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	England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Diggins v Condor Marine Crewing Services Ltd [2009] EWCA Civ 1133 (13 October 2009) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2009/1133.html Cite as: [2010] IRLR 119, [2010] ICR 213, [2009] EWCA Civ 1133

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IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE EMPLOYMENT APPEAL TRIBUNAL

		Royal Courts of Justice Strand, London, WC2A 2LL
		13th October 2009

Lord Justice Elias:

1. The principal issue in this case is whether a seaman, who was employed on a ship but not one registered in a port in Great Britain, can in any circumstances bring a claim for unfair dismissal. The second issue is whether, assuming that he can, he is entitled to do so in the particular circumstances in this case.
2. The background facts are not in dispute and were not so before the Employment Tribunal. They are as follows. Condor Marine Crewing Services Limited, the appellant, is a company operating out of and registered in Guernsey. It employed Mr Diggins through a subsidiary company as a chief officer on board a vessel which plied its trade primarily between the Channel Islands and Portsmouth. The vessel itself is registered in Nassau in the Bahamas. For the duration of Mr Diggins' duties on board ship, which typically involved two-week rosters, he lived on the vessel. His home is in Lowestoft. Mr Diggins was dismissed with effect from 1 April 2007. He claimed that his dismissal was unfair and the company denies this. However, a preliminary issue raised before the Employment Tribunal was whether it had jurisdiction to hear his claim. The Employment Tribunal held that it did not, but that decision was overturned on appeal by the Employment Appeal Tribunal, HHJ Burke QC sitting alone. The EAT, in a judgment of conspicuous quality, concluded that the tribunal did in principle have jurisdiction to hear a claim for unfair dismissal, notwithstanding that the employee was employed on board a vessel registered outside Great Britain and that the relevant conditions necessary to satisfy the exercise of that jurisdiction existed in this case. Both these conclusions are the subject of appeal.

The relevant law

3. The right to claim for unfair dismissal was first introduced by the Industrial Relations Act 1971. Since then it has undergone a number of transformations and modifications and has been located in a number of different Acts of Parliament. The current law is contained in Part 10 of the Employment Rights Act 1996.
4. Three features of the legislation as they bear upon this case have, until changes by the Employment Relations Act 1999, remained constant, although the precise statutory language has changed from time to time. First, the right to claim for unfair dismissal -- and indeed for various other statutory rights too -- has been excluded from those who, under their contract of employment, ordinarily work outside Great Britain. Second, there has always been a provision which specifically identifies how that test should be applied with respect to persons employed to work on board a ship registered in the UK. Third, there have, in addition, been a range of specific provisions dealing expressly with the position of persons working on board ships, so, for example, share fishermen (broadly, those who receive a profit from the enterprise rather than being paid a wage) have been largely excluded from unfair dismissal and other rights. Merchant seamen as a group have also been excluded from the scope of certain other statutory rights.
5. Before 1999 the relevant legislation was as follows. Section 196, which is headed Employment Outside Great Britain, provided in subsection (2) that:

"The provisions to which this subsection applies do not apply to employment where under the employee's contract of employment he ordinarily works outside Great Britain."

Those provisions included the rights under Part 10, save for certain immaterial exceptions.

6. The application of that test does not apply, with respect, to those employed on board a ship registered in the UK by subsection (5), which was as follows:

"For the purposes of subsections (2) and (4), a person employed to work on board a ship registered in the United Kingdom shall be regarded as a person who under his contract ordinarily works in Great Britain unless --

(a) the ship is registered at a port outside Great Britain,

(b) the employment is wholly outside Great Britain, or

(c) the person is not ordinarily resident in Great Britain."

7. Section 199 is headed "Mariners" and disapplies to varying extents particular rights from particular categories of seamen. Share fishermen are dealt with by Section 1992 and 3 respectively. Subsections (4) and (5) then deal expressly with the position of merchant seamen. That legislation was altered by Section 32 of the Employment Relations Act 1999. It repealed both Section 1962 and subsection (5). However, the substance of the latter provision was maintained by adding two subsections to Section 199. These are now subsections 199(7) and 8 respectively. Section 199(7) is as follows:

"The provisions mentioned in subsection (8) apply to employment on board a ship registered in the register maintained under section 8 of the Merchant Shipping Act 1995 if and only if --

(a) the ship's entry in the register specifies a port in Great Britain as the port to which the vessel is to be treated as belonging.

