United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	Miss NAOMI LING (of Counsel) Instructed by: Messrs Zimmers Solicitors 34 Corringham Road LONDON NW11 7BU
For the Respondent	No appearance or representation by or on behalf of the Respondent

SUMMARY

Working Time Regulations

Unfair Dismissal – Exclusions including worker/jurisdiction

The claimant, a lorry driver, worked mainly in Austria and Germany, but had a contract of employment with a company registered in England. The contract identified English law as the proper law and sought to confer exclusive jurisdiction on the English courts. The claimant lodged a number of claims in the Employment Tribunal for constructive unfair dismissal, failure to pay holiday pay, unlawful deductions from wages and breach of contract. At a preliminary hearing the issue arose whether the territorial scope of the statutory provisions extended to the claimant. The Tribunal concluded that they did not, principally by applying the approach adopted by the House of Lords in Lawson v Serco Ltd [2006] ICR 250.

In a separate and later decision another Chairman considered whether the claim for breach of contract was in time, and held that it was not. It is accepted that even if the Chairman at the earlier hearing had accepted jurisdiction, this ruling would have also applied to the statutory claims and they could not have been pursued in any event.

Both rulings are challenged on appeal. The EAT held that the Tribunal had erred in its approach to the question of extending time and the issue was remitted to a fresh Tribunal. As to the territorial scope issue, the EAT held that the Tribunal had been right to reject the claims for unfair dismissal and unlawful deduction from wages, and that the principles enunciated in the Serco case were properly applied. However, the EAT held that the claimant could, subject to succeeding on the time point, pursue the claim for holiday pay. There was a directly effective right derived from the European Directive and this could be given effect by construing the Working Time Regulations in a manner which was compatible with the terms of the Directive. Even if the statutory provision would otherwise have been limited to those who had a base in the UK, the effect of EU law was that it had to be extended so as to apply also to those who had rights conferred upon them by EU law.


 


THE HONOURABLE MR JUSTICE ELIAS (PRESIDENT)

1. I have heard two appeals from two separate decisions of the Employment Tribunal, involving different chairman.
2. In the first, the Tribunal held that claims for unfair dismissal and unauthorised deduction from wages, including failure to make holiday pay, could not be pursued because the claimant was not based in the UK. The Tribunal held that as a consequence it had no territorial jurisdiction to hear any of these statutory claims.
3. In the second, concerning a claim for breach of contract in respect of which it was conceded that the Tribunal did have jurisdiction, it was held that the claim was out of time and the Tribunal declined to extend time. In fact this finding would also have defeated the other statutory claims had they not been dismissed in any event.
4. The claimant, as I shall continue to call him, appeals both decisions.
5. The respondents have failed, despite reminders, to respond to the time appeal and they have now been debarred from those proceedings. They were not debarred from the territorial jurisdiction proceedings but have not appeared to argue the case. (Presumably this is because the first respondent was dissolved - according to the claimant in order to evade liability. Indeed, I am told that at the instigation of the claimant, an order has been made (but not yet sealed) to restore it to the register). Accordingly, in both cases I only had the benefit of hearing legal argument from the claimant's representative. He was represented by two different counsel in each appeal. Ms Ling made submissions on the time appeal, and Ms Kreisberger on the territorial jurisdiction appeal.
6. I will deal with each appeal separately. Logically, the time point should be considered first since if that fails then it is accepted that the other appeal is irrelevant.

The time appeal.

