Academic journal article Business Law International

The Mobile Executive: English Employment Law

Academic journal article Business Law International

The Mobile Executive: English Employment Law

Article excerpt

In today's increasingly international business environment it is ever more common for executives to spend some of their career overseas. This article considers the English employment law considerations that apply to executives from England working overseas (outbound assignees), executives from overseas working in England (inbound assignees) and executives who live and work in separate countries (international commuters).

There can be significant differences between the nature and scope of employment protection. For example, the UK does not recognise the US concept of 'employment at will' and it should not be assumed that USstyle post-termination restrictions will be enforced by an English court.

This article starts by introducing the reader to English employment law and then considers the territorial application of English employment laws that derive from domestic statute, EU law and contract. It then considers the enforcement of non-UK injunctions, assignments within the EU and the application of EU data privacy laws, and finally addresses some practical issues to consider when drafting assignment documentation.

Nature of English employment law1

Employees working in England have three distinct sets of rights:

1. Employees enjoy rights derived from their contract of employment. These rights will be largely familiar to lawyers from common law jurisdictions although the English courts have in recent years developed an increasingly sophisticated body of law around the implied mutual duty of 'trust and confidence', which regulates the conduct of both employer and employee in the absence of express terms.2

2. Employees enjoy statutory employment protection, which is domestic in nature. These rights are conferred by statutes including the Employment Rights Act 1996 (ERA), which, among other matters, requires employees to be issued with a statutory statement of terms, to receive minimum notice of termination and to receive a redundancy payment if dismissed for economic reasons. It also includes a general right not to be unfairly dismissed and offers broad protection for whistleblowers.3 It is the possibility of recovering unfair dismissal compensation of up to £72,300 (in ordinary cases)4 that can make it attractive to bring a claim in England.

3. Employees enjoy rights that are derived from European Union (EU) law. These include rights relating to anti-discrimination, mandatory consultation with employee representatives, acquired rights on the sale of a business and regulation of working time (including the right to paid holidays). These EU laws are implemented in the UK by domestic laws such as the Equality Act 2010 in the case of discrimination law. Similar but not identical laws are in force across the EU.

In practice, the second and third categories overlap but the distinction is significant for the analysis that follows. Claims under the second and third categories are heard in specialist employment tribunals with favourable cost rules, whereas claims for breach of contract in the first category must generally be brought before the ordinary courts, which generally adopt the principle of loser pays.5

Contractual claims

The unfair dismissal jurisdiction discussed above is most significant for executives without generous contractual severance rights. However, an executive's contractual rights tend to be far more important for those executives who have substantial contractual entitlements or for the employer where there is a dispute about the post-termination restrictions that apply. Here there are two separate but linked issues. First, what is the applicable law for the contract and, secondly, which court has jurisdiction?

Applicable law of contract

The governing law of contracts is determined by EC Regulation 593/2008, known as 'Rome G. Rome I provides that the default law is the country in which or from which the employee habitually carries out his work. Temporary employment in a third country does not change the country of habitual employment (adopting a 'base test'). …

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