Employees Working Across Borders: But where do they belong to?
A recent decision of the United Kingdom’s Supreme Court provides valuable insight into the issue of which laws apply to employees working in various jurisdictions. This is a phenomenon which is increasing exponentially as companies across the globe expand their operations and accordingly often send people to a variety of countries.
The case, Ravat v. Halliburton Manufacturing and Services Ltd., involved an employee who worked for Halliburton, a multi-national manufacturing company headquartered in Aberdeen, Scotland. He had worked for the company for approximately 16 years, from 1990 to 2006, at which point his employment was terminated.
During his time with Halliburton, the employee consistently alternated between living in the United Kingdom and working in Libya. Specifically, his normal regime included working in Libya for 28 days, followed by 28 days in back in Preston, United Kingdom during which time he had no obligation to do work. The work which he carried out in Libya was for the benefit of the German subsidiary of Halliburton.
Following the termination of his employment, the employee proceeded to bring forward a claim for wrongful dismissal. A preliminary question however was whether the Scottish employment tribunal had jurisdiction to deal with the matter, particularly given that the employee had spent so much of his time with Halliburton stationed in Libya. The employment tribunal ruled that it did in fact have jurisdiction to deal with the matter. This decision however was overturned by the appeal tribunal. The case subsequently made its way to the Supreme Court.
The Supreme Court held that, although the general rule is that a person’s place of employment will be decisive in determining which law applies, this is not an absolute rule. Rather, the Supreme Court stated that, where an employee’s connection to a home country (in this case, Great Britain), is stronger than to that of the foreign country, the employee may rely on the laws of the home country (the United Kingdom).
The Supreme Court proceeded to review the factors which it found relevant in determining the strength of the employee’s connection to the United Kingdom including that the employee was a British citizen, that he was a resident of Britain, that he was paid in British Sterling, and that he was provided British employment benefits throughout his employment with Halliburton. Further, the Supreme Court found that the employee was told by representatives of Halliburton that the laws of the United Kingdom would apply to his employment.
On the bases of the principle enunciated above and the related factors, the Supreme Court ultimately held that the employee’s connection to the United Kingdom was stronger than that with Libya, and ordered that his wrongful dismissal claim be heard in the United Kingdom. This is despite the fact that the employee did not actually work for Halliburton in the United Kingdom during his breaks from Libya.
The general approach of the Supreme Court is similar to that which courts in Canada have taken to date. Specifically, in deciding on the appropriate jurisdiction, courts will take a keen look at the employment relationship as a whole in order to determine where the employee is most strongly connected.
What does this mean?
The case law is a reminder to multinational organizations of the value in careful planning and proper documentation in managing the movement of workers across borders. Employers should specifically have a plan in place in order to manage both employee expectations and company operations to reduce the risk that employees succeed at claiming that they belong to a jurisdiction which does not match an organization's intention. The importance of such steps is only likely to increase as the rise of global trade leads to a concurrent rise in the number of employees working in multiple jurisdictions.