February 20 2006 Employment Law Enews

Welcome to the latest edition of employment law enews.

House of Lords decides on greater protection for overseas employees

When contemplating dismissing an overseas employee, employers must now be mindful of the recent House of Lords decision which has extended the scope of British unfair dismissal protection to include oversees employees in certain circumstances.

The House of Lords after examining three cases; Serco Limited (Respondents) v. Lawson (Appellant), Botham (FC) (Appellant) v. Ministry of Defence Respondents) and Crofts (Respondent) and others v. Veta Limited (Appellants) [2006], described three scenarios which would allow an overseas employee to claim unfair dismissal, bringing it more in line with discrimination claims.

Employees will now be protected if they can establish that they were either working in Great Britain at the time of dismissal, were working in various locations but based in Great Britain, or they were an expatriate employee.

Protection for expatriate employees was given a far more limited meaning and an employee must demonstrate either of the following:

1. He has been posted overseas by a British employer for the purposes of a business carried on in Great Britain; or
2. He works for a British employer and is operating in a 'British enclave' in a foreign country.

The House of Lords highlighted that the latter would only apply in exceptional circumstances, such as a military base abroad.

Employers must, as a consequence of this decision, be cautious when dealing with employees who do all their work overseas and not assume that British unfair dismissal law does not apply.

Termination of Commercial Agency Agreements - compensation for actual loss

The Commercial Agents (Council Directive) Regulations 1993 ('the Regulations') provide a commercial agent with a statutory right to compensation upon termination of an agency agreement. These Regulations apply to any self-employed intermediary who sells goods on behalf of, and in the name of a principal.

Traditionally there has been a presumption that commercial agents should be awarded compensation for two years' earnings if the agency is terminated, unless there is good reason to depart from this presumption.

The Court of Appeal in Lonsdale v Howard & Hallam Ltd [2006] has now decided that when dealing with the valuation of compensation for claims brought under the Regulations there can be no such presumption and the damages awarded should reflect the true loss of the agent.

The assessment of compensation should, therefore, reflect the actual loss of the agency business and any goodwill attached to it. In line with this approach, the Court also emphasised that the 'just and reasonable' test is not to be used in the assessment of compensation.

It is likely that this decision will lead to an increase in the need for expert evidence to be used in assessing the extent of any loss under an agency agreement.

Protection for employees who refuse to participate in dangerous work

The recent tribunal case of Gizbert v ABC News Intercontinental Inc [2005] has reinforced the principal that an employee can reasonably refuse to work in dangerous conditions, by deciding that a journalist who refused to report in war zones was unfairly dismissed for asserting his rights under health and safety law.

Mr Gizbert was employed by ABC News as a Foreign Correspondent, undertaking assignments in war zones, including Bosnia and Chechnya. When Mr Gizbert later refused to travel to Iraq his contract was not renewed.

The tribunal held that this decision not to renew his contract was partly influenced by the refusal to work in Iraq and this was a clear breach of health and safety laws.

A dismissal is automatically unfair if it is because the employee has brought to the employer's attention circumstances connected with his work which he reasonably believes are potentially harmful to his health and safety.

This case highlights the need for employers to carry out full health and safety assessments and, in particular, ensure that when employees raise safety issues, they are not treated adversely as a result.

This article copyright © 2006 Steeles Law. All rights reserved.