Unfair dismissal

Did the tribunal have jurisdiction to consider employment tribunal claims against US based Respondents?

Did the tribunal have jurisdiction to consider employment tribunal claims against US based Respondents?

The short answer is yes, as held by the Employment Appeal Tribunal (EAT) in TwistDX Ltd & Others v Armes & Ors. 

Dr Armes and his wife worked for a UK business that developed amplified DNA technology. Dr Armes sold his shares in 2010 to a US-based company, which in turn was purchased by another US company that owned the UK business in 2017. 

Dr and Mrs Armes were dismissed in 2018. Both brought several employment tribunal claims including automatic unfair dismissal as a result of whistleblowing, ordinary unfair dismissal and discrimination against the following:

  • the UK business which employed them;
  • the US company which owned the UK business;
  • three individuals who were based in the US; and
  • two individuals who were based in the UK.

The US company and the US individual respondents applied to have the claims against them struck out i.e. dismissed on the grounds that the tribunal lacked international or territorial jurisdiction to consider claims against them. The tribunal refused to grant the strike out application, so these respondents appealed to the EAT.

The law is fairly technical, but in summary, with respect to the US based company, the EAT held that the tribunal decision not to strike out was appropriate.  It was reasonably arguable that Dr and Mrs Armes could show that they were employed by the US based company. It said that employment is broadly defined in the Recast Brussels Regulation that determines territorial jurisdiction and/or that the UK business was a branch or agency of it.  Both points could be argued here.

The tribunal also allowed the claims against the individual US respondents because claims can be brought against them if any of them in England & Wales carried out business there, one of the acts/omissions happened there or the claim related to a contract under which work performed there.

The case has been sent back to the tribunal for a full merits hearing.

This case is interesting because many UK based companies are just service companies for US parent companies, who in fact control the employment relationship and it is their employees who make decisions about the fate of their UK based employees.  This ensures that at least for US employers, they cannot simply avoid claims against them by relying on a technicality – that a tribunal does not have territorial jurisdiction to consider claims against them.

This blog was written by Anita Vadgama, Partner at didlaw.