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	United Kingdom Employment Appeal Tribunal
You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> Cameron v Navy, Army & Air Force Institutes (NAAFI) [2006] UKEAT 0125_06_1412 (14 December 2006) URL: http://www.bailii.org/uk/cases/UKEAT/2006/0125_06_1412.html Cite as: [2006] UKEAT 0125_06_1412, [2006] UKEAT 125_6_1412

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APPEARANCES

 

Mr E Burke	No attendance. Written submissions
The British Council	Mr Tom Linden (of Counsel) Instructed by: Messrs Mischon de Reya Solicitors Summit House 12 Red Lion Square London WC1R 4QD
ADT Fire & Security Plc	Mr Bruce Carr (of Counsel) Instructed by: Messrs Eversheds LLP Solicitors 115 Colmore Row Birmingham B3 3AL
Mr D Speyer	Ms Adrienne Morgan (of Counsel) Instructed by: Employment Law Plus Stepstone House Old Moor Milton Abingdon Oxon OX14 4ED
Mr J Cameron	Mr John Bowers (One of her Majesty's Counsel) Benjimin Burgher (of Counsel) Instructed by: Messrs Bolt Burdon Kemp Solicitors 16 Theberton Street Islington London N1 OQX
Navy, Army and Air Force Institutes (NAAFI)	Mr Mark Sutton Mr Marcus Pilgerstorfer (of Counsel) Instructed by: Messrs Dolmans Solicitors 17-21 Windsor Place Cardiff CF10 3DS


 


Summary

Unfair dismissal and Race Relations Act 1976

Unfair dismissal – Exclusions including worker/jurisdiction

Three cases were stayed pending the judgment of the House of Lords in Lawson v Serco [2006] ICR 250. The appeal in the British Council case was dismissed on withdrawal after the hearing and before the judgment. In ADT, the Employment Tribunal correctly held that the Claimant was employed by the Respondent, albeit that he had not had his contract of employment transferred to it by operation of TUPE. He had worked continuously abroad for seven and a half years. Now applying Serco, his case did not fit any of the categories and so the Tribunal did not have jurisdiction to hear his unfair dismissal claim.

In the NAAFI case, the Claimant's right to claim unfair dismissal was conceded post-Serco. There was no dispute that under the old Disability Discrimination Act 1995, jurisdiction was excluded since he had worked in Germany for over 30 years. He could not bring a claim for dismissal or disability discrimination in the German labour court if the NATO Status of Forces Agreement 1949 which exclude such rights is to be given effect by German law. He could not bring a claim in Britain under the Framework Directive 2000/78/EC, relying on Mangold v Helm, because the date for transposition of the directive had not arrived and no measure was taken by the United Kingdom to frustrate its transposition. The Claimant's Convention rights were not breached since he had no substantive right upon which to base a Convention right. The EAT declined to make a reference to the ECJ or to give permission for an appeal to the Court of Appeal so that the Claimant could seek a declaration of incompatibility under the Human Rights Act 1998.

HIS HONOUR JUDGE McMULLEN QC

Introduction

1. These cases concern British subjects who, while working abroad, variously claim unfair dismissal, race discrimination and disability discrimination under the domestic statutes available to people working in Britain, each of which has some territorial limit. Required reading is the Judgment of the House of Lords through the speech of Lord Hoffmann in three appeals known generically Lawson v Serco [2006] ICR 250 (Serco). Our three cases are the last part of a cohort of appeals stayed pending Serco, and not resolved by the parties' application of it.
2. The judgment represents the views of all three members. We will refer to the parties as Claimant and Respondent.
3. All three cases were stayed by the EAT. Following further case management orders sending the appeals to a full hearing, Burke v British Council (British Council) and ADT v Speyer (ADT) were heard together; Cameron v NAAFI (NAAFI) was heard next, all by the same three person division of the EAT.
4. Mr Burke said he would not attend but be represented. On the day before the hearing he said his counsel was due for surgery and sought an adjournment. The Respondent supported the adjournment because it was engaged in talks to settle a claim of race discrimination brought by the Claimant in the federal court in Washington DC. The last time hope was alive on this front was 6 September 2006. No rudimentary information was given to us. No communication was received from the person described by the Claimant as counsel. He is not counsel in the UK. We considered the overriding objective, including the direction given for this case emanating from a Chairman-alone judgment, and therefore by s28 ETA to be heard by a judge alone unless otherwise ordered, to be heard by the three person bench hearing the other two cases. We noted that no skeleton argument had been supplied, contrary to the rules, by the Claimant's representative but the Claimant had himself prepared and lodged it. There was no injustice to the Claimant as he had made his own representations. We decided to hear the case in the Claimant's absence. Mr Linden who represents the British Council, and who appeared in Serco, has been scrupulous to ventilate any possible point the Claimant might have raised had he been here. After our consideration of the cases, and the preparation of this judgment, the parties consented to Mr Burke's withdrawal of the appeal and its dismissal. As there is no live issue between them there is no judgment. Nevertheless we will preserve minimal aspects of the case as parts were relied on by other parties.

The issues and outcomes

5. The essential issue in each case decided prior to Serco was to see if the relevant statute, outlawing unfair dismissal, race discrimination or disability discrimination, applied while the Claimant worked abroad. Before different Employment Tribunals, the British Council and NAAFI proved that the Employment Tribunal lacked jurisdiction and ADT failed to do so. In the NAAFI case alone, issues arise under the EU treaty, the ECHR and the NATO Agreement applicable to British forces and civilians in Germany.
6. In summary the respective Employment Tribunals decided that:-

a) Mr Burke who worked for the British Council in Washington for three years could not claim unfair dismissal and race discrimination. That Judgment is untouched since the appeal is withdrawn.

b) Mr Speyer, who worked for ADT in the Far East for seven years could claim unfair dismissal, unlawful deductions and wrongful dismissal. He was awarded substantial compensation and damages. We disagree and substitute a Judgment that there is no jurisdiction except for wrongful dismissal. Serco does not provide him with a passport to the British Tribunal.

c) Mr Cameron, who worked for NAAFI in British bases in Germany for 30 years, could not claim unfair dismissal and disability discrimination. Since Botham v MoD (one of the three Serco cases in the Lords) the jurisdiction to claim unfair dismissal is conceded. We agree there is no jurisdiction on the disability discrimination claim.

The legislation

7. For the purposes of unfair dismissal, only section 94(1) of the Employment Rights Act 1996 is relevant and it provides that "an employee has the right not to be unfairly dismissed by his employer."
8. It was conceded in Serco that some territorial limit is imposed upon that right and that concession was held to be correct.
9. For the purposes of race discrimination, Race Relations Act 1976 section 4(1) provides "it is unlawful for a person in relation to employment by him at an establishment in Great Britain, to discriminate against another…."
10. Following legislative changes on 19 December 1999 the law is as follows:-

"8 Meaning of employment at establishment in Great Britain

(1) For the purposes of this Part ("the relevant purposes"), employment is to be regarded as being at an establishment in Great Britain if the employee-

(a) does his work wholly or partly in Great Britain; or

(b) does his work wholly outside Great Britain and subsection (1A) applies.

(1A) This subsection applies if …-

(a) the employer has a place of business at an establishment in Great Britain;

(b) the work is for the purposes of the business carried on at that establishment; and

(c) the employee is ordinarily resident in Great Britain-

(i) at the time when he applies for or is offered the employment, or

(ii) at an y time during the course of the employment.]"

11. For the purposes of disability discrimination, relevant in the NAAFI case, the provision applicable at the time of Mr Cameron's dismissal is section 4 of the Disability Discrimination Act 1995. This makes it unlawful for an employer to discriminate against a disabled person but "where an employee does his work wholly outside Great Britain, his employment is not to be treated as work at an establishment in Great Britain". Jurisdiction is denied.
12. A series of amendments took effect on 1 October 2004 bringing the DDA into line with the RRA (above) but it is disputed that had Mr Cameron been dismissed after that date he would have been entitled to bring his claim. It is accepted on his behalf that this now complies with the EU framework directive 2000/78/EC and it is asserted that if it had been in place at the time of his dismissal, Mr Cameron would have been able to claim disability discrimination in the Employment Tribunal in Southampton. We will deal with other legislative measures applicable only in the NAAFI case separately below.

The legal principles

13. The legal principles to be applied in these cases are to be found principally in the speech of Lord Hoffmann with whom all other Law Lords agreed in Serco. That case involved appeals in three distinct cases, the facts of which were summarised as follow:-

"2. The facts of the three cases illustrate the situations in which the question of territorial scope may arise. In Lawson v Serco Ltd the employer is a substantial United Kingdom company which operates worldwide providing services to the public and private sector. It engaged Mr Lawson, a former RAF policeman, to work as a security supervisor on Ascension island, where the company had a contract to service the RAF base. After six months on the island, Mr Lawson resigned, claiming that he had been constructively dismissed. Ascension is a 35 square mile volcanic island in the South Atlantic with no indigenous population. About 1100 people are stationed there, mostly working in defence or communications. It is a dependency of the British Overseas Territory of St Helena.