7. Technically, this is an appeal only against the decision of the Employment Tribunal which held that it had no jurisdiction to hear the claimant's claim for breach of contract. The reason was that it had been lodged out of time and the Tribunal found that it had been reasonably practicable for the claim to have been presented within time. As I have indicated, and as the claimant accepts, the decision effectively bars the other claims also, since the same limitation rules apply to each of them.
8. The claimant appeals that finding. He accepts that the claim was presented out of time but submits that the Tribunal erred in law in refusing to extend the limitation period of three months.
9. The facts briefly were as follows. The claimant is a German national who lived in Germany throughout the term of his employment with the respondent. He was employed by the respondent company through a Mr Tiefenbacher, an Austrian citizen based in Austria. The respondent was company registered in the UK. The claimant's contract came to an end on 14 February 2006. He consulted two separate German lawyers about money which had been wrongfully withheld from him and was advised to pursue his claim in Austria. He contacted an Austrian lawyer, Dr Frankenstein, who in turn advised him to contact an English solicitor because he considered English law to be the applicable law.
10. The claimant was insured for his legal expenses. Dr Frankenstein, had returned the relevant papers to the claimant by the letter dated 9 March, when he advised him to see English lawyers. Dr Frankenstein wrote to the claimant's Insurers on the same day, telling them of the advice he had given. The Insurers wrote to Dr Frankenstein on 13 March, requesting the return of the documents relating to the claimant's case. They had not appreciated that they had been sent directly to the claimant. There was then some delay before Dr Frankenstein told them that he had already returned the papers to the claimant. Apparently this was because Dr Frankenstein had been ill.
11. The Insurers then instructed London lawyers on 4 May. The new solicitors were not clear as to the nature of the claim and so they wrote back to the Insurers on 9 May 2006. They requested the claimant's telephone number, which was sent to them on 15 May. On that date, Ms Weber from the new solicitors, telephoned the claimant and asked to speak to him. He was uncommunicative. He said that he had already explained his difficulties to other firms of solicitors and that he had prepared a detailed statement for them which she should obtain. Ms Weber gave evidence that the claimant appeared agitated at having to explain his position again.
12. On 19 May the claimant's solicitors wrote to the Insurers asking for more information. Ms Weber had not been told by the claimant that the papers had been returned to him. They asked the Insurers again on 24 May and subsequently Ms Weber contacted Dr Frankenstein by telephone on 31 May. Dr Frankenstein sent on that day a summary of the statement, setting out the nature of the claimant's complaints
13. The claim was lodged on 5 June. That is almost a month out of time as all parties recognised. The Tribunal set out the relevant legislation and observed that the issue was whether it was not reasonably practicable for the claimant to present his case in time. They referred to various authorities. The Tribunal noted that the Court of Appeal in Palmer v Southend On Sea Borough Council [1984] IRLR 419 had held that 'reasonably practicable' meant something akin to 'reasonably feasible'. Moreover, ignorance of the time limit does not necessarily render it not reasonably practicable to present a claim in time. The issue was not simply what the employer actually knew but what knowledge he would have had had he acted reasonably in all the circumstances: see Marks & Spencer plc v Williams-Ryan [2005] EWCA Civ 470, para 21.
14. They summarised the argument for the claimant - who was not, however, present to give evidence before them - that he was a shy and simple man and had acted swiftly to obtain redress for what he perceived to be his employer's failings.
15. The Tribunal concluded that they were not satisfied that it was not reasonably practicable to present his claim in time. They summarised their reasons at paragraph 14 of the Decision in the following way:

"The claimant did not attend to give evidence. He could not therefore explain the delay, nor was he able to explain his beliefs or any ignorance of his rights, if indeed he was so ignorant. It is not sufficient for his solicitor to state that he is a shy and simple man. I cannot from that infer that he was ignorant of his rights or what he believed, let alone what explanation there was for his inaction between 9 March and 28 April. From the evidence before me, it was impossible for me to assess his state of knowledge or determine that it was not reasonably feasible to present his complaint in time. Since the burden of proof is on the Claimant, I am driven to the

conclusion that he has failed to discharge it. Thus, I must find that it was reasonably practicable to have presented the complaint within the 3-month time limit and it consequently follows that I find that the Tribunal has no further jurisdiction in this matter."

Grounds of appeal.

16. It is submitted that the Tribunal came to a conclusion that was obviously wrong and was perverse on the basis of the evidence before it. The Chairman failed, it is said, fairly to recount material parts of the evidence. In particular, criticism was made of the comment that the claimant had been inactive between 9 March and 28 April; this was unfair to the claimant. The evidence from the claimant was that he had telephoned the Insurers on 9 March, or shortly thereafter, and they had told him that they would take care of the next stage of the case. That much is clear from the witness statement that was provided to the Tribunal and was not challenged.
17. The claimant had reasonably left matters in the hands of his Insurers. Given that he was away from home, on the road much of the time, and spoke no English, it was unreasonable to think that he could have done more to bring his claim to a head. Moreover, the evidence of Ms Weber was that Mr Frankenstein had been ill and had taken time to respond to the request for the documents. The claimant had acted very speedily originally when initiating the claim, as he had once his legal insurers had contacted him to ask for the papers. It is submitted that had the Chairman properly appreciated the full factual context then the only reasonable inference was that the claimant had all times acted with all reasonable despatch and that it was not reasonably practicable to proceed with his claim in time.

Conclusion.

