English employment law abroad

When does an employee who does not ordinarily work in the UK have UK employment rights?

Since the requirement for a person to ordinarily work in the UK for the purposes of bringing an unfair dismissal claim was removed from the Employment Rights Act in 1999, English courts have struggled to determine the answer to this question.

The courts have consistently shied away from setting out an exhaustive test, instead defining various categories to cover most situations while making it clear that there might be scenarios that would not fit neatly into any of those categories.

A "connection" test has evolved to determine whether or not, in any particular situation, a claimant ought to be allowed to benefit from unfair dismissal and discrimination rights protection. Essentially the question asked by the court is whether the employee's connection with Great Britain is sufficiently strong that Parliament would have regarded it as appropriate for the court to hear the claim.

However, the position will not always be clear and the appropriate test to apply may differ according to the employment right claimed. What steps can employers take to minimise the risk of claims arising when the position of a particular employee is unclear?

Firstly, employers should ensure that contractual arrangements are clearly drafted and reflect the reality of the employee's situation. For example, if a staff member is being seconded to the UK from another jurisdiction on a temporary basis this should be reflected clearly in the secondment agreement or other arrangement entered into between employer and employee.

Conversely, if an employee is transferred overseas on a permanent basis with no intention of returning to the UK, make this clear in the documents and ensure that a new employment contract reflecting the new place of work is entered into, rather than leaving the UK contract in place. Staff may seek to put pressure on an employer to retain the UK contract for the purpose of providing UK-related benefits. Even if it is possible for the employee to access UK benefits after permanently relocating, make sure that the contract reflects that there is no intention for the individual to return to the UK.

It's important to understand that the legal position may differ according to the entitlement being claimed. For example, while the courts have moved towards a "connection" test in relation to unfair dismissal and discrimination, some legislation will use a different test to determine whether an employee has UK rights. Under the Pensions Act 2008, an employer's obligation to auto-enrol an employee into a pension scheme applies to all employees who work or ordinarily work in Great Britain.

When taking action that might give rise to a claim (such as dismissing someone) consider following the basic elements of a fair process under English law, even if the employee is based in a jurisdiction where this is unnecessary. In the US, where employees are employed 'at will', it's unusual for an employer to follow a fair process as set out in the British ACAS Code. But it might be wise to do so if the employee has a UK connection.

Ultimately it will never be possible to determine every case definitively, so employers should be wary of claims arising from employees who have some connection with the UK, and alter their normal approach accordingly when dealing with these individuals.

Stefan Martin is an employment partner at international law firm Mayer Brown