3. In Botham v Ministry of Defence the Ministry of Defence first employed Mr Botham in 1988 as a "UK-based youth worker" with the British Forces Germany Youth Service. Thereafter he worked under a succession of contracts and eventually as an established UK-based youth worker at various Ministry of Defence establishments in Germany. In accordance with the NATO Status of Forces Agreement of 1951 he was part of the "civil component" of the British Forces in Germany and treated as resident in the UK rather than Germany for various purposes including taxation. In September 2003 he was summarily dismissed on allegations of gross misconduct but claims that his dismissal was unfair.

4. In Crofts v Veta Ltd the employer is a wholly-owned subsidiary of Cathay Pacific Airways Ltd. Both are Hong Kong companies. Veta's only function appears to be to employ aircrew for Cathay aircraft. Cathay operated a "permanent basings policy" by which some aircrew could be assigned a permanent "home base" outside Hong Kong. Mr Crofts was based at Heathrow, which enabled him to live in the United Kingdom. In July 2001 Mr Crofts was dismissed by Vera in circumstances which he claims were unfair.

5. Thus in Lawson and Botham employer and employee both had close connections with Great Britain hut all the services were performed abroad. In Crofts the employer was foreign but the employee was resident in Great Britain and, although his services were peripatetic, they were based in Great Britain. In Lawson the Court of Appeal [2004] ICR 204 said section 94(I) did not apply to a case in which all the services were performed abroad and this ruling was followed by the Employment Appeal Tribunal and the Court of Appeal in Botham. In Crofts, however, the Court of Appeal (by a majority) [2005] ICR 1436 decided that Mr Crofts's basing in Great Britain was sufficient to enable the employment tribunal to treat section 94(I) as applicable."

14. Lord Hoffmann held that the right to claim unfair dismissal is subject to some territorial limitation and where the line is drawn is a question of construction of section 94(1): Serco paragraph 6.
15. Lord Hoffmann adopted this approach:-

"16. Perhaps the most simple and elegant solution was that adopted by Pill LJ in the Serco Case [2004] ICR 204, 207, para 8:

"The question is: what are the employments covered by the section? The answer, in our judgment, is straightforward though it may be difficult to apply in some cases: employment in Great Britain."

Applying that principle he started with the paradigm case:-

"25. Having said that, I am sure that Pill LJ was right in saying that what Parliament must have intended as the standard, normal or paradigm case of the application of section 94(?) was the employee who was working in Great Britain."

16. In determining the answer to this question, the focus is upon where the employee was working at the time of dismissal:-

"25. As I said earlier, the fact that Parliament in 1971 and subsequently until 1999 thought that 'ordinarily working in Great Britain' was an appropriate criterion for territorial scope remains indicative of what the general intent is likely to have been. Section 196, however, attributed decisive importance to whether "under the employee's contract of employment" he ordinarily worked outside Great Britain. This emphasis on the contract rather than the factual position at the time of dismissal was in accordance with the prevailing attitude to the employment relationship in the early seventies. It was seen simply as a matter of contract, the terms being agreed at the inception of the employment relationship. In Wilson v Maynard Shipbuilding Consultants AB [1978] ICR 376, 385c, Megaw LJ said that this made good sense: "It means that the question whether or not this important statutory right exists is settled at, and can be ascertained by reference to, the time of the making of the contract."

26. In practice however this concentration on the original contract could produce arbitrary and counter-intuitive results when, as often happens, the contract allowed the employer to direct where the employee would work. In Carver v Saudi Arabian Airlines [1999] ICR 991 Mrs Carver was employed as a flight attendant under a contract made in 1986. It said nothing about where she was to work, but she was trained in Jeddah and then spent four years based in Bombay. She then moved to London, where she remained based at Heathrow until she resigned in circumstances which she said amounted to an unfair constructive dismissal. The Court of Appeal held that section 94(I) did not apply because the original contract had contemplated that she would be based at Jeddah.

27. Since 1971 there has been a radical change in the attitude of Parliament and the courts to the employment relationship and I think that the application of section 94(I) should now depend upon whether the employee was working in Great Britain at the time of his dismissal, rather than upon what was contemplated at the time, perhaps many years earlier, when the contract was made. I would therefore expect Mrs Carver's case to be decided differently if it came before the courts today. The terms of the contract and the prior history of the contractual relationship may be relevant to whether the employee is really working in Great Britain or whether he is merely on a casual visit (for example, in the course of peripatetic duties based elsewhere) but ordinarily the question should simply be whether he is working in Great Britain at the time when he is dismissed. This would be in accordance with the spirit of the Posted Workers Directive, even though that Directive is not applicable to the right not to be unfairly dismissed."

17. Lord Hoffmann then went on to deal with an exception to this rule described as peripatetic employees for he said this:-

"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 he 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."

He next went on to consider a further exception of expatriate employees and said this:-

"35. The problem of what I might call the expatriate employees is rather more difficult. The concept of a base, which is useful to locate the workplace of a peripatetic employee, provides no help in the case of an expatriate employee. The Ministry of Defence accepts that Mr Botham fell within the scope of section 94(1) but his base was the base and the base was in Germany.

36. The circumstances would have to be unusual for an employee who works and is based abroad to come within the scope of British labour legislation. But I think that there are some who do. I hesitate to describe such cases as coming within an exception or exceptions to the general rule because that suggests a definition more precise than can be imposed upon the many possible combinations of factors, some of which may be unforeseen. Mr Crow submitted that in principle the test was whether, despite the workplace being abroad, there are other relevant factors so powerful that the employment relationship has a closer connection with Great Britain than with the foreign country where the employee works. This may well be a correct description of the cases in which section 94(I) can exceptionally apply to an employee who works outside Great Britain, but like many accurate statements, it is framed in terms too general to be of practical help. I would also not wish to burden tribunals with inquiry into the systems of labour law of other countries. In my view one should go further and try, without drafting a definition, to identify the characteristics which such exceptional cases will ordinarily have."

18. Within this category were two illustrations: an employee working abroad for a British business conducted in Britain, and an employee working in what amounts to a British enclave in a foreign country, for he said this:-

"37. First, I think that it would be very unlikely that someone working abroad would be within the scope of section 94(1) unless he was working for an employer based in Great Britain. But that would not be enough. Many companies based in Great Britain also carry on business in other countries and employment in those businesses will not attract British law merely on account of British ownership. The fact that the employee also happens to be British or even that he was recruited in Britain, so that the relationship was "rooted and forged" in this country, should not in itself be sufficient to take the case out of the general rule that the place of employment is decisive. Something more is necessary.

38. Something more may be provided by the fact that the employee is posted abroad by a British employer for the purposes of a business carried on in Great Britain. He is not working for a business conducted in a foreign country which belongs to British owners or is a branch of a British business, but as representative of a business conducted at home. I have in mind, for example, a foreign correspondent on the staff of a British newspaper, who is posted to Rome or Peking and may remain for years living in Italy or China but remains nevertheless a permanent employee of the newspaper who could be posted to some other country. He would in my opinion fall within the scope of section 94(I). The distinction is illustrated by Financial Times Ltd v Bishop (unreported) 25 November 2003, a decision of the Employment Appeal Tribunal delivered by Judge Burke QC. Mr Bishop was originally a sales executive working for the "Financial Times" in London. At the time of his dismissal in 2005 he had been working for three years in San Francisco selling advertising space. The employment tribunal accepted jurisdiction on the ground that under European rules it had personal jurisdiction over the "Financial Times": see Article 19 of Council Regulation (EC) No 44/2201 (OJ 2001 L12., p 1). But that was not a sufficient ground: the Regulation assumes that the employee has a claim to enforce, whereas the question was whether section 94(I) gave Mr Bishop a substantive claim. Having set aside this decision, the appeal tribunal was in my opinion right in saying that the findings of fact were inadequate to enable it to give its own decision. The question was whether Mr Bishop was selling advertising space in San Francisco as a part of the business which the "Financial Times" conducted in London or whether he was working for a business which the "Financial Times" or an associated company was conducting in the United States: for example, by selling advertising in the "Financial Times" American edition. In the latter case, section 94 would not in my view apply. (Compare Jackson v Ghost Ltd [2003] IRLR 824, which was a clear case of employment in a foreign business.)

39. Another example is an expatriate employee of a British employer who is operating within what amounts for practical purposes to an extra-territorial British enclave in a foreign country. This was the position of Mr Botham working in a military base in Germany. And I think, although the case is not quite so strong, that the same is true of Mr Lawson at the RAF base on Ascension Island. While it is true that Mr Lawson was there in a support role, employed by a private firm to provide security on the base, I think it would be unrealistic to regard him as having taken up employment in a foreign community in the same way as if Serco Ltd were providing security services for a hospital in Berlin. I have no doubt that Bryant v Foreign and Commonwealth Office (unreported) 10 March 2003, in which it was held that section 94(1) did not apply to a British national locally engaged to work in the British Embassy in Rome, was rightly decided. But on Ascension there was no local community. In practice, as opposed to constitutional theory, the base was a British outpost in the South Atlantic. Although there was a local system of law, the connection between the employment relationship and the United Kingdom was overwhelmingly stronger."