18. Although I sympathise with the Chairman who was given a paucity of evidence to resolve this issue, in my judgment the she did fail fairly to reflect the particular difficulties facing this claimant, and appear to have acted on the premise that he was simply indifferent to what happened to his case once the insurers had received the papers. It is true that he did not give evidence, but he had produced a witness statement and no request to cross examine him was made. Bearing in mind the overriding objective, I do not think that Tribunal was entitled to hold it against him that he had not given oral evidence; the cost incurred in order to appear before the Tribunal to give what was apparently uncontentious evidence was disproportionate. It is with respect unrealistic to suppose that he would have had any idea about time limits in English law, or could do much about it if he did, given his lack of English and ignorance of English law. He would be bound to rely on his advisers. I accept the submission of Ms Ling that had the issue been properly considered, it is difficult to say in the particular circumstances of this case that the claimant himself acted unreasonably or with a lack of urgency , or that it was not reasonable for him to rely upon the insurers and his legal advisors.
19. The issue that remains is whether he is bound by the acts of his insurers, and whether they may have acted unreasonably. Ms Ling says that it would be unjust to treat their actions as binding him even if any criticism could fairly be placed at their door, which she disputes. I see the force of those arguments, but I have with reluctance concluded that I cannot properly determine them on the material I have. The matter will need to be remitted to another tribunal to decide that issue.

The Territorial jurisdiction appeal.

20. I turn to consider this aspect of the appeal. It may be that this judgment will prove to be immaterial if on remission the new tribunal finds that the claims were indeed out of time. However, I have heard submissions from the claimant on the point, and there seems little purpose in requiring him to return to this court if he is successful with respect to the time point. Accordingly, and bearing in mind the overriding objective, and in particular the need to operate so as to save costs if possible, I have decided to give judgment on this appeal now.
21. I have already set out the basic facts but will briefly supplement them with matters material to this particular appeal. Mr Bleuse was initially employed by WHU Service Limited, a company owned by the second respondent, Mr Tiefenbacher. He signed an employment contract.
22. WHU Service Limited is incorporated in England, and its address is in Suffolk. WHU ceased to trade. However, Mr Tiefenbacher, Mr Bleuse's boss, continued to provide work on the basis of an unsigned employment contract, in identical terms to the earlier contract, through what appears to be another of his companies, MBT Transport Limited. That is also a company registered in England, and based at the same address in Sudbury in Suffolk as WHU. Paragraph 17 of the contract, which is relied upon in this case by the claimant, says this:

"This agreement is to be governed by and construed in accordance with English law and the English courts are to have exclusive jurisdiction to settle any dispute in connection with this agreement."

23. The claimant worked throughout mainland Europe, particularly Austria and Germany, but never in the UK. Subsequently he resigned in circumstances which he alleges amounted to a constructive unfair dismissal with effect from 14 February 2006. He then initiated claims in June for unfair dismissal, breach of contract, unlawful deduction of wages, and failure to pay holiday pay. The respondent company contended that none of the statutory rights extended to him and that therefore the Tribunal had no jurisdiction to consider these claims. It was determined that the question of territorial jurisdiction should be heard as a preliminary issue.

The Tribunal's decision.

24. The Tribunal concluded that the claimant could not pursue his statutory claims for unfair dismissal or unlawful deductions because following the speech of Lord Hoffman in the House of Lords in Lawson v Serco Ltd [2006] ICR 250, they did not extend to someone working in his position. He did not fall within the terms of those who can be considered to be based in the United Kingdom and accordingly he could not claim that his dismissal was unfair, nor that there were unlawful deductions.
25. The Tribunal, therefore, held that it had no jurisdiction to hear these claims. The Tribunal quoted the following passage from the speech of Lord Denning in Todd v British Midlands Airways Ltd [1978] IRLR 370,371, which Lord Hoffman in the Serco case described as providing "the most helpful guidance" for determining the statutory jurisdiction (para 29):

""A man's base is the place where he should be regarded as ordinarily working, even though he may spend days, weeks or months working overseas. I would only make this suggestion. I do not think that the terms of the contract help much in these cases. As a rule, there is no term in the contract about exactly where he is to work. You have to go by the conduct of the parties and the way they have been operating the contract. You have to find at the material time where the man is based."

26. The Tribunal concluded that since in this case no work had ever been undertaken in the United Kingdom, there could be no basis at all upon which it could be said that this was the claimant's base. The only connection with the United Kingdom was that he had an unsigned contract with a UK registered company.
27. Although the Serco case was only concerned with the right to claim unfair dismissal, it was not suggested that a different principle would apply to the deduction of wages, and indeed both provisions are found in the Employment Rights Act.
28. The holiday pay claim was rejected because regulation 1(2) provides in terms that the regulations "extend to Great Britain only."

