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Serco v Lawson

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The House of Lords has, this morning, delivered its opinion in Serco v Lawson (and associated appeals).

The issue relates to the territorial scope of the right not to be unfairly dismissed. Section 196(3) of the Employment Rights Act 1996, which provided that the right did not apply to "any employment where...the employee ordinarily works outside Great Britain" was repealed in 1999 and not replaced.

Lord Hoffman, giving the only reasoned judgment, stated (para 23) that "it is a mistake to try to formulate an ancillary rule of territorial scope, in the sense of a verbal formula such as s196 used to provide...". He then went on (para 25) to say that the right to claim unfair dismissal applies to "the employee who was working in Great Britain", and that overreliance on the contractual position shold be avoided (paras 26 and 29).

Lord Hoffman also highlighted the problem of the peripatetic employee (look it up in a dictionary!!) and said that tribunals should look at the base of the peripatetic employee (para 29), i.e. the place he should be regarded as ordinarily working even though he may spend months working overseas.

The problem of expatriate employees was more difficult, as the concept of a 'base' provides no help with expatriates. Lord Hoffman held that it would be unusual for an employee who works and is based abroad to come within the scope of British labour legislation (para. 36-40), although some occasionally may do so if there are other factors so powerful that the employment relationship has a closer connection with Great Britain than with the foreign country where the employee works. Examples include an employee posted abroad to work for a business conducted in Britain, and the employee working in a political or social British enclave.

Serco, a UK company, employed Mr Lawson (an ex-RAF policeman) to work as a security operator on Ascension Island, where Serco had a contract to service the RAF base. Ascension is a 35 square mile volcanic island in the South Atlantic with no indigenous population. Both employer and employee had close connections with the UK, but all the services were performed abroad. The House of Lords held that this was sufficient for Mr Lawson to have the right to claim unfair dismissal.

Clear? If only.

Serco Ltd. v Lawson