19. In a residual category, indicating that they are not closed, is an expatriate who has equally strong connections to the above categories:-

"40. I have given two examples of cases in which section 94(I) may apply to an expatriate employee: the employee posted abroad to work for a business conducted in Britain and the employee working in a political or social British enclave abroad. I do not say that there may not be others, but I have not been able to think of any and they would have to have equally strong connections with Great Britain and British employment law. For the purposes of these two appeals, the second of these examples is sufficient. It leads to the conclusion that the appeals of both Mr Lawson and Mr Botham should be allowed."

20. Applying that analysis, all three Claimants in those appeals established or maintained jurisdiction.
21. In the first case to be decided in the EAT following this judgment, Lady Smith in Anderson v Stena Drilling PTE Ltd UKEATS/0080/04 in Edinburgh summed up the analysis as follows:-

"25. It seems, respectfully, that what we are to take from this is that section 94(1) must not be read as though it had the formula "working in Great Britain at the material time" inserted into it. It should, however, be remembered at all times that the place where an employee works can be regarded as having persuasive force when considering whether there is jurisdiction. In the standard case, the fact that an employee as a matter of fact works in Great Britain will be sufficient for jurisdiction. In the case of a peripatetic employee, the question of whether there is jurisdiction under section 94(1) falls to be answered by determining where it is that the employee is based. Thus there will not, it seems, be jurisdiction in the case of a peripatetic employee who works in Britain if his work base is elsewhere. Conversely, the fact that the peripatetic employee works mainly outside Britain will not prevent there being jurisdiction if it is established that his work base was in Great Britain, such as the claimants in the Veta cases. Finally, whilst jurisdiction may be established in the case of the expatriate employee, it seems that it is expected that the cases in which it arises will be less common and, importantly, that their Lordships expect the minimum though not, of itself sufficient, requirement to be that the employer is based in Great Britain.

The ability of an appellate court to intervene in findings by an Employment Tribunal was dealt with by Lord Hoffmann under the heading "Fact or law?" when he said this:-

"34. In my opinion, therefore, the question of whether, on given facts, a case falls within the territorial scope of section 94(I) should be treated as a question of law. On the other hand, it is a question of degree on which the decision of the primary fact-finder is entitled to considerable respect."

22. Lady Smith accepted that Lord Hoffmann had approved the approach of Pill LJ (cited at para 15 above) applying Lord Denning MR's base test as a starting point. She held that an employee who had been employed on an oil rig in the Far East by a company registered in Singapore could not establish jurisdiction.
23. As we see it from the judgments of Lord Hoffmann and Lady Smith, there are five gateways to jurisdiction:

a) The standard case; the employee is working in Great Britain at the time when he is dismissed with the focus on that time rather than on the time the contract was made.

b) The peripatetic employee; the employee's base i.e. the place where he is ordinarily working, as judged not so much by the terms of the contract but by the conduct of the parties, is in Great Britain.

c) The expatriate (1); the employee who works and is based abroad and who is the overseas representative, posted abroad by an employer for the purposes of a business carried on in Britain e.g. foreign correspondent of the Financial Times (see Lord Hoffmann para 38).

d) The expatriate (2); the employee who works in a British enclave abroad; jurisdiction will be established provided the employee was recruited in Britain; this was the position of Mr Botham (Germany) and Mr Lawson (Ascension Island) but not of Ms Bryant (British Embassy, Rome) who was engaged in Rome: Bryant v Foreign and Commonwealth Office EAT/174/02 10 March 2003.

e) The expatriate (3); the employee who has equally strong connections as the above two with Britain and British employment law.

24. In both of the illustrations provided by Lord Hoffmann - the foreign correspondent of a British newspaper and the person working within an enclave - the premise is set out. Something more is required. Something more may be provided by the fact that the employee is posted abroad by a British employer for the purposes of a business carried on in Britain. In order to found jurisdiction in Britain the "something more" required is that the Claimant be recruited otherwise than locally. This is the Bryant case, where the British official was recruited in Rome. Further, it is not the Lawson case where there was no local community on Ascension Island to recruit from and no local legal system.
25. We have considered the judgment of the EAT, Burton P and members, in Bryant EAT/174/02 from which it appears that Ms Bryant was "engaged and employed at all times outside the United Kingdom". Thus we take it that the use of the word "engaged to work" by Lord Hoffmann in paragraph 39 of his speech correctly identifies that Ms Bryant was recruited locally i.e. in Rome.

ADT v SPEYER

26. Mr Speyer bought proceedings against four Respondents in the Employment Tribunal at London (South); they were (1) Thorn Security Group Ltd "TSG" (2) ADT (UK) Ltd "ADT(UK)", (3) Thorn Security Ltd "TSL" and (4) ADT Fire and Security Plc "ADT F&S". After a three day hearing in April (Chairman Ms M E Stacey) a decision with reasons was handed down on 20 August 2004. The Claimant succeeded against ADT F&S which then appealed and we will call it the Respondent. There is no cross appeal by the Claimant in respect of the other three Respondents. The Respondent was found to have been the employer of the Claimant and to have unfairly dismissed him for having made a protected disclosure and on ordinary unfair dismissal lines. It was also found liable for damages for breach of contract. In total, the Tribunal awarded over £300,000 by way of compensation and damages. The Claimant and Respondent were represented by Solicitors and at the EAT by Miss Adrienne Morgan and Mr Bruce Carr respectively, both of Counsel.

The facts

27. With the help of Mr Carr we can recite the salient facts from the Judgment. Mr Speyer began work for TSL in May 1990 as an internal audit manager. TSL was made up of two divisions - UK operations and Overseas Division. In June 1995, Mr Speyer was offered a position in Kuala Lumpur. The offer letter was written on TSG notepaper. The terms of a supplemental contract included a right on termination of the assignment to return to the UK at which point he would "revert to [his] basic UK terms and conditions of employment." In October 1995, Mr Speyer received a letter from the HR director at TSG referring to the offer "for the position of finance director based in Malaysia." In or about 1996-97, TSL became a subsidiary of Tyco Holdings (UK) Ltd after which time Mr Speyer started to report to United States managers from Tyco who were based in Asia. Tyco Holdings (UK) Ltd itself is a subsidiary of Tyco International Limited. In the autumn of 1997, Mr Speyer relocated to Singapore in the role of regional controller although he continued to be paid by TSL and the name TSL appeared on Mr Speyer's P60s. In April 1998, he became business development manager for Asia. In February 2000, he was promoted again to regional manager for South East Asia until March 2002 when he became president for Fire & Services, Asia. In January 1998, the Respondent acquired the domestic fire and security business of TSL. The Respondent did not operate in Asia after the latter part of 1997 and has not operated anywhere internationally since 1998. Whilst following this acquisition Mr Speyer's pay was administered by the Respondent, it was then recharged to various other Tyco companies. From 1995 onwards, Mr Speyer did not have a UK work base but did have such bases in Malaysia and Singapore. In January 2003, Mr Speyer signed a document (which he did not read) giving the location of his company as Malaysia and Singapore during the period from September 1995 to January 2003. On 20 March 2003, Mr Speyer was sent a letter of dismissal from Tyco Fire & Security Services Asia. Mr Speyer's pay was determined by "his bosses in Asia who were employed by either Tyco Asia or Tyco United States incorporated companies" (paragraph 5.30).
28. With those findings in mind the Tribunal went on to decide the two principal issues in this case. First, it held that the Claimant was employed by the Respondent following the transfer of an undertaking pursuant to the TUPE Regulations 1981. Secondly, this was employment in Great Britain and so it had jurisdiction to hear his claims. The Respondent contends that both of those judgments are incorrect.

The TUPE point

29. The Employment Tribunal did not set out the regulations in force at the relevant time which were the TUPE Regulations 1981. So far as is relevant they provide as follow:-

"3. A relevant transfer

(1) Subject to the provisions of these Regulations, these Regulations apply to a transfer form one person to another of an undertaking situated immediately before the transfer in the United Kingdom or a part of one which is so situated.

5. Effect of relevant transfer on contracts of employment, etc

(1) … a relevant transfer shall not operate so as to terminate the contract of employment of any person employed by the transferor in the undertaking or part transferred buy any such contract which would otherwise have been terminated by the transfer shall have effect after the transfer as if originally made between the person so employed and the transferee.

(3) Any reference in paragraph (1) or (2) above to a person employed in an undertaking or part of one transferred by a relevant transfer is a reference to a person so employed immediately before the transfer, including, where the transfer is effected by a series of two or more transactions, a person so employed immediately before any of those transactions."