The grounds of appeal.

29. The grounds of appeal are wide ranging. Specifically with respect to the holiday pay it is submitted that section 1(2) does not answer the question of the territorial scope at all. A similar argument was advanced and rejected in the Serco case with respect to an similarly worded section 244 of the Employment Rights Act. Lord Hoffmann held that it simply meant that it forms part of the law of Great Britain and did not, for example, extend to Northern Ireland. But it does not identify what connection the employee must have with Great Britain. I agree with that submission; it is a short answer to this part of the appeal. It may be, however that the same limitation applies to the regulations as to the rights given by the Employment Rights Act, in which case the claimant would have failed in any event for the same reason as the Tribunal held that he did not have a right to claim the other statutory rights.
30. As to the Tribunal's approach to those rights, the first ground of appeal is that the Tribunal applied the wrong test to determine the question of jurisdiction because it failed to have regard to clause 17. It is alleged that this is crucial to the claim. The court in Serco was not faced with a choice of law clause. Rather, it is said, the issue in that case was whether, in the absence of such a choice of law clause, the right to pursue unfair dismissal claims could extend beyond the employee's base. Where, however, the parties have chosen English law as the applicable law then the base test formulated in Serco does not arise and the statutory rights are automatically enforceable.
31. Second, it is alleged that because of the peripatetic nature of the claimant's employment, the effect of Articles 18 to 21 of the Brussels' Regulation is to give the English courts exclusive jurisdiction with respect to any disputes arising in respect of the contract of employment. Consequently, it is asserted that in declining jurisdiction, the Tribunal were barring the claimant from exercising his employment rights altogether.
32. The third ground relates to the significance of the Rome Convention. This is a Convention concerning the law applicable to contractual obligations which has been implemented into UK law by Schedule 1 to the Contracts (Applicable Law) Act 1990. Article 6(1) provides that "a choice of law made by the parties shall not have the effect of depriving an employee of the protection afforded to him by the mandatory rules of law which would be otherwise be applicable...in the absence of choice." Article 6(2) then sets out how to determine which system of law provides the source of the mandatory rules. Here, it is submitted, the Tribunal's decision has the opposite effect to Article 6(1) because it deprives the appellant of the statutory protection afforded to those who have chosen the UK law as the relevant law to govern the contract of employment. Furthermore, even in the absence of any choice of law, English law would have been the applicable law under Article 6. This argument is combined with the submission that the UK alone has jurisdiction to hear the claims. It is said that if the UK courts do not give effect to the mandatory rights, there is no other system of law protecting that right.
33. The fourth ground seeks to distinguish between the position with respect those claims which involve directly effective rights conferred by EU law, and those which are purely domestic. It is submitted that Serco was concerned with pure domestic rights, but that different principles ought to apply in this case with respect to directly effective rights conferred by EU law, whether or not the UK courts have sole jurisdiction to hear the claim. (Initially, as I understood the argument, emphasis was placed on the fact that the UK court had sole jurisdiction, but subsequently it was submitted that this principle should apply whenever the court was properly exercising jurisdiction, whether it alone had jurisdiction or not.) In particular it is submitted that the right to receive pay for annual leave derives from Article 7 of Council Directive No 2003/88/EC concerning certain aspects of the organisation of working time (the Working Time Directive). This is not simply a domestic right but reflects a right conferred upon anyone employed in the European Union.
34. Accordingly, Ms Kreisberger says that the Employment Tribunal's decision to decline jurisdiction denies the appellant an effective remedy in respect of the rights conferred by EU law. In this context it was further submitted that unfair dismissal is the domestic implementation of a right derived from EU law, namely the right not to be unjustifiably dismissed found in Article 30 of the Charter of Fundamental Rights, and that the courts similarly had to construe the territorial scope of unfair dismissal law so as to give effect to that right. The approach in Serco has to be modified to that extent. It was accepted, however, that the laws prohibiting deductions from wages were purely domestic and could not be said to have their origin in any EU instrument.
35. Not all of these grounds of appeal were in fact advanced below. In particular, Ms Kreisberger concedes that no distinction was drawn between the right conferred by EU law and purely domestic rights. It was apparently assumed that the same rule applied to them all. This creates certain difficulties because it is only in exceptional circumstances that the EAT will hear fresh points not argued below. The relevant authorities have recently been reviewed in a valuable judgment of the EAT (HH Judge McMullen presiding) in Secretary of State for Health v Rance [2007] IRLR 664, esp. para.50. As that case makes clear, it is only in exceptional cases that permission to run a new point will be granted, and very rare indeed where this would involve having to remit the matter to the Tribunal to make fresh findings of fact. That principles are material with respect to certain of the grounds now argued here, as I demonstrate below.

