The recent Employment Appeal Tribunal (“EAT”) decision in Pervez v Macquarie Bank Ltd has broadened the application of employment law to secondees working in England and Wales.
Mr Pervez was a bond trader of Pakistani nationality who worked for a Hong Kong based company called Macquarie Capital Securities Limited (“MCSL”). He began working for MCSL in April 2006 and his home and working base was Hong Kong. MCSL was a member of the Macquarie Bank group companies, of which the parent is the Australian company, Macquarie Group Limited (“MGL”).
In September 2008, Mr Pervez was seconded to Macquarie Bank Limited (London Branch) (“MBL”). The move was set out in a letter from MCSL to him in Hong Kong and signed by him by way of acceptance (the “Assignment Letter”). The move was expressed in the Assignment Letter to be by way of “international assignment” to MBL, which was described as “the Host”, and MCSL remaining “the Employer”. Hong Kong was referred to as Mr Pervez’s “Home Location” and London as the “Host Location”. He had to report to two directors of MBL and perform his duties “on behalf of the Macquarie Group”. He was paid by MBL. The Assignment Letter also contained a “resignation term” whereby if there was not a suitable role for him in the Group when MBL or MCSL ended his assignment he was to resign from his employment with the Macquarie Group (the “Resignation Term”).
In August 2009, Mr Pervez was told at a meeting in London that his assignment would terminate at the end of September and that as there was no work for him in Hong Kong the Resignation Term would be activated. He refused to resign and in September 2009, MCSL sent a dismissal letter from Hong Kong to him which terminated his employment with immediate effect (the “Dismissal Letter”). The Dismissal Letter cited his refusal to resign as required by the Resignation Term.
In October 2009, Mr Pervez brought employment tribunal claims against MBL and MGL for unfair dismissal. He also complained that the Resignation Term was included in the Assignment Letter because he was Pakistani and/or a Muslim and the reliance on the term amounted to an act of discrimination on the grounds of his race and/or religion. MBL and MGL responded by saying that neither of them employed Mr Pervez. Mr Pervez therefore applied to the Tribunal to join MCSL to the matter. MCSL argued that the Tribunal had no jurisdiction to entertain a claim against it, primarily because it was not carrying on a business in England.
The Tribunal had to determine whether Mr Pervez’s claims fell within the “legislative grasp” of the relevant legislation i.e. whether the provisions conferred rights on someone employed by an overseas company but seconded to work in England. The discrimination claims were brought under the Race Relations Act 1976 and the Employment Equality (Religion or Belief) Regulations 2003 and the unfair dismissal claim under the Employment Rights Act 1996. The tribunal judge held that Mr Pervez came within the protection of these statutes because he was working in Great Britain at the material time.
The next issue was whether pursuant to the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2004 (the “Regulations”) the Tribunal had territorial jurisdiction to hear these claims. In particular, the relevant parts of Regulation 19 provide:
“(1) An employment tribunal in England or Wales shall only have jurisdiction to deal with proceedings (referred to as ‘English and Welsh proceedings’) where –
(a) the Respondents or one of the Respondents resides or carries on business in England and Wales;
(b) had the remedy been by way of action in the county court the cause of action would have arisen wholly or partly in England and Wales;
The judge held that MCSL did not reside or carry on business in England and Wales and if the remedy had been by way of action in the county court, the causes of action, both the dismissal and the discrimination, arose wholly in Hong Kong (because this is from where the Assignment Letter and Dismissal Letter were sent). Therefore, she held that the Tribunal did not have jurisdiction to deal with proceedings against MCSL. Mr Pervez appealed.
Employment Appeal Tribunal Decision
The EAT judge disagreed with the Tribunal’s decision. He looked briefly at the purpose of the Regulations which are meant to simply regulate the caseloads between English and Welsh tribunals on the one hand and Scottish tribunals on the other. Apparently the draftsmen had not considered the Regulations’ effects on cases dealing with other jurisdictions. The Regulations’ impact on Mr Pervez’s case would have had a very surprising result. MCSL could not in any ordinary sense of the phrase be said to have been ‘carrying on business in England and Wales’ as required under Regulation 19(1)(a), so there was a strong argument that the tribunal did not have jurisdiction. However, this would mean that Parliament would have conferred rights on Mr Pervez but failed to provide a forum for him to enforce those rights.
The judge also considered what wrongful effects Regulation 19(1)(b) could have. He highlighted there could be situations where because of where the causes of action occurred (i.e. outside England and Wales) this could result in a tribunal not having jurisdiction even though the respondents are carrying on business in England and Wales. He gave the following example – an employee of a French company on secondment to a different company in London who is subjected to racial harassment by a colleague in the course of a trip to New York would strictly not be covered. He could not agree that this was the rule-makers’ intentions either.
The appeal was allowed so that MCSL could be joined as a Respondent.
The case shows how the EAT is willing to apply purposive interpretation to employment law to ensure that justice is done and that someone who has been provided with a legal remedy will be able to enforce it. The result is that this case assists employees and could restrict an employer’s scope to plead jurisdictional issues. However, it should be noted that each secondment is structured differently and in each case it will be crucial to analyse the nature of the parties’ relationships.
For further information please contact Niki Avraam or the Partner with whom you usually deal.