends that he put to the Tribunal the argument that any obligation to Mr Bishop in respect of bonus, if FT was the employer, was not that of FT under the contract of employment but that of FT Inc under a collateral contract; and, if such bonus was not paid, Mr Bishop's remedy lay against FT Inc alone. Yet the Tribunal had not addressed this argument; if it had the only realistic conclusion would have been that for which Mr Swift contended.
79. Mr Fodder's submission was that FT's case before the Tribunal had been that Mr Bishop had one contract with FT Inc who was the employer and that that contract covered salary and bonus; and the reason for the absence in the Tribunal's decision of any reference to a possible collateral contract was that that was not the case being advanced. In any event, he submitted, the Tribunal's decision, read as a whole, demonstrated that, having considered the full facts, the Tribunal concluded, in paragraph 24, that Mr Bishop was in all respects an employee of FT during his overseas posting in the USA from 1999, as he had always previously been in earlier postings.
80. We will assume that, albeit as a secondary fall back submission - for his main submission plainly was that FT Inc was Mr Bishop's employer at the material time - Mr Swift did suggest that even if FT was the employer, the obligation in respect of the bonus lay on FT Inc. In our judgment, however, the Tribunal's decision demonstrates that they regarded the obligations arising from Mr Bishop's employment, including his entitlement to bonus, as owed by FT as the employers. The fact that the bonus scheme was operated by FT Inc in the USA and paid in US dollars did not amount to any strong indication to the contrary; when Mr Bishop went back to the USA from Singapore at the end of 1998 FT, in seeking a visa for him, wrote in a letter dated 9 December 1998 which was before the Tribunal:

"FT Publications Inc is the group company which deals with the commercial operations of the Financial Times Newspaper in the United States."

The letter to Mr Bishop offering him the position in the USA, dated 15 December 1998 and addressed to the Singapore office, referred to the bonus as part of Mr Bishop's terms and conditions of employment in that position. That letter, too, was before the Tribunal. There was plainly material before the Tribunal from which they could conclude that FT Inc were to pay bonuses, under arrangements between them and FT, to Mr Bishop on behalf of FT and that the primary obligation in respect of the bonus lay on FT. The Tribunal did not spell that analysis out in paragraph 24 of their Decision; but they expressly said that they had looked at the terms and conditions agreed at the time of Mr Bishop's return to the USA and to all the circumstances and could not find any intent on the part of the parties to depart from previous procedures; there was no suggestion that, in any previous post, Mr Bishop had to look for any of the remuneration arising out of his employment to anyone other than FT. In our judgment the Tribunal decided and were entitled on the facts to decide that all the obligations arising out of Mr Bishop's employment at the date of dismissal lay on FT.

81. If they did not so decide, Mr Swift and Mr Fodder agreed that all the material facts were before us and that we were in good a position as were the Tribunal to decide on the collateral contract issue. In the light of the findings of fact which the Tribunal made and of the terms of the documents to which we have been referred and in the absence of any other document setting out Mr Bishop's terms and conditions of employment from his return to the USA onwards we have no doubt that the correct analysis of the contractual situation is that FT, as Mr Bishop's employer, promised that he would be paid such bonuses as arose under the relevant scheme and that any payments to be made by FT Inc in the USA would be paid on behalf of FT.
82. Accordingly the appeal in relation to the breach of contract claim fails.

Conclusions

83. In relation to the unfair dismissal claim, our conclusion is that the Tribunal erred in holding that there was jurisdiction to entertain Mr Bishop's complaint on the basis which they set out. The true test is the substantial connection test which we have set out above. Mr Swift submitted that, if we reached this conclusion, all the facts were before us and we could determine whether the circumstances of Mr Bishop's claim were such as to bring it within that test or not; Mr Fodder submitted that there would have to be a remission for the Tribunal to determine on the facts whether Mr Bishop's claim fell within that test or not.
84. In our judgment we cannot and should not make the factual assessment ourselves. There are various factual questions e.g where Mr Bishop would have gone at the end of his posting in the USA,or had his visa been for some reason withdrawn, which have not been resolved; and we are not in a position to be so confident of the correct assessment of the facts overall as to take the necessary decision when we only have before us the Tribunal's findings of fact and have heard none of the evidence (which we are told was very short and lasted only about half a day). Accordingly there must be a remission. The parties were agreed that, if there was to be any remission of any of the issues arising in this appeal, it should be to a fresh Tribunal.
85. Accordingly the appeal, insofar as it relates to the unfair dismissal claim, is allowed and the issue of jurisdiction is remitted to a differently constituted Tribunal to be re-heard in accordance with the terms of this judgment or, if by then it is available, the terms of the decision of the Court of Appeal in Lawson, unless, of course, that decision renders such remission unnecessary.
86. In contrast, the appeal against the Tribunal's conclusion upon Mr Bishop's breach of contract claim is dismissed.