The relevant law.

36. Section 94(1) of the Employment Rights Act 1996 provides that "an employee has the right not to be unfairly dismissed."
37. Section 204 of the 1996 Act is as follows:

"(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.

38. The law relating to unlawful deductions is found in Part II of the 1996 Act. It forbids deductions from the wages due to a workman unless certain conditions are met. There is no reason to suppose that in the normal way the territorial scope would be any different for this right than it is for other rights conferred by that Act.
39. The right to holiday pay is conferred by the Working Time Regulations 1998. Regulation 13 confers the right to annual leave, and regulation 14 provides for compensation to be paid if, on termination of the contract, the worker has outstanding holiday due. These Regulations give effect to Council Directive 2003/88/EC on working time (which replaced an earlier Directive in 1993).
40. In the Serco case, which involved three appeals heard together, the House of Lords had to consider the territorial scope of section 94, which confers the right to unfair dismissal. It was recognised that, read literally, there was no limitation on the territory where an employee had to be based in order to bring an unfair dismissal claim pursuant to section 94. There had formerly been a limitation in section 196(2) of the Act (which also in terms applied to the rights conferred by Part II of the Act) but that had been repealed in 1999 to give effect to the Posted Workers Directive. However, Lord Hoffman (with whose speech Lords Woolf, Rodger, Walker and Lady Hale concurred) indicated that, as all counsel in the case had conceded, it was necessary to imply a limitation. The limitation which he considered to be appropriate was to require that the employee's base was in Great Britain. We have already set out the passage identifying that principle.
41. Lord Hoffmann also recognised that certain peripatetic workers would fall within the scope of the section. These would include expatriate workers working abroad and also certain persons working abroad for a foreign company. However, as his Lordship made clear, merely working abroad for a foreign company would not be enough:

37. First, I think that it would be very unlikely that someone working abroad would be within the scope of section 94(1) unless he was working for an employer based in Great Britain. But that would not be enough. Many companies based in Great Britain also carry on business in other countries and employment in those businesses will not attract British law merely on account of British ownership. The fact that the employee also happens to be British or even that he was recruited in Britain, so that the relationship was "rooted and forged" in this country, should not in itself be sufficient to take the case out of the general rule that the place of employment is decisive. Something more is necessary.

 38. Something more may be provided by the fact that the employee is posted abroad by a British employer for the purposes of a business carried on in Great Britain. He is not working for a business conducted in a foreign country which belongs to British owners or is a branch of a British business, but as representative of a business conducted at home. I have in mind, for example, a foreign correspondent on the staff of a British newspaper, who is posted to Rome or Peking and may remain for years living in Italy or China but remains nevertheless a permanent employee of the newspaper who could be posted to some other country. He would in my opinion fall within the scope of section 94(1)

Conclusions.

42. The finding of the Tribunal that the employee did not have his base in the UK seems to me plainly justified. Lord Hoffman indicated that the mere fact that the employer was a company registered in the UK would not be sufficient to establish this as the employee's base. The claimant does not fall into the exceptional category of peripatetic workers who can bring themselves within the jurisdiction, or at any rate the employment Tribunal was entitled to take that view. True it is that the claimant worked for a company based in the UK, but he did not operate out of the UK and had virtually no connection at all with it.
43. The first question raised on this part of the appeal is whether clause 17 of the agreement which makes English law the proper law of the contract, alters the picture. I am satisfied that it does not. Section 204, not referred to by the appellant, makes it plain that the proper law of the contract is of no materiality when considering the reach of the statutory rights. Moreover, precisely this same argument has been rejected twice by this Tribunal, both in the Serco case when that case was heard by the EAT (EAT/0018/02) and also by the EAT in Bishop v Financial Times [2003] All ER (D) 359, BAILII: [2003] UKEAT 0147_03_2511, (HH Judge Burke presiding) In the latter case the EAT said this (paras 54-55):

"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.

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."

I respectfully agree.

