Jurisdiction in the employment tribunal is a particularly tricky area of law. Hot on the heels of Cable News International Inc v Bhatti (see our update here) comes the case of Prähl and ors v Lapinski, where the Employment Appeal Tribunal (‘EAT’) has considered the issue of international jurisdiction.
In this case, three non-UK domiciled respondents to a claim in the employment tribunal failed in their bid to persuade the EAT that it lacked international jurisdiction in respect of the claims against them.
In this case update, we explore what was decided and what it means for employers.
Background
For the purposes of this case, there are three difference types of jurisdiction:
- Cause of action jurisdiction, which is whether the employment tribunal has been empowered by statute to hear particular complaints.
- Territorial jurisdiction, namely whether there is a sufficiently close connection to bring the claim within the territorial scope of the legislation for the employment tribunals to hear the claim.
- The focus of this case is the question of international jurisdiction, which is whether a UK court has jurisdiction to hear claims against parties who are based overseas.
Regarding the question of international jurisdiction, and at the centre of this appeal were:
- The Employment Tribunal Rules of Procedure 2013 (the ‘ET Rules’) (the rules at that time) which provided for service of a claim on any party by sending a copy of the claim form, a response pack, and a notice containing certain prescribed information (rule 15). Further, rule 8 states that a respondent or one of them must reside or carry on business in England and Wales, hence envisaging that some claims may have a foreign element.
- The Brussels Recast Regulation (the ‘Regulation’) and the amendments to the Civil Jurisdiction and Judgments Act 1982 (the ‘1982 Act’). The Regulation ceased to apply on 31 December 2020, following the UK’s withdrawal from the EU. Since then, the amended provisions of the 1982 Act apply. Very broadly, the Regulation (and then the 1982 Act) was an attempt to simplify the rules governing international jurisdiction within EU member states in respect of employment disputes based on the employee’s habitual place of work.
Facts
The claimant brought complaints against a UK based limited liability partnership and six individual respondents under the Equality Act 2010. Three of those individual respondents who were domiciled in Sweden (the Swedish Respondents) contested the employment tribunal’s jurisdiction to hear the claims against them. The Swedish Respondents did not contest jurisdiction in the sense that the employment tribunal had jurisdiction in relation to the causes of action in the claim, nor that that the employment tribunal had territorial jurisdiction to hear the particular allegations against them but contested that the employment tribunal did not have international jurisdiction to hear a claim brought against these parties who were domiciled overseas and who had not been served with the claim in the UK.
The Swedish Respondents argued that each of the following factors showed that the tribunal lacked international jurisdiction to hear the claims against them:
- each of the individuals is Swedish, each lives and is domiciled in Sweden;
- none of them were in the UK at the time that the claim was issued or served;
- the claim was not served personally upon them in the UK;
- the claim was not sent to them at an address in the UK where they were present but was sent to them in Sweden; and
- none of them had submitted to the jurisdiction of the employment tribunal (that is, they did not enter a defence to the claims).
Their argument was that it is not enough for the employment tribunal to have cause of action jurisdiction and territorial jurisdiction, there needs to be some applicable rule of international jurisdiction that is satisfied.
Decision of the employment tribunal
Service under the employment tribunal rules.
Perhaps unsurprisingly in light of the breadth of the ET Rules, the employment tribunal had found that each of the Swedish Respondents had been validly served in accordance with the ET Rules.
In stark contrast to the Civil Procedure Rules (1998) as amended, the (then) ET Rules contained little formality around the service of claims, irrespective of whether or not a party is located outside the UK; the ET Rules provides that service is effected by the employment tribunal sending a notice of claim, the claim form and particulars of claim to a respondent at the address given for them in the claim form. There are no special requirements for service of documents outside the UK. That is often surprising to commercial litigators who are not used to the employment tribunals.
Service under the 1982 Act and the Regulation and the question of employment
The employment tribunal went on to consider the Regulation and the 1982 Act. Under section 15C of the 1982 Act, a non-UK domiciled employer can be sued by an employee in the UK, hence preserving the pre-Brexit position. However, here the claimant was not an employee but a member of an LLP. Surely that is a fundamental issue?
The Swedish Respondents argued that the 1982 Act could not apply here as it was not a situation of employment and absent any common-law service (service when the party is present within the jurisdiction) there was no international jurisdiction. They argued that the reason that the 1982 Act did not apply was because it only applies to employees and only in respect of claims brought against the employer. In this case, the claimant had been a member of an LLP and none of the Swedish Respondents were the employer.
The employment tribunal found that the claimant’s contract with the LLP was to be treated as if it were a contract of employment. On that basis, the Swedish Respondents were caught too by section 15C as employees or agents of the LLP.
Whilst the employment tribunal held that it did not need to satisfy section 15C, it cited earlier case law that considered that the focus should be on the substance of the relationship and not the legal structure. In this case, the claimant had a good arguable case for a variety of reasons, including the required degree of subordination as an LLP member which was akin to an employment relationship. Hence, his membership of the LLP was caught by section 15C. Further the Equality Act 2010 applies to LLPs and their members.
The EAT’s decision
The EAT upheld the tribunal’s decisions above. In particular, it made some observations in respect of the operation of section 15C of the 1982 Act. It held that section 15C of the 1982 Act:
- was protective of the rights of employees (in the broadest sense) and its purpose had a view to avoiding employees having to bringing multiple claims in multiple jurisdictions; and
- preserved the position that claimants in the employment tribunal are no worse off as a result of the Regulation ceasing to apply, and so there should not be any service requirements beyond those in the ET Rules. It also held that a claimant should not be precluded from bringing a claim against a particular respondent now that they would have been able to do when the Regulation was in force; such rights are preserved and not reduced.
Takeaway
Whilst perhaps this is not a surprising decision, this is a fiendishly complex area of the law, that some will perhaps find unsatisfactory.
There is no proposed reform of the legislation in this area so we await any further clarifications from the appellate courts.