When a Tribunal is required to make findings under these regulations it seems to us that it should first identify the undertaking or the part of the undertaking, determine whether it has transferred from the transferor to the transferee and then decide whether any employee was employed at the relevant time in the undertaking or the part transferred. The Tribunal acknowledged that its task was "not easy" and it said this:-

"20. We first considered the issue of employer identity (as this may have some relevance to the issue of territorial jurisdiction). This was not easy. Mr Speyer's terms of conditions of employment issued to him on commencing work stated "you will work for Thorn Security Ltd, a company within Thorn within Thorn EMI Technology Ltd who is your legal employer." A good question: who indeed is his legal employer'? We have made extensive findings of fact for the purpose of elucidating that question so that we could take into account all the circumstances surrounding the applicant's employment. Having done so we conclude that the applicant was employed by the fourth respondent, ADT Fire and Security Plc, his employment having been transferred from the third respondent to the fourth respondent. We base our conclusion on a number of factors. We firstly conclude that the applicant was an employee of Thorn Security Ltd at the commencement of his employment (not Thorn EMI Technology Ltd) as is reasonably clear from the correspondence when the applicant started work. His "basic UK contract of employment" (as referred to in the overseas assignment agreement) is therefore with Thorn Security Ltd. The applicant is entitled to rely on the information on his pay slips and his annual P60 forms. We further find that he remained an employee of Thorn Security Ltd when he accepted the overseas assignment agreement (notwithstanding the references to Thorn Security Group Ltd). It was clear that decisions affecting the particular subsidiary within the group for whom the applicant worked were not necessarily taken at the level of the subsidiary company. However, the assignment agreement makes clear that: "it is supplemental to your basic UK contract of employment". We further find that the assignment agreement is compliant with Section 1(4)(k) ERA which envisages the situation where an employee is required to work outside of the United Kingdom for a period of more than one month and is entitled to certain basic information governing the overseas work. We further find that when the applicant moved from Kuala Lumpar to Singapore it constituted an extension of the assignment agreement in accordance with section 1 of that agreement. We did not accept that the applicant's employment transferred to a local Singaporean company on his move in 1997. We accept that the applicant is entitled to rely on his written terms and conditions, which were not subsequently varied and to rely on his P60 forms and pay slips to identify his employer.

21. We find there was a transfer from the third to the fourth respondent in the late 1990's/early new millennium to ADT Fire and Security Ltd and the applicant's pay slips P60's reflected the transfer. The applicant understood and it was general knowledge that employees from the third respondent transferred to the fourth respondent and Miss Nugent is an example. The applicant remained throughout a member of the UK pension scheme which was only open to employees of the third respondent, benefited from the Mortgage Assistance Payments which were made only to the UK company's employees and remained in membership of the UK savings related share option plan.

22. The applicant understood himself to be an employee of the fourth respondent and he was treated as such by them."

30. To these findings can be added further findings produced by the Chairman for us following a direction from the EAT. The Tribunal was asked to say what the precise nature of the transfer was of any of the domestic and international divisions of TSL and the Chairman recorded that the Respondent had acquired the domestic division of TSL. It is common ground that this transfer did not happen in "the late 1990's/early new millennium" but in January 1998. The evidence came directly from an admission by the Claimant by reference to the Respondent's annual report. The Respondent did not operate overseas. We have been referred to an agreed record of the Claimant's employment history, which was available at the Employment Tribunal, indicating that in 1993 he was appointed to the international division of TSL. In 1995 he was appointed abroad to Thorn Security Malaysia, responsible for South East Asia, Hong Kong, Singapore and Malaysia. By January 1998 he was working for Tyco International Asia Singapore and continued to work until his dismissal when he was Vice President of Tyco Fire and Security Singapore with the nature of his duties described as Asia Region Operations Management. We are grateful to the Chairman for providing her notes on this point.
31. The Tribunal made findings of fact about the circumstances to the best of its ability although it recognised, as did the Claimant before us, that there was a paucity of material. The assessment of whether or not there was a relevant transfer following collation of these factors is one of law. Applying Lord Hoffmann's question "fact or law?" in paragraph 34 of his judgment, the Tribunal was engaged upon an evaluation of those facts to decide a question posed by the interpretation of the Regulations. That means it is susceptible to appeal as a question of law. With respect to the Employment Tribunal, our evaluation fails to show how the Claimant was assigned to the domestic operation part of the business of TSL at the time of the transfer to the Respondent. He was at all times from 1993 employed on international work and for most of the time engaged abroad. It follows that no aspect of his work formed part of the undertaking transferred with the domestic business in January 1998.
32. The Claimant submits that there are many indicia pointing towards his employment in the transferred part. However, that submission must founder on the rocks that the Tribunal apparently held that the sole reason for the Claimant's employment by the Respondent was the transfer of his employment contract under the 1998 transfer. No alternative submission is made. It was open to the Claimant to contend that the Tribunal's judgment was correct on the basis that he had transferred in 1998 by offer and acceptance and not by operation of law through the TUPE regulations. That, however, was not an argument used until the appeal.
33. The Claimant brought proceedings against four Respondents and succeeded against only one. The Respondent contended on appeal that it was the wrong employer and no alternative basis was advanced for attaching liability to any of the others. The finding we reach is that the Claimant was not employed in the part transferred at the date of the relevant transfer and could not have had his contract transferred to it by operation of TUPE.
34. Since we have detected an error in the Tribunal's reasoning relating to transfer, it is open to us to decide whether or not in the light of that error the Tribunal's judgment was nonetheless unarguably correct. On the other hand, it is possible that the Employment Tribunal was using "transfer" in a non-TUPE sense and it meant it when it said the Claimant did transfer to the Respondent in the late 1990s early 2000s. We can see that the argument at the Employment Tribunal was presented on the basis of there being historically a relevant transfer. In the Claimant's response to the Respondent's re-amended Notice of Appeal, it was contended that even if the Tribunal were wrong about the TUPE transfer, there was clear evidence that the Claimant was regarded as an employee of the Respondent. We agree that applying Lord Hoffmann's and Lord Denning's dynamic view of the relationship, looking at matters as they operated over time rather than at the inception of the relationship, the Respondent undoubtedly had an employment relationship with the Claimant and was treated by it as its employee. This is demonstrated by the assignment agreement and the fact that the Respondent was content for the UK company to issue pay slips, P60s, instructions, membership of the UK pension scheme, mortgage assistance plan and savings related share option plan notwithstanding that the company which dismissed him in writing on 20 March 2003 was Tyco Fire and Security Services Asia. All we can say is that he became an employee of the Respondent not by reason of the January 1998 transfer, but at the same time or some time thereafter, by reason of the agreement or acquiescence by their conduct of the parties. In the absence of any issue about a TUPE transfer we would hold with the Tribunal that there were many materials upon which a judgment could be based that the Claimant was employed by the Respondent. The Employment Tribunal erred in the application of TUPE, but its judgment that the Claimant was employed by the Respondent at the time of his dismissal is unarguably right.
35. In that case, we will turn to the Serco point.

Employment in Great Britain

36. Mr Carr adopted the arguments of Mr Linden in the British Council appeal based upon the application of Lord Hoffmann's judgment in Serco. Of the five categories identified by Lord Hoffmann (paragraph 23 above) it was contended that this case was confined to the fifth. By the end of Ms Morgan's submissions she had accepted that this was correct, subject to her cross appeal against the Tribunal's finding that the Claimant did not have a UK work base after his assignment to Asia 1995 (see paragraph 5.20).
37. The finding about the "work base" is put in the Claimant's skeleton argument as one which we are "free to overturn". We will assume in the Claimant's favour that this is the kind of evaluation envisaged by Lord Hoffmann (at paragraph 34) which is a question of law, open to appeal. So the correct approach is that adopted from Lord Denning MR's judgment in Todd (Lord Hoffmann at paragraph 29). To use Lord Denning's simple language, and moving away from the strict terms of the contract at the time it was made, you have to judge from the conduct of the parties and the way the contract has been operated where the base of the employee was. He had been doing work abroad for 7½ years and on that simple finding alone it would be extraordinarily difficult to displace the finding by the Tribunal that he did not have a UK base. We uphold it.
38. The consequence is that the only gateway which remains for the Claimant to pass through to the jurisdiction of the Employment Tribunal is Lord Hoffmann's fifth, residual, category. Here he has to a show strong connection to Britain and to British labour law. Again the findings by the Tribunal as to where he worked, the kind of duties he performed as recorded in his work history and the conduct of the parties, do not put him in a category which is similar to the two categories of expatriate employee specifically illustrated by Lord Hoffmann. It is accepted by Ms Morgan that he is not employed as the equivalent of a foreign correspondent nor in an enclave. No guidance is given by Lord Hoffmann nor did any other Law Lord or counsel in the Serco case give an example as to the application of this residual category. Ms Morgan has not persuaded us that the circumstances of this case establish a sufficient connection between her client and Great Britain and our employment law system. For this reason we uphold the second ground of ADT's appeal.
39. It is accepted by the Claimant that the claim in respect of unlawful deductions must meet the same fate as the claim for unfair dismissal based on the employment in Great Britain finding.