(b) under his contract of employment the person employed does not work wholly outside Great Britain, and

(c) the person employed is ordinarily resident in Great Britain."

8. Subsection 8 identifies the relevant provisions and they include the right to claim for unfair dismissal under Part 10. It will be noted that the language of subsection (7) departs in certain respects from the old Section 1965 of the 1996 Act but in a way which materially alters its sense; in particular, the reference to the register maintained under Section 8 of the Merchant Shipping Act is to a register of ships in the United Kingdom. It is to be noted that jurisdiction can only be exercised, however, where the entry in the ship's register specifies a port in Great Britain; no doubt this is because there is a separate body of employment law relating to Northern Ireland and so ships registered there are dealt with by their own specific laws.
9. The question which then arose, following the repeal of Section 1962, was whether there was now any limitation at all on the jurisdiction of the tribunal to deal with somebody who had been unfairly dismissed. That matter was considered by the House of Lords in Lawson v Serco [2006] UKHL 3 [2006] ICR page 250. Their Lordships unanimously held that there was a limitation. Lord Hoffman, with whose speech Lord Woolf, Lord Rodger of Earlsferry, Lord Walker of Gestingthorpe and Baroness Hale of Richmond concurred, concluded that Parliament could not have intended that any employee employed anywhere in the world could take a claim for unfair dismissal before the British courts. He analysed the link which was necessary in order for the tribunal to exercise jurisdiction. He identified mariners as falling within the group of peripatetic employees and identified, as a relevant test for that group, whether their base was in the United Kingdom. I return to consider the details of that case later.
10. The case clearly establishes therefore that the mere fact that somebody is an employee who sometimes works outside the United Kingdom does not necessarily prevent him from claiming unfair dismissal if and when he is dismissed from employment; it depends whether he can establish the necessary link with the United Kingdom stipulated by the court in Serco. The question arising in this appeal is this: What is the relationship between the rules formulated by the House of Lords in Serco and the particular statutory provision in Section 199(7) dealing with the position of those working on British registered ships. Both parties accept that it is in principle no different to a relationship which formally existed between the general statutory exclusion for those ordinarily working abroad and the exception for those on British ships. Mr Meade, counsel for the company, submits that Section 199(7) is exhausted over the rights of those employed on ships. Either jurisdiction is afforded by that subsection or there is no jurisdiction to hear their claims. Accordingly, since the provision only applies to those working on ships registered in Great Britain, the tribunal has no jurisdiction to deal with the claims for unfair dismissal brought by an employee working on any other ship, wherever it operates and even if it operates exclusively within the United Kingdom. We were shown statistics which demonstrate that there are a number of ships falling into that category.
11. Mr Adjei, counsel for Mr Diggins, contends that this analysis involves a fundamental misconstruction of Section 199(7). That section applies only to those who are employed on ships registered under Section 8 of the Merchant Shipping Act. For such employees a tribunal has jurisdiction if, but only if, the three conditions set out in the subsection are satisfied. However, if they are not so employed the tribunal will still have jurisdiction provided the employee can bring himself within the application of the Serco principles. The question is one of construction of Section 199(7).
12. In my judgment, simply as a matter of language, the argument of Mr Adjei must prevail. It is not the natural reading of subsection (7) to say that it is intended to deal exhaustively with the position of all persons employed on ships. If that had been the intention, the subsection would necessarily, in my view, have been drafted differently. In particular, the phrase "if, but only if" would have had to be placed earlier in the Section. The subsection would have needed to say that the relevant rights are afforded to those employed on board ships if, but only if, the ship is registered in the appropriate UK register and if the other conditions apply. Instead, it identifies a class of persons, namely those employed on ships under Section 8 of the Merchant Shipping Act, and then provides the circumstances in which a tribunal will have jurisdiction with respect to that class.
13. In my judgment, the statutory history strongly supports this analysis. The specific provision dealing with UK registered ships has always been framed by adopting a deeming provision, which deems that persons on British registered vessels, provided the relevant conditions are met, are to be treated as if they were ordinarily employed in Great Britain even if the application of the usual rules would have dictated otherwise.
