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Sources and scope of labour law Labour Standards and private international law Collins - with increasing transnational mobility of labour and, in particular, of capital, the issue of conflicts of law between different labour law regimes is a very live one. Question of which law governs employment relationships, and what the relationship is between a formal choice of law clause in a contract and the potentially overriding rules of employment legislation. The applicable law of the contract of employment Where the parties have made a formal choice of law the courts will generally respect this, although it is thought that they would disregard a choice of law clause which established as the applicable law one with which the contract had no real connection and which was manifestly to the employee's disadvantage (Kahn-Freund, Hepple, Morse). In the absence of an express or implied choice, the test of 'closest and most real connection' applies. This has been applied flexibly to cover the differing situations of employees. For senior employees, the applicable law is usually held to be that of the state in which the undertaking is based or from which it is controlled ( Re AngloAustrian Bank). For lower level employees, the applicable law will normally be the state in which they reside or in which they normally work (South African Breweries). The justification for this different treatment is that high-level employees are more closely associated with the central control of the organisation and hence with its base. The place in which the contract is made may also be a relevant factor. The territorial scope of employment legislation A choice of law clause in a contract of employment or other contract does not exclude the provisions of those statutes if their enforcement would otherwise fall within the jurisdiction of the UK courts. While this bar on contracting out sometimes poses a problem for transnational employers with employees working in a number of different jurisdictions, any other approach would run the risk of contracts being framed so as to evade UK legislation, in favour of regulation by the weaker laws of another state. No longer any restriction of significant employment protection rights which were denied to employees who ordinarily worked outside Great Britain. Changed linked to Posted Workers Directive implementation, and restriction abolished by ERelA 1999 in relation to rights protected by ERA 1996. Lawson (HoL)- concerned the application of the right not to be unfairly dismissed under ERA 1996, s94(1). Lord Hoffmann stated that it was "inconceivable that Parliament was intending to confer rights upon employees working in foreign countries and having no connection with Great Britain". The relevant question concerned the connection between Great Britain and the employment relationship that was required in order to make s 94(1) the applicable law. The answer to this depended upon the construction of the specific statutory provision at issue according to established principles, rather than upon the application of an "ancillary rule". In the case of s 94(1), what Parliament must have intended as the paradigm case was the employee who was working in Great Britain. Under the repealed legislation, the decisive question was whether "under the employee's contract of employment" he or she ordinarily worked outside Great Britain. Lord Hoffmann considered that the "radical change" in the attitude of Parliament and the courts to the employment relationship since 1971, when the that restriction had first been introduced, meant that the application of s94(1) "should now depend on whether the employee was working in Great Britain at the time of his dismissal, rather than upon what was contemplated at the time, perhaps many years earlier, when the contract was made."
[It should be noted that as interpreted in Commission v Luxembourg 2009, the Posted Workers Directive neither requires nor permits a member state to apply unfair dismissal legislation to a posted worker.]
Where the employee was a peripatetic (rootless) worker, such as an airline pilot or international management consultant, who might spend considerable periods working overseas, the employee's base should be treated as the place of employment (this approves Lord Denning in Todd). In relation to the base test, Lord Hoffmann cited the judgment of Megaw LJ in Wilson v Maynard where he said that in identifying an employee's base, account should be taken of such contract terms "as expressly define his headquarters, or which indicate where the travels involved in his employment begin and end; where his private residence is expected to be paid; [and] whether he is to be subject to pay national insurance contributions in Great Britain". On this approach, the fact that employees may spend more time out of the country than in it will not, of itself, exclude them from protection, nor will the fact that pilots who are based in London are employed by a foreign airline. Lord Hoffmann also held that there may be unusual circumstances in which expatriate employees could fall within s94(1) even though they both work and are based abroad. Although he did not wish to define them, he sought to "identify the characteristics which such exceptional cases will ordinarily have" by reference to two examples: 1) where the employee was posted abroad by a British employer for the purposes of a business conducted in Britain, such as the foreign correspondent on the staff of a British newspaper who was posted to Rome and lived there for some years but who remained a permanent employee of the newspaper who could be posted to some other country. 2) an employee of a British employer who was operating within what amounted for practical purposes to an "extra-territorial British enclave in a foreign country". This was the position of a UK-based youth worker who worked at various Ministry of Defence establishments in Germany (Botham) and that of the claimant in Lawson itself, an employee of a British company employed to provide security at an RAF base which was in practice a British outpost in the South Atlantic. He had not taken up employment in a foreign community in the same way as if his employer had been providing security services for a hospital in Berlin. Although Lawson provided welcome clarification to the territorial scope of ERA 1996, s96(1), which was said to be a question of law (though Lord Hoffmann stated that it was also "a question of degree on which the decision of the primary fact-finder is entitled to considerable respect"), a number of issues still remain: 1) the paradigm case - although Lord Hoffmann stated that an employee who is "merely on a casual visit" to Britain at the time of dismissal would not be covered, and that the contractual terms and prior history of the relationship may be relevant in determining this, he did not indicate how long such an employee would need to have worked in Britain before he or she was protected. 2) there may be cases which fall between the paradigm and the peripatetic cases - an employee who is recruited in Great Britain but works overseas on an occasional basis and who is dismissed while overseas. 3) where an expatriate employee takes up, or does not take up, "employment in a foreign community" may not be straightforward to determine. 4) The decision leaves open the principles that apply to the many rights other than unfair dismissal that ERA 1996 protects. Express geographical restrictions remain in place in relation to certain other statutory rights. Anti-discrimination legislation is limited in its scope to employment "at an establishment in Great Britain" - EqPA 1970. This covers the situation, firstly in which the employee "does his work wholly or partly in Great Britain" (SDA 1975, s 10(1)). In addition, the anti-discrimination legislation applies in a situation where: (a) the employer has a place of business at an establishment in Great Britain,
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