44. The point was not appealed to the Court of Appeal in Serco, although Pill LJ, giving the only judgment of the Court, observed that section 204(1) was not inconsistent with the conclusion that the Act applies only to employment in Great Britain: see [2004] IRLR 206 para.18. It seems to me that the section would be inconsistent with that conclusion if the legislation inevitably applied whenever English law was the proper law of the contract. Moreover, the contract in the Serco case was in fact found to be governed by English law, as a perusal of the decision in the EAT makes clear. Had that fact been decisive, I have little doubt that the Court of Appeal and/or the House of Lords would have said so, even although it was not specifically argued on appeal, because it would have been the short answer to the issue in the case. Moreover, Lord Hoffmann expressly approved the judgment of the EAT in the Bishop case.
45. In my judgment the earlier decisions were right. Parties cannot by agreement extend the scope of the rights which Parliament has conferred. The only issue is whether, as a matter of fact, the employee is based in the UK and neither the terms of the contract nor its proper law determine that question.
46. The second ground relies upon the premise that the sole jurisdiction rests with the UK. Even if that is correct - and I examine the premise below - that would not of itself confer any rights upon the claimant which would not otherwise exist. The Brussels' Regulations are concerned with which courts should hear a claim; they do not affect the content of the substantive law applicable to the claim itself. Accordingly, the fact that the English courts have jurisdiction does not alter the scope of the rights conferred by English law itself. The position is no different because the court exercises exclusive jurisdiction.
47. Nor do I consider that the third ground, praying in aid Article 6 of the Rome Convention, takes matters any further. That confers mandatory rights on an employee which cannot be defeated whatever the choice of law of the parties. The protected mandatory rights are those derived from the system of law that would apply absent a choice of law clause. Those rights will constitute a potentially applicable body of law irrespective of the proper law of the parties. But that principle does not assist at all in determining the scope or reach of the rights so identified: see the observations of Pill LJ in the Serco case in the Court of Appeal, para.19. Nothing in the Convention, nor the legislation giving effect to it, has any bearing on the content of the mandatory laws. Not can the scope of the section be affected by the fact that the English courts alone have jurisdiction.

Do the English courts have exclusive jurisdiction?

48. I should add that I am not satisfied that the English courts have exclusive jurisdiction to hear these claims (although they plainly have jurisdiction since the employer is domiciled here, being a company incorporated in England). The fact that the contract purports to give exclusive jurisdiction to the English courts is ineffective with respect to this kind of contract, as Article 21 of the Brussels' Regulations makes clear. The relevant courts to exercise jurisdiction are identified in Articles 18 and 19 which are as follows:

"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

An employer domiciled in a Member State may be sued:

1. in the courts of the Member State where he is domiciled;

or

2. in another Member State;

(a) in the courts for 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."

49. The argument is that the peripatetic nature of the claimant's duties means that he does not have a base in any other country within the meaning of Article 19(2)(a), and the business in which he is employed is situated in the UK. So it is submitted that all the factors point to the jurisdiction being exercised by the English court. That was apparently the view of the Austrian lawyer. That may very well be the correct answer, but I do see how I can be satisfied that it is, or that either condition necessarily applies. There is no finding on these matters by the Tribunal below, and I am not in a position to determine them on the factual material before me. In particular, I note that the ECJ had given a very wide meaning to the concept of the place where an employee habitually works: see Rutten v Cross Medical Ltd [1997] ICR 715. It is the place where he has established the centre of his working activities.
50. It is possible that a careful and fuller analysis of the relevant facts would demonstrate that, for example, Austria was a place where he habitually worked, in which case the courts of that country would have jurisdiction to hear his claim. Furthermore, since this argument was not advanced below, and fresh evidence would be required to determine it, I would not allow it to be run now.
51. Ms Kreisberger submits that in refusing to allow it to be advanced, I am denying her an effective remedy and that the Employment Tribunal was obliged to raise any point involving EU law of its own motion. I do not accept that. The decision of the ECJ in Van Schijndel & Van Veen v Stichting Pensioenfonds voor Fysiotherapeuten ; allows domestic procedural rules of this nature to be applied provided that they do not treat rights derived from EU law less favourably than those conferred by the domestic law, and do not make it impossible in practice to enforce EU rights. I do not accept that either condition applies here. In the event, in my view the issue is immaterial because nothing turns on the fact that the UK courts have exclusive jurisdiction, even if that be the case.

The rights derived from European law.