14. Furthermore, if the intention had been to give rights of unfair dismissal only to this limited category, it was a bizarre way of seeking to achieve that objective.
15. We have been taken to certain authorities which have discussed the effect of the deeming provision. These are Royle v Gloptik Management Ltd [1977] ICR 552 EAT, Wood v Cunard Line Ltd  [1990] IRLR 281 CA and The Geest Line v Wright, 26 July 1994 EAT/873/93. Mr Meade accepts that the Geest Line case is inconsistent with his analysis but he relies upon a certain passage in the Wood case to support his approach. I will not go into each of these authorities; they were dealt with very thoroughly by HHJ Burke in his judgment and he concluded that the three decisions in fact supported Mr Adjei's submission. I entirely agree with that conclusion for all the reasons he gives in his decision, paragraphs 25 to 28.
16. There is in principle no logical reason why those on board ships registered with the UK should automatically be excluded, even where they satisfy the Serco test for similarly placed peripatetic workers. As Mr Adjei points out, it would exclude from the exercise of the right cleaners employed to clean a foreign registered ship which travels in the Thames or a seaman living in Southampton who works on a ship registered outside Britain which operates solely in UK waters between the south coast and the Isle of Wight. Indeed, to exclude them would leave arbitrary differences between those working on board aircraft and those employed on ships. The former can clearly bring themselves within the jurisdiction if they are based here, as the Serco case demonstrates, whereas on Mr Meade's argument the latter would be unable to do so. Mr Meade suggests that this is irrelevant to the issue of construction, I do not agree. It is not at the forefront of the argument, but in my view the practical implications of one interpretation as against another would always be relevant to the question of construction.
17. I therefore have no doubt that Mr Meade's primary argument is wrong. However, in deference to his detailed submissions I deal briefly with certain other arguments he advanced.
18. First, he said it would be inconsistent with the principle of comity if the jurisdiction of the English courts were to extend to regulating the social affairs of those who work on board vessels with a foreign flag. I do not accept that. As Lord Hoffman pointed out in the Serco case, it is indeed, in part at least, the interests of comity which preclude the UK legislature from seeking to regulate the affairs of anyone, wherever they may be situated in the world, but the issue here is what link ought to be established in order to justify a tribunal in Great Britain exercising unfair dismissal jurisdiction. It is open to Parliament to decide whether and to what extent that link is needed. Formerly they did so; the expressed statutory provision was repealed, but the House of Lords in Serco filled the breach by laying down certain principles in their place for determining what is deemed to be a sufficient link with the UK. I do not think that any argument based on comity is of assistance here.
19. Second, reliance was placed on certain observations of Lord Hoffman in Serco which, submits Mr Meade, support his analysis. Lord Hoffman made some observations in the course of his speech to the effect that Parliament had made a provision for mariners with respect to the issue of jurisdiction. However, in my judgment, he was not thereby intending to indicate that the provision they had made was exhaustive of the rights of all those serving on board ships. That, in my judgment, is an impossible inference to draw from the comments relied upon. Moreover, as HHJ Burke noted below, their Lordships in Serco heard no argument in relation to the proper scope of Section 199(7). It was not an issue before the court and in my judgment it is highly unlikely that Lord Hoffman even had in mind the kind of argument that is being advanced in this case. Accordingly, I do not think this assists Mr Meade either.
20. Third, Mr Meade observed that if his analysis is wrong it could lead to some curious results. For example, it may be that someone on board a British registered ship would be excluded from claiming because not ordinarily resident in Great Britain, whereas a person on a foreign registered ship would not automatically be ruled out by that consideration alone and might be able to establish his base here. I doubt whether in practice the anomaly will exist since it is very unlikely that anyone who is ordinarily resident would be able to establish a base in the UK. In any event, I do not accept that any such limited anomaly which might exist can dictate a construction of Section 199(7) which is at odds with its plain wording.
21. It follows that, in my judgment, the Tribunal was not prevented from exercising jurisdiction simply because the ship on which Mr Diggins worked was registered in the Bahamas. The only issue therefore is whether the tribunal has jurisdiction under the Serco principles.

