Do you have employees that work remotely from abroad?

A recent case decided by the Employment Appeal Tribunal ("EAT") has added a new twist to the territorial scope of UK employment law, and your employees may now be within the scope to bring claims under UK employment law.

In the case of Lodge v Dignity and Choice in Dying and another, the employee in question, Mrs Lodge, was an Australian citizen who was employed by the British not-for profit charity Dignity and Choice in Dying under the terms of a contract governed by the laws of England and Wales.

Historically, specifying that a contract of employment is governed by UK law has not been sufficient to bring it within the appropriate territorial scope. The leading case on the scope of UK employment law, Lawson v Serco, stated that there must be a sufficiently strong connection to the UK, and therefore expatriate employees would only in the most unusual circumstances be within the scope of UK employment law. What was meant by the most unusual circumstances appeared to be limited to situations where an employee has been posted abroad by his British employer for the purposes of the business carried on in the UK. This new case however includes a further group of expatriate employees.

Initially Mrs Lodge worked from her employer's London office and occasionally from her home in West London. A few months after her employment started, Mrs Lodge moved to Australia to be closer to her ill mother. Mrs Lodge remained an employee of the charity and worked remotely from Australia using the same remote applications that she had used whilst working from her West London home.

When Mrs Lodge resigned in June 2013 and brought claims for unfair dismissal and whistleblowing her claim was initially rejected as she was not considered to be within the territorial scope of UK employment law. This was due to the fact her circumstances were not consistent with the ruling in Lawson v Serco; Mrs Lodge had chosen to move to Australia as opposed to being posted there by her employer.

The EAT disagreed however. They held that although she was not posted to Australia at the instigation of her employer this did not prevent her from being within the expatriate employees envisaged in Lawson v Serco. Mrs Lodge remained connected to the UK through her employment under a contract subject to UK law, and the fact that her employer's activities were solely located in the UK. The tipping point for the EAT was that all the work done by Mrs Lodge was for the benefit of the charity's operations in the UK. The EAT therefore held that Mrs Lodge was within the territorial scope of UK employment law.

Although determining territorial scope is fact specific this case does serve as a warning to all employers that have employees working remotely from abroad and the implications of an ever increasing technological and versatile work place. If you have employees working remotely from abroad, make sure you are compliant with UK employment law - as well as the law of the country they are based - otherwise you may open yourself to liability if they later decide to bring a claim In the UK.