Unfair dismissal compensation

40. However, on the footing that we are wrong on the Serco point and the Claimant was entitled to have the unchallenged finding that he was unfairly dismissed, a challenge is made to the award of 57 weeks' pay net up to the date of hearing and a further 6 months thereafter. The principal criticism is that there is no explanation by the Employment Tribunal for its finding. The Tribunal recorded that it assessed the loss under section 123 of the Employment Rights Act which of course is uncapped since it made a finding, unchallenged here, that the Claimant was dismissed for whistleblowing. It is not suggested that the Tribunal's self direction on the law is incorrect (paragraph 50). It must be borne in mind that the Claimant produced a schedule of loss in advance of the hearing and evidence. The Respondent at this stage, through its principal witness and its solicitor, had withdrawn from the remedy part of the hearing. There was thus no formal challenge to the Claimant's figures. Given that the Tribunal has addressed itself correctly on the law, it was open to it to accept as just and equitable the figures put forward by the Claimant. We infer from the phrase "the Claimant spoke to his schedule of loss" that the Tribunal accepted his history and his arithmetic. In recording the figures, it accepted, implicitly, the reasons why he had been unemployed and claimed the losses he did up to the date of the hearing, and the assessment in his witness statement that it would take a further six months to get a job at a similar level of earnings. With the benefit of the Chairman's answers to our questions this point is fully justified and we reject that ground of appeal.

Wrongful dismissal

41. It is correct to say, as the Tribunal does, that different principles apply in relation to the wrongful dismissal claim based as it is upon the Extension of Jurisdiction Order 1994 Art 3. This allows proceedings to be brought in the Employment Tribunal for damages if a court in England and Wales would have jurisdiction. A court plainly would have jurisdiction to hear the Claimant's case against the Respondent. We agree that the purpose of this order was to allow claims for unfair dismissal conveniently to be brought with claims of wrongful dismissal arising out of the termination of employment. Mr Carr contends that the Tribunal's linkage of the two claims taints the finding on wrongful dismissal, once we have determined in favour of ADT on the employment in Great Britain aspect. We cannot see why. The unfair dismissal point was determined against the Claimant solely on the interpretation of section 94(1) of the Employment Rights Act 1996, as Lord Hoffmann said. There is no reason why there should be a cross-over to disqualify a Claimant in an ordinary contract claim against an employer based in this country. The finding in favour of the Claimant on wrongful dismissal can survive the failure of the unfair dismissal claim since there is no equivalent to the section 94(1) implied territorial limitation. The Tribunal awarded £25,000 which is the cap for wrongful dismissal and that stays.

Result

42. The appeal of the Respondent ADT is allowed in substance and the unfair dismissal and unlawful deductions holdings set aside; the appeal against the finding in favour of the Claimant on wrongful dismissal for breach of contract is dismissed.

CAMERON v NAAFI

43. Mr Cameron's appeal against the Navy, Army and Air Force Institutes (NAAFI) challenges the correctness of the Employment Tribunal's judgment, registered on 1 September 2004 (Chairman Mr L W Belcher sitting at Southampton) that it had no jurisdiction to hear the Claimant's unfair dismissal and disability claims as he worked in Germany. It ordered him to pay £5000 towards the Respondent's costs. Following the judgment of the House of Lords in Botham v MoD, NAAFI has conceded the Claimant's right to bring an unfair dismissal claim which is presently stayed pending our judgment on his claim under the Disability Discrimination Act 1995. We will allow his appeal on unfair dismissal, set aside the costs order by consent and lift the stay. It appears from the Response form that if the Tribunal has DDA jurisdiction, no issue is taken that he is disabled by reason of stress and depression, but we are told this is not conceded.
44. Proceedings have been issued on his behalf in Central London County Court against the Respondent alleging fault and claiming damages for stress induced psychiatric illness. Proceedings have also been started on his behalf in the Labour Court in Mönchengladbach, Germany challenging his dismissal and seeking protection against dismissal. Following a hearing, proceedings there are presently stayed pending a judgment as to whether jurisdiction is available to the Claimant in Great Britain. No order has been made following the Respondent's concession as to jurisdiction in Great Britain for unfair dismissal. We do not know whether the stay applies to our Judgment under the DDA
45. The facts are simple. A letter of appointment was issued to the Claimant at an address in Scotland which was signed by him and an officer of the Respondent on 7 May 1973. This has been described as the original contract. He had various jobs leading to his appointment as manager of one of the Respondent's retail stores in Germany. At all times from 1973, he lived and worked in Germany with his wife and family and his children were educated at British schools in Germany. He was dismissed after 30 years' service on 5 December 2003.
46. The Tribunal upheld the Respondent's case on jurisdiction. On appeal, it is criticised for abstaining from making decisions in relation to certain critical matters. Broadly speaking these relate to the status of the Claimant under NATO agreements, the application of EU law, breaches of the Human Rights Act 1998, and of his Convention rights. In the light of that criticism, which is substantially correct, it is not surprising that attempts were made to raise issues on appeal for the first time and were met with the response that only in exceptional cases is this permitted by the EAT. However, at the oral hearing those points gave way to a more flexible stance by Mr Sutton. This included our submission of new material seeking to understand the status of NAAFI to which we refer below. It has to be said that the ECHR and EU dimensions to the problem of territorial jurisdiction in dismissal and discrimination claims were not advanced by any of the illuminati of the Employment Bar who appeared in any of the courts and tribunals in the Serco and Saggar v MOD [2004] ICR 2004 sequence of cases up to the House of Lords, and when SOFA was raised in SSAFA Forces Help v McClymont UKEAT/0164/03 it was not in relation to the EU and ECHR points. So we enter the debate unassisted by authority or tribunal findings.
47. It is not disputed that the NAAFI handbook regulates the Claimant's employment. This contains a number of procedures including some for dealing with dismissal, discipline and discrimination on the grounds of disability the latter most recently updated in September 2003. The Claimant was required "to be aware of and comply with relevant aspects of" the NATO Status of Forces Agreement ("SOFA") and the Supplementary Agreement ("SA").

The status of NAAFI

48. We will take as a working proposition without finally deciding these matters what Mr Stacey its HR Director told us in a witness statement but only insofar as it is consistent with our construction of the documents, recognising that it has not been the subject of cross-examination or of findings. NAAFI receives public funds to assist the conduct of its operation and fulfils "a vital role providing a service wherever the armed forces need…". NAAFI's business is the operation of retail shops, leisure facilities and catering on military bases throughout the world. Its UK office is in Wiltshire. Its head office is in Germany. It is a private company limited by guarantee as a not for profit corporation, it is not part of the Ministry of Defence. It has a welfare objective which is to benefit the armed services. Any trading profit is reinvested or donated to the armed services welfare funds. Relations between NAAFI and the MOD are regulated by a charter last amended in 1996 which describes NAAFI as a Non Departmental Public Body (NDPB) having "certain obligations and rights under the auspices of the Crown" (see Article 6). Mr Stacey regards NAAFI as a commercial organisation providing services to the MOD. He contends that the charter was drafted by the MOD and is incorrect in describing NAAFI as an NDPB. This statement itself is incorrect since the charter is signed jointly by a Minister and the Chairman of NAAFI, and it is defined as a non-commercial organisation in Article 71 SA, consistent with it being an NDPB. In this unsatisfactory state of the new evidence, we will rely on the documents.
49. The precise status of NAAFI is important for submissions made by the Claimant on the application of EU directives and of the Human Rights Act. For the purposes of EU law, he contends that NAAFI is "an emanation of the state" in respect of which directives are directly applicable. As for the claim under the Human Rights Act, he contends it is a public authority which is prohibited from acting in any way incompatible with a Convention right. On both these points, we are bereft of findings by the Employment Tribunal and so a simple shortcut would be to remit them to it. That however might prove to be a long march. We propose first to give our impression from the documentary material available to us, and our impression is that NAAFI is neither an emanation of the state nor a public authority. If we are wrong about that we will operate on the basis that for the purposes of this appeal it is both.

