1. Workers’ rights abroadAuthor: Andrew Fishleigh, Keystone Law
Published: June 2012
Info Centre
Briefing

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Workers’ rights abroad
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About the author
Andrew Fishleigh is an experienced employment lawyer advising
employers and employees in contentious and non-contentious
matters. Having initially commenced his legal career with the
Treasury Solicitor, he subsequently practiced with DJ Freeman
and Garretts in London and Reading.
andrewfishleigh@keystonelaw.co.uk

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Workers’ rights abroad
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Over recent years we have seen a huge expansion in international travel and the requirement to work across
borders has expanded significantly.
Last month news broke that Sean Juneja, the former Head of Global Structured Products for London-based
BGC Partners, was suing the company for millions of pounds following his transfer by BGC to New York.
He alleges that he was denied access to medical benefits, his salary was not paid, a £1.3m bonus paid to
him was demanded back and the company refused to communicate with him. This led to a major depressive
disorder which in turn caused him to be off sick since September 2009.
How is it possible for a foreign-based worker to take advantage of the protection offered by English
Tribunals and Courts?
Types of worker
There is no all-embracing definition of a foreign based worker, but some of the tags that have been adopted
include:
• The peripatetic worker.
• The expatriate worker.
• The British enclave worker.
• The international commuter.
The contract of employment
The starting point is the contract of employment. Most contracts provide the essential terms agreed
between employer and employee, and the contract can also provide guidance on jurisdiction, so that a UK
national who is posted abroad by an employer will normally have an English law clause incorporated in his
contract. Any breach of contract such as non-payment of salary or bonus would allow the employee the
right to enforce it in the English courts. The employee may also be able to enforce the contract in the local
courts of the country where he has been posted, although this is a complex area which is governed by
various conventions and regulations such as the Brussels Convention.
Unfair dismissal
The right not to be unfairly dismissed is a statutory right granted by Parliament in the Employment Rights
Act 1996 (ERA). This allows employees who are not dismissed fairly (i.e. for a statutory reason such as
capability, conduct or redundancy) to seek compensation which is currently capped at £72,300. As far as
foreign-based workers are concerned, the legal position is complex and in order to understand the current
law it is necessary to go back in time.

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Workers’ rights abroad
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Until 2006 guidelines were laid down by Parliament which stated that unfair dismissal rights were not
available to any employee where he or she ‘ordinarily works outside Great Britain’.
It was possible to persuade Tribunals that they had jurisdiction to hear claims, but clearly the employees
facing such a test were on the back foot.
However, this provision was repealed in 1999, but somewhat bizarrely no replacement guidance was given
at all going forward. Accordingly the Tribunals and appeal courts have had to determine the extent of
workers’ rights abroad, with no definition or guidance as to what parameters or tests they should be
adopting to determine the rights of a worker who does not work wholly in Great Britain.
In 2006, the House of Lords assisted in resolving this dilemma in a leading case of Lawson v. Serco where
the court indicated that in three scenarios the ERA provisions on unfair dismissal applied to workers whose
employer was based in the UK but who performed their work wholly or mainly in a foreign country:
• An employee posted abroad for the purpose of business conducted not in the foreign country but
here at home – such as a foreign correspondent of a British newspaper.
• An employee working within what amounts to a British enclave abroad – such as a civilian employee
working in a German military base.
• Other employees having ‘equally strong connections with Great Britain and British employment law’
– which might include teachers recruited by the Ministry of Defence to work under fixed term
contracts in European schools in mainland Europe
Discrimination
Discrimination claims by foreign-based workers face the same hurdles as unfair dismissal claimants since
the Equality Act 2010 and preceding legislation give little or no guidance on the territorial aspects of claims
for discrimination. The explanatory notes to the Equality Act state that ‘as far as territoriality is concerned
the Act leaves it to Tribunals to determine whether the law applies depending for example on the
connection between the employment relationship and Great Britain’.
Given that the English courts do not cap discrimination claims, the ability or otherwise of an employee to
bring such claims will be important, and the guidelines given in Serco will apply.
Posted Workers Directive
In 1999, the UK implemented the Posting of Workers Directive, which broadly states that minimum terms
apply to workers posted abroad within the European Economic Area. This includes intra company postings
and temporary employment agencies which hire out workers to undertakings established in another EU
state.
The minimum terms include maximum work periods, annual holidays, rates of pay, health and safety and
equality of treatment between men and women.

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Workers’ rights abroad
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Tax
Where an employee who is resident ordinarily in the UK works abroad PAYE should be operated in the
normal way. Where the employee is not UK resident UK tax is not chargeable on earnings from abroad.
Specialist advice should be taken in individual cases.
When an employer sends an employee to work abroad he should be provided with a letter giving details of
the date he was posted and the gross pay and tax deducted while employed in the UK.
Summary
While the law appears complex in areas such as unfair dismissal and discrimination, employers and
employees can take certain steps to limit exposure to disputes where an employee works or is posted
abroad by a UK company. In particular, the terms and conditions under which the employee is being posted
need to be set out with care, in a contract or assignment document, ensuring that proper consideration is
given to the possible length of posting, any probationary period, notice and all contractual benefits which
will probably include return visits to the UK and the payment of travel and relocation costs.
It would be wise to take legal advice as to how the judgment in the Serco case may assist any foreign
posting and employers would be best advised to take advice on the Posted Workers Directive to ensure
compliance with that as well.