In Yacht Management Company Ltd v Gordon the Employment Appeal Tribunal (EAT) has upheld a decision of the Employment Tribunal, that there were numerous factors to support the Tribunal’s conclusion that it had jurisdiction to hear a claim of unfair dismissal brought by the employee because the seafarer’s “base” was her home in Aberdeen, Great Britain despite the fact that her “tours of duty” on the yacht all began and ended outside Great Britain and the yacht did not enter a UK port or UK waters at any time during her employment.

Facts

The employer, Yacht Management Company Ltd (YMC Ltd) is a company registered in Guernsey. It does not carry out any business within the United Kingdom and the majority of YMC Ltd’s business services such as human resources, administration, payroll and management are mainly carried out in either Spain or France.

The employee, Ms Gordon (G) was interviewed virtually in 2019 for the position of “Second Stewardess” with YMC Ltd. The interview was conducted at her home in Aberdeen and those interviewing her were in Germany. G’s employment contract stated that her normal place of work would be on the vessel on voyages worldwide, or wherever required by YMC Ltd for the proper performance of her duties. All of G’s travel expenses between her home and the vessel were paid for by YMC Ltd, in accordance with her contract. G was paid her salary in Euros into a UK bank account and she completed tax returns to HMRC as a resident of Scotland. At no time during G’s employment did the vessel ever enter a UK port or UK waters.

The employment contract between YMC Ltd and G was governed and construed in accordance with the courts of England and Wales and any disputes or claims arising from it would be under the jurisdiction of the England and Wales Courts.

In 2021, YMC Ltd made the decision to make G’s role redundant; this decision was made in Spain and an email was sent to G informing her of her redundancy, this was followed by a letter sent from Spain to her home in Aberdeen. G’s redundancy payment was calculated on the basis of UK law.

Once she had been made redundant, G claimed unfair dismissal and a claim under the Equality Act 2010. At a preliminary hearing to determine territorial jurisdiction, the employment judge recognised that the key question was where the employee’s base was and ultimately concluded that her “base” was Aberdeen, so the Tribunal did have jurisdiction to hear the claim. YMC Ltd appealed this decision.

EAT decision

The EAT relied on previous case law examining territorial jurisdiction applicable to peripatetic employees.  Rather than simply considering the place of work when confirming the “base” of an employee, it is important to consider the entire factual matrix, such as employment contracts, the place of residence and who is paying for travel expenses to and from the place where work begins. In this case the contractual term relating to hours of work suggested that if travelling to the vessel was necessary for the performance of her duties, it was working time.  In addition, the contract provided that the whole costs of journeys to and from the vessel including taxi fares and air fares were met by the employer.  As a result, it was clear that the time spent travelling to and from Aberdeen was working time under the contract and so part of her duties. In addition to the conclusion of where she commenced and ended her duties there were other factors which could be applied under the multi-factor test to determine her base:  the location of her bank account; her accounting to HMRC for tax; the governing law of the contract: the choice of forum for disputes; the basis on which the redundancy pay was calculated; and the employer’s contractual responsibility for all travel expenses incurred between her home and the vessel.  The EAT rejected YMC Ltd’s arguments, refusing the appeal and upheld the Tribunal’s decision that G’s claim for unfair dismissal fell under the jurisdiction of England and Wales, despite the vessel never entering UK waters.

What should employers do?

Employers should ensure that they are considering the wider context of an employee’s circumstances which may contribute to where their “base” is considered to be. It is also important to recognise that although an employee may not work in the UK or within UK waters, if the connection between the UK and the employment relationship is “sufficiently strong” then the courts may have jurisdiction over any claim which may arise.

Thank you to Izzy James for help in drafting this blog post.