The NATO Agreement

50. On 4 April 1949 the parties to the North Atlantic Treaty signed an agreement "regarding the status of forces". This was to recognise that the armed services of one party to the agreement would be sent by arrangement to serve in the territory of another. The purpose of the agreement was to define the status of such forces. It is relevant in our case because the Claimant contends that he is within scope of SOFA, not susceptible to German labour law, and so a victim of Convention abuse; and the Respondent contends there is nothing to prevent his claim being determined in the German Labour Court.
51. A major difficulty facing us in dealing with the submissions on SOFA is that we have not been shown domestic legislation, either in the UK or in Germany, which gives effect to this treaty, and agreements made by the parties to the treaty. The states who came together to form NATO are aptly described in SOFA as the contracting parties. They are parties to a contract made between independent states as to how armed forces and civilians deployed by them in Germany would be treated in Germany. In due course, Germany became a party to the agreements. We simply do not know whether or how the obligation undertaken by Germany by reason of these agreements is given effect in the German Labour Court. It must be for the German Labour Court and not for an English employment tribunal to decide whether or not the German court has jurisdiction to decide this dispute between a person working for years in Germany, and his employer with a head office in Germany. As for the UK, statute has made clear how our legal system should deal with obligations imposed by the EU treaty and the Convention, but nothing about SOFA has been produced to us. What we say in the following paragraphs about the agreements must therefore be taken with this very strong reservation in mind. We will approach the matter simply as one of construction of an agreement between parties and in so doing we hope this will shed light on the decisions we make relating to the approach in our own legal system.
52. SOFA provides in relevant part as follows:-

"Article I

(1) In this agreement the expression-

(a) "force" means the personnel belonging to the… air armed services of one Contracting Party when in the territory of another …

(b) "civilian component" means the civilian personnel accompanying a force of a Contracting Party who are in the employ of an armed service…

Article VIII

(1) Each Contracting Party waives all its claims against any other Contracting Party for damage to any property owned by it and used by its … armed services, if such damage-

(i) was caused by a member or an employee of the armed services of the other Contracting Party in the execution of his duties…

(5) Claims…arising out of acts…of members of a force or civilian component done in the performance of official duty…and causing damage in the territory of the receiving state to third parties…shall be dealt with by the receiving state [in accordance with a detailed procedure]

(6) Claims against members of a force or civilian component arising out of tortious acts or omissions in the receiving state not done in the performance of official duty shall be dealt with [in accordance with a procedure]

(7) Claims arising out of unauthorised use of any vehicle of the armed services of a sending State shall be dealt with in accordance with paragraph 6 of the Article."

Article IX

4. Loca1 civilian labour requirements of a force or civilian component shall be satisfied in the same way as the comparable requirements of the receiving State and with the assistance of the authorities of the receiving State through the employment exchanges. The conditions of employment and work, on particular wages, supplementary payments and conditions for the protection of workers, shall be those laid down by the legislation of the receiving State. Such civilian workers employed by a force or civilian component shall not be regarded for any purpose as being members of the: force or civilian component.."

53. An agreement supplementing SOFA applies from a date of which we are uncertain. It is the Supplementary Agreement ("SA") and provides in relevant part as follows:-

"Article 41

6. The provisions of paragraph 5 of Article VIII of the NATO Status of Forces Agreement and of this Article shall not apply to damage suffered by members of a force or of a civilian component and caused by acts or omissions of other members of the same force or the same civilian component, or by other occurrences for which such force or such civilian component is legally responsible.

7. The organisations referred to in paragraph 2 of Article 71 shall for the purpose of the settlement of damage claims in accordance with Article VIII of the NATO Status of Forces Agreement in conjunction with this Article be considered to be, and treated as, integral parts of the force concerned unless it is agreed that any such organisation shall not enjoy in that respect exemption from German jurisdiction."

54. Article 56 deals with labour law and provides as follows:-

"Article 56

1. (a) German labour law, including industrial: safety law (Arbeitsschutzrecht), as applicable to civilian employees working with the German Armed Forces, with the exception of decrees regulating working conditions (Dienstordnungen), shop agreements (Dienstvereinbarungen) and tariff regulations, shall apply to employment of civilian labour with a force or a civilian component except as otherwise provided in this Article and the Section of the Protocol of Signature referring to this Article.

(f) Employment of civilian labour with a force or a civilian component shall not be deemed employment with the German public service.

2. (a) The second sentence of paragraph 1 of Section 9 .of the Dismissal Protection Law (Kundigungsschutzgesetz) shall apply provided that the employer's application may also be based on the ground that the continuation of employment is 'precluded by military interests 'particularly worthy of special protection. The highest service authority may establish credibility (Glaubhaftmachung) for military interests which are particularly. worthy of protection; in this case the proceedings before the court shall be held in camera. Where 'the disclosure of reasons might cause a danger of serious detriment to the security of the sending State or of its force, the highest service authority of the force, in concert with the Chief of the Federal Chancellery (Chef des Bundeskanzleramts), may establish credibility by means of a format declaration.

3. The provisions of German law concerning social insurance, including accident insurance, unemployment insurance and children's allowance shall apply to labour working with a force or a civilian component. The federal Republic shall be the accident insurance carrier.

6. The authorities of a force or of a civilian component shall, in respect of the employment of labour, including members of civilian service organisations, have the right of engagement, placement, training, transfer, dismissal and acceptance of resignations.

8. Disputes arising out of employment…shall be subject to German jurisdiction. Lawsuits against the employer shall be filed against the Federal Republic."

55. Article 71 and the Protocol Re Article 71 referring to it requires that organisations such as NAAFI:-

1. "…shall be considered to be, and treated as, integral parts of the force".

2.(a) The non-German non-commercial organisations listed in paragraph 3 of this Section in the Protocol of Signature referring to this Article [ie NAAFI] shall enjoy the benefits and exemptions accorded to the force by the NATO Status of Forces Agreement and the present Agreement to the extent necessary for the fulfilment of the purposes described in paragraph 3 of that Section.

(b) The organisations referred to in sub-paragraph (a) of this paragraph shall not have the powers enjoyed by the authorities of a force or of a civilian component under the NATO Status of Forces Agreement And the present Agreement."

3. In respect of their activities as non-commercial organisations, the organisations listed in paragraphs 2 and 3 of the Section of the Protocol of Signature referring to this Article shall be exempt from the German regulations, if otherwise applicable, governing the conduct of trade and business activities (Handel and Gewerbe). The provisions of industrial safety law (Arbeitsschutzrecht) shall nevertheless apply subject to the Section of the Protocol of Signature referring to this Article.

56. On behalf of the Claimant, Mr Bowers QC submits that he is "a civilian component". Because of Articles I(b) and VIII(5) SOFA, read with Articles 41(6) and 41(7) SA, he is not subject to German jurisdiction. Article VIII(5) SOFA provides a detailed procedure for dealing with claims arising from acts of a (member of a) civilian component in the performance of official duty. But Article 41(6) SA disapplies the above in respect of damage suffered by members of a civilian component caused by acts of the same civilian component. Since the Protocol "Re Article 71" treats NAAFI as an integral part of the force, a member of it is exempt from German jurisdiction.
57. He also relies on the Guide to the Status of Forces Agreements. This guide explains the background to SOFA pointing out that when it was first signed, Germany was not a member of NATO. The SA was signed when Germany became a Contracting Party together with other countries. The receiving country is always Germany in this agreement. The Guide is to provide commanding officers with a summary of SOFA in so far as it "affects the legal status and defines the rights of the forces". Para 72 of the Guide on Legal Aspects provides as follows:-

"72. Civil jurisdiction over Servicemen, civilian officials and dependants is exclusively German, although intervention by the forces, as prescribed in Service orders, may be necessary where the act or omission arose out of the performance of official duties."

