February 20, 2017

Where does the sun set on employment law for marine employees?

Sandy Kemp, a Clyde & Co (Scotland) LLP partner, has successfully represented the Respondents in a claim that was heard in the Employment Appeal Tribunal. The case, Wittenberg v Sunset Personnel Services and Others, decided that there was no jurisdiction for claims of unfair dismissal, discrimination and for holiday pay where the employee was employed by a UK company, but the work was performed outside the territory of the European Union, by someone resident in Germany.

So what happened? Mr Wittenberg was a German employee, living in Germany but he was employed as a Chief Engineer on a ship owned by a US based company, but held to have been employed by a Company in Aberdeen. The contract stated that it was governed by UK law.  Mr Wittenberg spent most of his time on the ship, working off-shore Nigeria and never worked in UK waters.

When his contract was terminated, Mr Wittenberg brought claims in Scotland for breach of contract, unfair dismissal, failure to pay holiday pay and race and age discrimination. Jurisdiction for breach of contract was conceded, but disputed for the other statutory claims. The Tribunal dismissed those statutory claims on the basis of jurisdiction and he appealed, arguing that he should be entitled to bring these claims, but was he entitled to do so?

There are different rules governing whether an employee can bring different types of claim.

It was conceded that that Mr Wittenberg could bring claims for breach of contract in the UK/Scotland, as his employer had a place of business there.  However, just because he could bring a contract claim did not mean he could also bring all of his other claims. 

Claims for failure to pay holiday pay and discrimination are based both in UK and EU law.  Mr Wittenberg argued that as a German citizen who came to and went from his place of work back to Germany, he should benefit from the protection of EU laws.  The court disagreed, deciding that there was no reason why the territorial reach of EU rights should automatically extend beyond the EU to cover Mr Wittenberg when he was working in offshore Nigeria.

Aside from EU law, additional regulations apply to off-shore mariners claiming discrimination in the UK.  To succeed, Mr Wittenberg had to show that he worked:

a) wholly or partly within Great Britain (including United Kingdom waters adjacent to Great Britain); and also

b) on a UK ship registered in a port in Great Britain.

As Mr Wittenberg worked in offshore Nigeria, he did not work wholly or partly within Great Britain and so he was not eligible to claim discrimination. The ship was registered in Vanuatu. The arguments for him that UK regulations should be construed purposively was rejected by the EAT.

Could he claim unfair dismissal? Generally, the statutory right not to be unfairly dismissed will only apply to employees who are working in Great Britain at the time of their dismissal.  It may also apply where there is a sufficiently strong connection between the employment relationship and Great Britain but when the Employment Tribunal considered the facts it found that apart from having a UK contract; Mr Wittenberg neither lived nor worked in Britain; he did not embark or disembark from the UK.  Although he worked for a British company, the ship was not GB registered and his employer merely engaged crew for the vessel.  His employer did not supervise or direct the day to day work that he was doing so that there was little meaningful connection between Mr Wittenberg and the UK. 

The appeal tribunal saw no reason to disagree with the Tribunal’s assessment, so that Mr Wittenberg’s attempt to bring an unfair dismissal claim also failed. The case has been remitted to the Tribunal to determine the breach of contract claim that remains.

So what implications does this case have for employers in the marine sector? It’s tempting not to worry about what might go wrong in an employment relationship before it begins but it is worth considering what laws will govern an employment contract and what rights an employee might have, even if that employee is not based in Britain.  If the employer is UK based, the employee travels to and from a British flagged vessel from the UK and works for the benefit of a UK company then it becomes more likely that they will have UK employment rights, including those emanating from the EU.  Where the vessel is not registered in Britain, and where the work carried out is outside Britain, indeed outside the EU, it is less likely that they have either UK or EU employment rights. Consider with which country the employee may have the closest connection, the circumstances surrounding the work they carry out, and where they are carrying out their work and take advice early on about what contractual arrangements there can be, and what rights the employee might have. If there are limited or no rights in the UK, it is possible that they may arise in other jurisdictions.