Did the Tribunal have jurisdiction?

22. The Employment Tribunal did not need to engage with this question, given that it had found that there was no jurisdiction in any event by reason of the ship being registered outside Great Britain, so it expressed no view on the matter. However, the EAT addressed it and concluded that Mr Diggins was a peripatetic employee who was based in Great Britain at the time of dismissal. He gave his reasons as follows:

"I have referred to the Tribunal's findings at paragraph 4 of the judgment. Although Condor were based in Guernsey, the question is not where they were based but where Mr Diggins was based. Mr Croft was managed from Hong Kong (and although Lord Hoffman does not say so, it is clear from the report below that his employers were a Hong Kong company); but Mr Croft's tours of duty began and ended in London. Similarly Mr Diggins' tours of duty started and finished in Portsmouth where he returned at the end of each duty. He lived in Lowestoft. In these circumstances there is no point in remitting to the Tribunal; the primary facts are sufficiently clear; and from them I conclude that Mr Diggins was based in the UK."

23. There are two questions arising here. First, Mr Meade submitted that since the Tribunal did not make any findings of fact on the matter, the EAT should have remitted it, unless there was only one possible answer to the question in light of the facts found by the Tribunal. He submits that that cannot be so. It was necessary to have regard to the fact that the employer was based in Guernsey, much of the travel took place outside the United Kingdom and the ship was registered in Nassau. These were not matters expressly averted to by HHJ Burke and had they been considered by the Employment Tribunal, they may have resulted in a different decision. I do not accept that the EAT was wrong to determine the issue itself. It is pertinent to note that in the case of Lawson v Serco Lord Hoffman expressed the view that the question whether, on given facts, a case falls within the territorial scope of Section 94(1)  should be treated as a question of law, although it is one on which the primary fact-finder is entitled to considerable respect.
24. In this case the primary fact-finder has expressed no view on the issue. Since it is a question of law it seems to me that it was appropriate for the EAT to reach a conclusion on the matter. It was not contended that it was necessary to find any further facts before the decision could be reached, or at least Mr Meade could identify no material facts which would be likely to have affected the analysis one way or the other. Moreover, it would be wholly inconsistent with the overriding objective -- and in particular to the need to save unnecessary costs -- for the matter to be remitted to the Employment Tribunal in circumstances where the determination of the jurisdiction question raises an issue of law which could then be appealed again to the Employment Appeal Tribunal. In my judgment, the EAT was in as good a position as the Employment Tribunal to reach a conclusion and there is in truth no merit in remitting the matter. The question then is whether HHJ Burke came to the correct conclusion when applying the Serco principles.
25. Lord Hoffman in Serco distinguished between three categories of case. First, there was the standard case of those working in Great Britain; second, the position of peripatetic employees; and third, those of expatriate employees.
26. We are clearly concerned with the second category. Mr Meade floated the suggestion that we may not be, and that the proper analysis may be that Mr Diggins worked on the ship and should be treated as an expatriate employee working and occasionally entering the United Kingdom. I think, with respect, that is wholly unrealistic; and, in any event, Lord Hoffman in terms treated mariners as an example of peripatetic employees. In any event, this was not an argument advanced below and it cannot, in my view, be run now.
27. As I have said, Lord Hoffman considered that the principles to be applied for determining whether somebody fell within the jurisdiction or not was, for peripatetic employees, whether they had a base in the United Kingdom. His reasoning was as follows:

"28 As Crofts v Veta Ltd [2005] ICR 1436 shows, the concept of employment in Great Britain may not be easy to apply to peripatetic employees. The Act continues to make specific provision for one class of peripatetic worker, namely mariners, but I do not think that one can draw any inferences about what Parliament must have intended in relation to other peripatetic workers such as airline pilots, international management consultants, salesmen and so on. The solution adopted under the old "ordinarily works outside Great Britain" formula was to ask where the employee was based. In Wilson's case [1978] ICR 376, 387, which concerned a management consultant, Megaw LJ said:

'In such a case as the present it appears to us that the correct approach is to look at the terms of the contract, express and implied (with reference, it may be, to what has happened under the contract, for the limited purpose which we have expressed above) in order to ascertain where, looking at the whole period contemplated by the contract the employee's base is to be. It is, in the absence of special factors leading to a contrary conclusion, the country where his base is to be which is likely to be the place where he is to be treated as ordinarily working under his contract of employment. Where his base, under the contract, is to be will depend on the examination of all relevant contractual terms. These will be likely to include any such terms as expressly define his headquarters, or which indicate where the travels involved in his employment begin and end; where his private residence- his home- is, or is expected to be; where, and perhaps in what currency, he is to be paid; whether he is to be subject to pay national insurance contributions in Great Britain. These are merely examples of factors which, among many others that may be found to exist in individual cases, may be relevant in deciding where the employee's base is for the purpose of his work, looking to the whole normal, anticipated, duration of the employment.'

29 As I said earlier, I think that we are today more concerned with how the contract was in fact being operated at the time of the dismissal than with the terms of the original contract. But the common sense of treating the base of a peripatetic employee as, for the purposes of the statute, his place of employment, remains valid. It was applied by the Court of Appeal to an airline pilot in Todd v British Midland Airways Ltd [1978] ICR 959, 964, where Lord Denning MR said:

'A man's base is the place where he should be regarded as ordinarily working, even though he may spend days, weeks or months working overseas. I would only make this suggestion. I do not think that the terms of the contract help much in these cases. As a rule, there is no term in the contract about exactly where he is to work. You have to go by the conduct of the parties and the way they have been operating the contract. You have to find at the material time where the man is based.'

30 Lord Denning MR's opinion was rejected as a misguided obiter dictum by the Court of Appeal in Carver's case [1999] ICR 991 and it is true that the language of section 196 and the authorities such as Wilson's case [1978] ICR 376 insisted upon more attention being paid to the express or implied terms of the contract. But now that section 196 has been repealed, I think that Lord Denning MR provides the most helpful guidance."

28. It is pertinent to note how those principles are applied to one of the cases which was the subject of consideration by their Lordships in the Serco case. The applicant was an airline pilot employed by the respondent company, which was a wholly owned subsidiary of a Hong Kong based airline. Both the respondent and its parent company were incorporated in Hong Kong. However, certain aircraft crew were based predominantly at airports outside Hong Kong. The applicant himself was based at Heathrow and lived in the United Kingdom. He claimed unfair dismissal and the question was whether the Tribunal had jurisdiction. The Employment Tribunal held that it did, but the employer successfully appealed. The Court of Appeal reinstated the decision of the Employment Tribunal and the House of Lords approved that decision. Lord Hoffman set out the facts in somewhat greater detail than I have done here. I am then referred to the following passage in the decision of the Employment Tribunal:

"Pursuant to the basings policy the Veta applicants were required to resign their [Cathay] employment and did so irrevocably. They were allocated new bases on the footing that they would remain there indefinitely. They were repatriated from Hong Kong and ceased to be resident there. Their tours of duty began and ended in London. Even if a flying cycle began elsewhere, the tour of duty began when they reported to London Heathrow for the purpose of being 'positioned' to the port from which the flying cycle was to commence. They were paid a salary designed to reflect a lower cost of living than that experienced in Hong Kong. In short, the centre of their operations was, quite manifestly, London."

29. In my judgment, this analysis makes clear that, as HHJ Burke pointed out, the question was not where the employer is based, but where the employee is based. In Serco the airline pilot was spending his hours on duty flying all around the world; that, however, did not prevent his base being in the United Kingdom. That was where their tours of duty began and where they ended.
30. In my view, if one asks where this employee's base is, there can only be one sensible answer: it is where his duty begins and where it ends. The company may have been based in Guernsey but Mr Diggins had no real connection with that place and he had even less with the Bahamas, where the ship is registered. I do not accept that the considerations of where the company operates or where the ship is registered are likely to have any significant influence on the question where a particular employee was based. In my judgment, HHJ Burke correctly reached the conclusions he did, essentially for the reasons he gave. The question must be asked and answered as a practical matter, as Lord Hoffman made plain. On that approach, it seems to me that the base was in Great Britain.
31. For these reasons, which really do little more than reiterate those expressed so cogently by HHJ Burke, this appeal fails.

Mr Justice Coleridge:

32. I agree.

Order: Appeal dismissed