58. Under Part VI - Labour there is specific reference to labour relations and German Labour Law including passages which describe deviations from the jurisdiction of German Labour Law.
59. Surprisingly, neither counsel relied on the disciplinary procedure of NAAFI. This provides for staff in Germany to have arbitration available to them "in view of the potential inability of staff in Germany to pursue applications in the industrial Tribunal". It also provides that "NAAFI staff employed in Germany are subject to both military law and German civilian law…". We must assume it is not of assistance.
60. Mr Sutton contends that the Claimant is part of "the civilian labour with a force" pursuant to Article 56(1)(a) SA. He submits that the Claimant cannot be part of the civilian component since he is not "in the employ of an armed service". The provisions of Article VIII are directed to a circumstance where damage has been caused by a member of a civil component to a "third party other than any of the Contracting Parties". Thus by this agreement a member of a civilian component cannot be a third party. The Claimant is not entitled to invoke the bespoke damages claim in Article VIII.
61. In our judgment, the Claimant is plainly not a member of the force since he is not a member of any of the armed services. Although the terms are not defined, there is no difference between an "integral part" and a "component". Since NAAFI is deemed to be an integral part of the force, and since it is not an armed service, it can only be a civilian component of the force, or an integral part, for it is the same thing. Applying the imagery of engineering, the force is made up of a number of components some of which are armed services and others are civilian services. The civilian component of the force consists of personnel, so a single individual cannot be a component. While it may be correct to say that NAAFI is "in the employ of" the force in a loose sense the Claimant is not since he is in the employ of the civilian component. The difficulties in construing these agreements arise from the use of different language to describe the human stock. They are variously "the civilian personnel" (Article I SOFA) "a member or an employee of the armed services" (Article VIII), "members of a force or civilian component" (Article VIII(5)) "a force a civilian component or their members", (Article 41 SA), "employment of civilian labour with a force or a civilian component" (Article 56(1)(a) SA), "employment with an authority of…a civilian component" (ibid)), "the civilian employees" (ibid), "German civilian labour working with a force or civilian component" (Article 56(4) SA), "the employment of labour, including members of civilian service organisations" (Article 56(6)SA).
62. The purpose of SOFA is to define the status of the personnel of the armed forces of the contracting states when in Germany. There is a clear distinction between those who are in the armed service and those who serve them, whether as their own civilian employees or as civilian employees of an organisation such as NAAFI, or as German civilian employees of either. SOFA regulates the conduct of disputes which arise when the personnel of one state cause harm to the property or personnel of another state or of third parties. There are strong policy reasons pointing to the resolution by British authorities of a dispute between a British soldier and his or her commanding officer, anywhere. The same policy does not apply to the resolution of a dispute between the manager of a retail outlet in Germany and the British company employing him, so as to preclude resolution of the dispute in Germany where the dispute arose. Yet the SA does grant exemption to such companies to a limited extent from German commercial legislation.
63. In order for Mr Bowers QC to succeed in his appeal, he said he has to show that both Articles I and VIII SOFA, read with Article 41 SA, preclude the Claimant's access to the German court. In our judgment he fails to do so but succeeds for another reason. His first written submission also invokes Article 71 and the Protocol Re Article 71, arguing that they should be read with the above. By that route, he arrives at the correct answer. The Claimant was not a civilian component but was employed by it. He plainly does not count as "German civilian labour". He is however aptly described as "civilian labour with…a civil component". As such, pursuant to Article 56 SA, German Labour Law applies to him to the same extent as it applies to civilian employees working with the German armed forces. German Labour Law including industrial safety law applies to NAAFI employees as it applies to civilians working with the German armed forces (Art 56(1)(a) SA), which we would equiparate to a civilian component of the German armed forces as well. The only reason for not applying German Labour Law to him would be if NAAFI were excluded from the scope of German Labour Law by Article 71 SA and the Protocol Re Article 71. NAAFI is exempt by Article 71(3) from "the German regulations governing the conduct of trade and business activities". Equally, German industrial safety law does apply.
64. The sole claim presented to the German Labour Court relates to the Claimant's dismissal on 5 December 2003. The Dismissal Protection Law Kündigungsschutzgesetz applies to this claim. Apparently no claim is made under the Industrial Safety Law Arbeitsschutzrecht. The phrase "the German regulations" in Article 71 SOFA plainly involves matters wider than industrial safety. As well as dismissal, it presumably includes protection against disability discrimination since Mr Bowers tells us such protection is enacted. These laws would seem to us to be "regulations, if otherwise applicable governing the conduct of trade and business activities". The fact that one aspect of worker protection, industrial safety, is expressly cited as applicable to employment by NAAFI means the others are not. The detailed provisions of Article 56 SA are there to regulate civilian employees of the armed services or of a civilian component and thus are "otherwise applicable" to a non-commercial organisation. But by Article 71(3) NAAFI is entitled "to enjoy the benefits and the exemptions" accorded to the armed services so as to exclude the application to it of German Labour Law with the exception of the subcategory within German Labour Law known as Industrial Safety Law.
65. We should also deal with the second part of Mr Bowers' submission which is that Article VIII SOFA applies to the kind of dispute between the Claimant and his employer. A simple reading of this Article, together with the preamble to SOFA, indicates that it is about the resolution of disputes over damage done by one state to another or to a civilian of one of the states. In context, the reference to "damage" applies to damage "to any property owned". References to damage to property and maritime salvage make clear that this is physical damage. There is only one reference to "injury or death suffered by any member of its armed services". The reference to third parties is plainly a reference to, for example, ordinary citizens in Germany who suffer damage to their property as a result of acts by a member of one of the states' personnel. The detailed procedure for the adjudication of such claims, which must be addressed to the German state outside the ordinary jurisdiction of the German courts, shows that SOFA regulates the relations between states. In so far as those claims for damage to property arise as between personnel of the same force or civilian component, Article 41(6) SA means that they cannot be brought under the attenuated civil procedure of SOFA. The intention of the parties to this agreement was to keep such disputes out of the German court. As we have said, these disputes relate to damage to property, and to injury or death, and so we hold that the combined effect of Articles I and VIII SOFA and Article 41 SA is that they do not preclude the presentation of claims for dismissal or disability discrimination under German law by an employee of NAAFI working in Germany. What does preclude such claims is, as we have indicated above, Article 71(3) SA. It follows that Mr Sutton is right in his primary argument that the Claimant would have access to the German court. But he too fails on Article 71(3). Purely as a matter of construction of this agreement, we would hold that it precludes access to the German court and would do so if the German Labour Court is bound to give effect to it.
66. In his Reply, Mr Bowers QC admits that there is access to disability discrimination legislation in Germany if jurisdiction is not declined by reason of the application of SOFA and SA. As a matter of record, neither NAAFI, the Claimant nor the court has taken the jurisdiction point. If we are correct in our construction, jurisdiction would be declined in Germany if the German Labour Court were required by German law to apply SOFA, unless an EU or ECHR route were found. It follows from this analysis that the Tribunal fell into error in not examining the implications of SOFA and SA. If it had, it would have come to the correct conclusion and it would then have had to consider whether the Claimant had an enforceable right in the Southampton Tribunal, given he had no rights in the German court.

The EU claims

67. The Claimant brought his British proceedings on 25 March 2004. It is common ground that the combined effect of sections 4(6) and 68(2) of the Disability Discrimination Act 1995, as applicable at that date, exclude the Claimant's right to bring his claim in Southampton (the Employment Tribunal for the Respondent's UK address). There is a dispute between the parties as to whether he would be entitled to bring his claim had it been brought on 1 October 2004 under the amendments introduced by regulations in 2003. It is not necessary for us to reach a determination on this issue since all the events and the presentation of the claim occurred under the ancien regime. Instead, two routes to European justice are followed: directly to the EU measures and via them to the ECHR.

The framework directive

68. The question which arises is whether or not the EU measures in this appeal are directly enforceable against NAAFI. The first is the framework directive which makes discrimination unlawful on the grounds of, so far as is relevant to our discussion, disability. The UK was well in advance of this measure by passing the DDA in 1995, and it sought to apply the directive itself by the implementation of changes to the DDA through regulations in 2003 taking effect on 1 October 2004. The latest date for transposition of the directive into national law was 2 December 2006. The Claimant's argument based upon the directive is that he does not have an effective remedy under domestic law by reason of the old Act's territorial exclusion. So that exclusion should be disapplied in order to give direct effect to the framework directive. This of course cannot be done unless NAAFI is an emanation of the state.
69. This point was not raised in the Employment Tribunal. Mr Sutton in his second skeleton argument contends that the EAT should not entertain the point. The EAT will not hear new points on appeal unless exceptional circumstances apply: Glennie v Independent Magazine (UK) Limited [1999] IRLR 719 (CA). He took a softer approach at the oral hearing indicating perhaps that there was no prejudice to the Respondent by this argument. Nevertheless, this is a matter for our discretion and none of the conventional heads for allowing a new point arises in this case. The Claimant was represented by experienced junior counsel who submitted extensive written and oral argument. More time is taken up in the EAT on it. The Respondent has been denied the opportunity to have a reasoned judgment of the Employment Tribunal on the point. There has been no explanation why the point was not taken below. This is not a pure point of law and additional evidence is required. Balancing those considerations, we would not ourselves allow the point to be raised. But in deference to the arguments which have been put before us and Mr Sutton's admirable flexibility in meeting the point, we will allow it to be raised. His short legal point, after all, is that there is no directly enforceable EU right prior to the date for transposition.
70. We are concerned in this appeal with directive 2000/78/EC, the framework directive on discrimination; Article 39 of the EU Treaty of Amsterdam dealing with free movement of workers and Regulation 1612/68 made under it; and Article 307 on pre-accession Treaties. The following principles are accepted as common ground.

(1) EU law recognises the right to an effective remedy from some court or Tribunal in respect of rights under EU law; Johnston v Chief Constable of the RUC [1986] ECR 1651 at 1681.

(2) Rights under the treaty and under the regulation are directly enforceable between private legal personalities.

(3) A directive is directly effective to enforce a right as between an individual and an emanation of the state if it is sufficiently clear, precise and unconditional. If it identifies the beneficiary of the right, the person under a duty to give effect to it and the nature and extent or content of the right, it meets these criteria; Francovich v Italy [1992] IRLR 84. In Adeneler v Ellinikos Organismos Galaktos [2006] IRLR 716, the ECJ said this:-

"112. In addition, if the result prescribed by a Directive cannot be achieved by way of interpretation, it should also be borne in mind that, in accordance with the judgment in joined cases C-6/90 and C-9/90 Francovich and others [1992] IRLR 84, at paragraph 39, Community law requires the Member States to make good damage caused to individuals through failure to transpose that Directive, provided that three conditions are fulfilled. First, the purpose of the Directive in question must be to grant rights to individuals. Second, it must be possible to identify the content of those rights on the basis of the provisions of the Directive. Finally, there must be a causal link between the breach of the Member State's obligation and the damage suffered (see, to this effect, case C-91/92 Faccini Dori [1994] ECR 1-3325, paragraph 27).

(4) National courts should seek to apply Convention rights when construing EU law; Johnston v RUC (above) at para 18.

(5) A regulation is independent of any measure or reception into national law, Amsterdam Bulb BV [1977] ECR 137 at para 4.

