Jurisdiction – Claims by Overseas Employees

The Employment Appeal Tribunal (EAT) has ruled that the Employment Tribunal (ET) does have jurisdiction to hear an employee’s complaints under sex discrimination and equal pay legislation even though her contract of employment specifically stated that German law should be applied to the resolution of any disputes (Simpson v Intralinks). Mr Justice Langstaff said that the case was the first in which the EAT had been asked to consider whether foreign or domestic law should apply to an employment contract which states that both the applicable law and jurisdiction governing disputes should be those of another EU member state.

 

Denise Simpson lived and worked in Frankfurt, although she made occasional visits to the UK. Her employer, Intralinks, had its registered office in London but her employment contract was written in both German and English and stated that ‘any disputes arising therefrom for any legal reason whatsoever’ were to be governed and construed ‘exclusively in accordance with the laws of the Federal Republic of Germany’. The contract also provided that the place of jurisdiction was Frankfurt.



Ms Simpson lodged ET claims under the Sex Discrimination Act 1975 and the Equal Pay Act 1970 (both now replaced by the Equality Act 2010) in the UK, but the Employment Judge held that the ET did not have jurisdiction to hear her claims. This decision was overturned by the EAT, however.

 

The EAT said that a distinction must be made between each of three matters: the territorial scope of the domestic statute; the applicable law relating to the contract; and the place where a case is determined.



Under the terms of the Rome Convention, the applicable law to the resolution of disputes under the employment contract was German law. However, Article 19 of European Community Regulation 44/2001 (the Brussels I Regulation) gave the employee a ‘choice’ as to the jurisdiction in which she would pursue her case and permitted her to sue her employer in the UK.

 

The judge accepted that German law was the applicable law in the case, under the terms of the Rome Convention, because the employee habitually carried out her work in Frankfurt. However, the 1975 Act and the 1970 Act applied ‘without territorial limit’ and nothing in the Rome Convention restricted the application of those statutes.

 

Mr Justice Langstaff concluded, “Though it may seem at first blush counter-intuitive that, where parties agree both that the law which will govern their employment relationship is foreign and that the courts in which any employment dispute is to be heard are also foreign, nonetheless the employee is permitted to choose to litigate the issues in the United Kingdom.

 

“Once, however, the policy of the international conventions is understood to be that employees need protection, as being generally in a weaker position than employers when negotiating their contracts of employment, such that the law should redress the imbalance by providing the employee with a choice of which otherwise the unequal terms of a contract would deprive him, then the consequence is (in general) not counter-intuitive, but may be seen as (in general) tending to justice.”

 

The case was remitted to the ET for redetermination with the proviso that ‘in doing so it will apply German law on any issue other than those upon which the provisions of the 1970 and 1975 Acts are mandatory’. This is most likely to be whether there is a contract of employment, which is a necessary prerequisite to entitlement to the rights under the statutes concerned.



Whilst the EAT found that this case could be determined by the ET, it expressly stated that the circumstances would not have satisfied the test laid down in Lawson v Serco for determining jurisdiction in claims of unfair dismissal.