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Territorial Jurisdiction: an objective test

09 June 2017 #Contracts

In the recent case of Green v SIG Trading Ltd, the EAT held that the question of whether an employee has a sufficiently strong connection to the UK (to give a tribunal territorial jurisdiction to consider a claim) is an objective rather than a subjective test.

SIG Trading Ltd (SIG), a limited company registered in the UK, employed Mr Green as a Managing Director of its business in Saudi Arabia. He commuted from Lebanon (where he lived with his family) to Saudi Arabia for two to four days weekly and was only required to attend meetings/undertake training in the UK on limited occasions. Mr Green was paid in UK sterling and registered with HMRC (although he was treated as exempt from UK tax and NI’s).  He was given one of SIG’s standard UK contracts, which was governed by English law and referred to UK employment legislation and policies.  When he was made redundant, he sought to bring claims against SIG in the UK under the Employment Rights Act. 

Initially, the Tribunal held that Mr Green was an expatriate employee, with stronger connections to Saudi Arabia than the UK and, as such, it did not have jurisdiction to hear his claims.  However, on appeal, the EAT found that the Tribunal had ignored the fact that the parties had agreed that Mr Green’s contract should be governed by English law when considering the “strong connection” test.  It found that the Tribunal had given too much weight to SIG’s subjective explanation for this (namely, that it had used its standard UK contract just for “convenience”) and that whilst the wider context should be looked at, the proper test was an objective assessment of whether Mr Green’s connection was stronger to the UK or to Saudi Arabia.  Mr Green’s appeal was therefore upheld.  

Whilst a choice of law clause is one of a number of factors that are included in the mix when assessing whether an employee has a stronger connection to the UK then the country he/she works, the case serves as a reminder to employers that its relevance should not be overlooked. 

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Alison Flett

Alison Flett
Senior Solicitor

E: aflett@clarkslegal.com
T: 029 2055 7532
M: 0771 784 1822