52. The last ground of appeal is that whatever the position with purely domestic rights, a different principle applies when directly effective Community rights are in issue. It is alleged that this principle plainly applies to the right to holiday pay. The decision of the European Court of Justice in R v Sec of State for Trade & Industry ex parte Broadcasting Entertainment Cinematograph & Theatre Union [2001] IRLR 559 confirmed that the rights conferred by Article 7 of the Directive are sufficiently precise and clear to be capable of having direct effect (see para.34). In a claim against the state or an emanation of the State the Directive can be directly relied upon and any incompatible domestic laws will simply have to be disapplied. There is, however, a limitation on the ability of the courts to give effect to directly effective rights in a case such as this because it is also well established that the direct effect of a Directive cannot be pleaded against private bodies: see Marshall v Southampton & South West Hampshire Area Health Authority (Teaching) [1986] ECR 723. However, that does not affect the principle of harmonious construction which gives indirect effect to the right. This requires that the domestic courts must, if at all possible, construe the relevant domestic laws so as to give effect to the EU right. This is the well known Marleasing principle: Marleasing SA v La Commercial Internacionale de Alimencation SA [1990] ECR I-4135. This principle applies not only to the law passed to give effect to the EU right, but to the body of domestic law as a whole: see Pfeiffer v Deutches Rotes Kreuz, Kreisferband Waldshut [2004] ECR I-8835. It is only if the domestic legislation cannot sensibly be construed compatibly with European law that the claimant will be denied his rights.
53. In this case Ms Kreisberger submits that there is no difficulty about construing the relevant provisions of the Working Time Regulations, which transpose the Directive into domestic law, in a manner which gives effect to the EU rights. As with the unfair dismissal provisions, there is no express limitation on the scope of the Working Time Regulations. Any limitation has to be implied, and the implication can allow for the enforcement of EU rights.
54. The premise underlying this argument is that English law - and in particular the Working Time Regulations - is the relevant domestic law for giving effect to the directly effective right. In the circumstances of this case, I think that is right, but it is important to emphasise that this is not be virtue of the fact that the English court is exercising jurisdiction (even if it exclusively has jurisdiction.) In different circumstances foreign law might be the appropriate domestic law to consider. Assume, for example, that the claimant had a contract to drive in Austria and the proper law of the contract was Austrian. He could still bring a claim in the English courts, since the company is domiciled here, but the relevant body of law to be applied would surely be Austrian law (although of course there would need to be evidence about it.) Potentially it could be significant whether it is English or Austrian law if, for example, Austria had not transposed the rights conferred by the Directive into their law, or if their domestic statute could not be construed so as to give effect to the directly effective right.
55. However, in this case English law is the proper law of the contract and that brings in its train the statutory rules relating to the contract. (This is subject to the qualification that an employee can take advantage of more favourable mandatory laws conferred by the legal system of another EU state if, absent the choice of law clause, that system would apply to the contract by virtue of Article 6(2) of the Rome Convention: see Dicey, Morris and Collins "The Conflict of Laws", 14^th edn, 2006, para.33-070). As I have said, this does not mean that this body of law is necessarily applicable to the claimant; whether he can take advantage of it depends upon the proper reach of the statutory provision in issue.
56. It follows in my judgment that at least in circumstances where either English law is the proper law of the contract, or where it provides the body of mandatory rules applicable to the employment relationship by virtue of Article 6(2) of the Rome Convention, an English court properly exercising jurisdiction must seek to give effect to directly effective rights derived from an EU Directive by construing the relevant English statute, if possible, in a way which is compatible with the right conferred.
57. In this case, absent any question of EU rights, I would accept that there is no reason to think that the territorial reach of these Regulations would be any different to the limitation found in the Employment Rights Act as interpreted in Serco. However, in my judgment the implied limitation that might otherwise be deemed appropriate must be modified so as to ensure that directly effective rights can be enforced by the English courts. That is so even if on an application of the Serco principles, the base would not be Great Britain. The scope of the provision must be extended to give effect to the directly effective rights under EU law. That law operates as part of the system of domestic law and must be given effect accordingly. I accept the argument of Ms Kreisberger that if this were not done it would mean that the principle of effectiveness would not be satisfied: there would be no effective remedy for a breach of the EU right.
58. As I have said, there was no reliance on any submission based on directly effective rights in the Employment Tribunal. However, I think that this is a case where I should allow the point to be argued now. Both parties below acted on the assumption that English law was the appropriate law relating to the relationship, as I think it is. The fresh argument is then simply a matter of law, determining whether the Working Time Regulations can be construed compatibly with the right to holiday pay derived from the Directive. No further finding of fact is necessary and in my judgment it would be unjust to deny the claimant the opportunity to advance that claim.
59. I am conscious that there are two decisions of the Employment Appeal Tribunal, namely Ashbourn v Department of Education and Skills UKEAT/0123/07, BAILII: [2007] UKEAT 0123_07_2611 and Williams v University of Nottingham [2007] IRLR 660, in which statutes which implement rights derived from European law have been held to be subject to the same base test as was adopted by Lord Hoffman in Serco.
60. In Williams the case concerned the question whether a disability discrimination claim could be advanced by an employee who worked in Malaysia. Although the Disability Discrimination Act, unlike the Employment Rights Act, does expressly define its scope, the EAT held that the language used by Lord Hoffmann in Serco was so similar to the statutory language describing the scope of the Act that a similar approach should be adopted. It is, however, material to note that no argument appears to have been advanced at all (and maybe none was available) on the basis that there was a right derived from Community law which was being defeated by this construction of the statute.
61. The Ashbourn case concerned the construction of the Fixed Term Employment Regulations. Like the model of the Employment Relations Act, it is silent as to its geographical reach. An argument was advanced to the effect that since the regulations implemented a European Directive the statute must be construed differently to that adopted for unfair dismissal claims in Serco. The EAT (HH Judge Clark presiding) rejected that argument. I respectfully agree that that factor is not of itself a justification for construing the statute differently than would otherwise be the case. However, that does not mean that the courts can continue to adopt the same construction when directly effective rights are in issue. They then must seek to construe the provision so as to give effect to those rights.

Unfair dismissal

62. Ms Kreisberger accepts that the legislation relating to unlawful deductions cannot be construed in this way because it has no origin in EU law. However, she does submit that the law of unfair dismissal can also be seen as implementing a material EU right, or at least something closely analogous to it. She.contends that such a right is conferred upon the claimant pursuant to the Charter of Fundamental Rights. Article 30 provides:

"Every worker has the right to protection against unjustified dismissal in accordance with Community law and national laws and practices."

63. I was referred to two cases in the House of Lords where some reliance was placed upon the Charter. In the first, R (on the application of Hooper and others) v Secretary of State for Work and Pensions [2005] UKHL 29; [2006] 1 All ER 487 Lord Scott referred to Article 21 of the Charter, relating to prohibition against discrimination, but purely for the purpose of demonstrating that Article 14 of the European Convention on Human Rights was drawn more narrowly.
64. Again, in Sepet v Secretary of State [2003] UKHL 15 Lord Hoffman made reference to Article 10(2) of the Charter relating to the right to conscientious objection, as well as referring to other documents emanating from Europe, but only in the context of establishing that there was no core human right to refuse military service on conscientious grounds. In my judgment, these dicta are of no relevance at all to the argument being advanced here.
65. Ms Kreisberger also referred me to the case of European Parliament v Council of the European Union [2006] ECR I-5769 where the status of the Charter was discussed. The Court said this (para 38):

"The Charter was solemnly proclaimed by the Parliament, the Council and the Commission in Nice on 7 December 2000. While the Charter is not a legally binding instrument, the Community legislature did, however, acknowledge its importance by stating, in the second recital in the preamble to the Directive, that the Directive observes the principles recognised not only by Article 8 of the ECHR but also in the Charter. Furthermore, the principal aim of the Charter, as is apparent from its preamble, is to reaffirm 'rights as they result, in particular, from the constitutional traditions and international obligations common to the Member States, the Treaty on European Union, the Community Treaties, the [ECHR], the Social Charters adopted by the Community and by the Council of Europe and the case-law of the Court .. . and of the European Court of Human Rights'.

66. In my judgment it is impossible to say that the unratified Charter confers any directly effective rights on anyone. Indeed the fact that, as the ECJ says, it is not a legally binding instrument seems to me to make the contrary argument impossible to sustain. No court has accepted an argument that the provisions of this unratified Convention (at least unratified at the time the issues in this case arose) have conferred any enforceable rights on European citizens.

I therefore reject this part of the argument.

Conclusions.

67. The case should be remitted to a fresh Tribunal to determine whether the claimant can establish that his claims should be heard, notwithstanding that they were not lodged within the three months period.
68. If he can, then the Tribunal has jurisdiction to hear both his contract claim and his claim for unpaid holiday pay. Given that the evidence relating to these claims will be very limited, the Tribunal might consider hearing the jurisdiction issue to be followed immediately by the substantive hearing if it takes the view that it has jurisdiction. That would appear to be a cost effective procedure.