(6) An emanation of the state is defined in Foster v British Gas Plc [1990] IRLR 353 ECJ at para 20 in the following terms:-

"… a body, whatever its legal form, which has been made responsible, pursuant to a measure adopted by the state, for providing a public service under the control of the state and has for that purpose special powers beyond those which result from the normal rules applicable in relations between individuals is included in any event among the bodies against which the provisions of a Directive capable of having direct effect may be relied upon."

It follows that the body must have been made responsible for providing a public service pursuant to a measure adopted by the state, the public service must be under the control of the state and the body must have special powers.

71. Applying those principles to the application of the framework directive in this case it is our impression that NAAFI is not an emanation of the state. The service which it provides is not to the public but to members of the armed forces, their families and employees on military bases. The Respondent was involved in retail sales through stores operated by NAAFI and the provision of bars and clubs to the armed services and their families. These do not appear to be of a public nature.
72. In the documents available no specific measures have been identified which have been adopted by the state but it is arguable that SOFA and SA, by specifically identifying NAAFI as a non-commercial organisation exempt as we have held it from German jurisdiction, was promoted pursuant to a state measure.
73. NAAFI is a company limited by guarantee. Since NAAFI is run by a board of directors their duties are owed to the company and not to the state. Whatever the nature of the appointment of these directors, their position in company law is the same as any other director and is controlled by the Memorandum and Articles. The state does not have legal control over the acts of these directors and their responsibilities to the company. Its Charter refers to "certain rights and obligations under the auspices" of the Crown. We have seen no special powers which it may exercise. It is controlled by its board and not by the state. It follows from this very limited review on unsatisfactory evidence that we would not ourselves have held that NAAFI is an emanation of the state. We recognise however that this is properly the function of an Employment Tribunal and so the matter would usually be remitted. Yet we might give a useful conclusion based upon an assumption, against our impression, that NAAFI is indeed an emanation of the state meeting the conditions set out above.
74. So we proceed at this stage on the footing that it is. In any event, the Claimant is correct in submitting that the EAT should give effect to EU law under its interpretive obligation. At first sight, Mr Sutton's argument on the date of introduction of the directive seems unanswerable. Yet the Claimant relies on what he contends is directly relevant ECJ authority: Mangold v Helm [2006] IRLR 143. He contends that this establishes that the observance of the principle of equal treatment in respect of age (and the same applies to disability) cannot be conditional on the expiry of the period allowed for Member States to transpose a directive. This directive was required to be transposed by 2 December 2003 but this was extended:-

"In order to take account of particular conditions Member States may if necessary have an additional period of three years from 2 December 2003…to implement the provisions of this directive on age and disability discrimination." (Article 18)

The Mangold case concerned the regulation of fixed term contracts under German laws to promote employment. Protection was given in relation to the maximum fixed term and its extensions. But an exemption was introduced on 1 January 2001 disapplying these provisions to those over age 52. Herr Mangold entered into a contract on 1 July 2003. He claimed the German measure was contrary to the framework directive. The ECJ upheld the claim saying this:-

"67. First, the Court has already held that, during the period prescribed for transposition of a Directive, the Member States must refrain from taking any measures liable seriously to compromise the attainment of the result prescribed by that Directive (Inter-Environnement Wallonie, paragraph 45).

71. On the one hand, it is apparent from the very wording of the second subparagraph of Article 18 of Directive 2000/78 that where a Member State, like the Federal Republic of Germany in this case, chooses to have recourse to an additional period of three years from 2 December 2003 in order to transpose the Directive, that Member State shall report annually to the Commission on the steps it is taking to tackle age…discrimination and on the progress it is making towards implementation.

72. That provision implies, therefore, that the Member State, which thus exceptionally enjoys an extended period for transposition, is progressively to take concrete measures for the purpose of there and then approximating its legislation to the result prescribed by that Directive. Now, that obligation would be rendered redundant if the Member State were to be permitted, during the period allowed for implementation of the Directive, to adopt measures incompatible with the objectives pursued by that act.

74. In the second place and above all, Directive 2000/78 does not itself lay down the principle of equal treatment in the field of employment and occupation. Indeed, in accordance with Article 1 thereof, the sole purpose of the Directive is 'to lay down a general framework for combating discrimination on the grounds of religion or belief, disability, age or sexual orientation', the source of the actual principle underlying the prohibition of those forms of discrimination being found, as is clear from the third and fourth recitals in the preamble to the Directive, in various international instruments and in the constitutional traditions common to the Member States.

75. The principle of non-discrimination on grounds of age must thus be regarded as a general principle of Community law. Where national rules fall within the scope of Community law, which is the case with para. 14(3) of the TzBfG, as amended by the Law of 2002, as being a measure implementing Directive 1999/70 (see also, in this respect, paragraphs 51 and 64 above), and reference is made to the Court for a preliminary ruling, the Court must provide all the criteria of interpretation needed by the national court to determine whether those rules are compatible with such a principle (case C-442/00 Rodriguez Caballero [2003] IRLR 115, paragraphs 30—32).

76. Consequently, observance of the general principle of equal treatment, in particular in respect of age, cannot as such be conditional upon the expiry of the period allowed the Member States for the transposition of a Directive intended to lay down a general framework for combating discrimination on the grounds of age, in particular so far as the organisation of appropriate legal remedies, the burden of proof, protection against victimisation, social dialogue, affirmative action and other specific measures to implement such a Directive are concerned.

77. In those circumstances it is the responsibility of the national court, hearing a dispute involving the principle of non-discrimination in respect of age, to provide, in a case within its jurisdiction, the legal protection which individuals derive from the rules of Community law and to ensure that those rules are fully effective, setting aside any provision of national law which may conflict with that law (see, to that effect, case 106/77 Simmenthal [1978] ECR 629, paragraph 21. and case C-347/96 Solred [1998] ECR I-937, paragraph 30.)"

This prompted a good deal of academic discussion including as put before us an Article by Professor Dagmar Schiek [2006] ILJ 329 heralding it as "a first step in what will hopefully lead towards judicial development of a coherent framework for equal treatment.."

75. Mr Sutton however contends that it is not authority for the proposition that a provision of national law which conflicts with the directive ought to be disapplied from the date the directive enters into force when the transposition period has not expired. He submitted that the feverish atmosphere immediately following Mangold had calmed down. The judgment was directed to Germany's amending legislation which was intended to thwart the legal intent of the EU directive. This made it exceptional. The principle that a directive is not directly effective until the transposition date has expired was set as long ago as 1979 in Pubblico Ministero v Tullio Ratti [1979] ECR 1629 when it was held that so long as the period prescribed for a Member State to incorporate a directive into its internal legal order had not yet expired, the directive cannot have direct effect. Such effect arises only at the end of the period prescribed. That principle was reaffirmed in the post-Mangold judgment of Adeneler v Ellinikos Organismos Galaktos [2006] IRLR 716 where the ECJ held:-

"113. With a view, more specifically, to determining the date from which national courts are to apply the principle that national law must be interpreted in conformity with Community law, it should be noted that that obligation, arising from the second paragraph of Article 10 EC, the third paragraph of Article 249 EC and the Directive in question itself, has been imposed in particular where a provision of a Directive lacks direct effect, be it that the relevant provision is not sufficiently clear, precise and unconditional to produce direct effect or that the dispute is exclusively between individuals.

114. Also, before the period for transposition of a Directive has expired, Member States cannot be reproached for not having yet adopted measures implementing it in national law (see case C-l29/96 inter-Environnement Wallonie [1997] ECR 1-7411, paragraph 43).

115. Accordingly, where a Directive is transposed belatedly, the general obligation owed by national courts to interpret domestic law in conformity with the Directive exists only once the period for its transposition has expired.

121. In accordance with the Court's settled case law, it follows from the second paragraph of Article 10 EC in conjunction with the third paragraph- of Article 249 EC and the Directive in question itself that, during the period prescribed for trans-position of a Directive, the Member States to which it is addressed must refrain from taking any measures liable seriously to compromise the attainment of the result prescribed by it (inter-Environnement Wallonie, paragraph 45; case C-14/02 Atral [2003] ECR 1-4431, paragraph 58; and Mangold, paragraph 67). In this connection it is immaterial whether or not the provision of national law at issue which has been adopted after the Directive in question entered into force is concerned with the transposition of the Directive (Atral, paragraph 59 and Mangold, paragraph 68).

123. It follows that, from the date upon which a Directive has entered into force, the courts of the Member States must refrain as far as possible from interpreting domestic law in a manner which might seriously compromise, after the period for transposition has expired, attainment of the objective pursued by that Directive."

76. This in our judgment provides a moderating effect to the judgment in Mangold. As is clear from the above citations, if there is nothing to disapply there is simply the interpretive obligation. The UK delayed for 10 months after the coming into force of the directive its own implementation by way of the 2003 regulations. It has not been suggested that these regulations do not give full effect to the framework directive. They are in character and purpose quite different from the amendments to the German legislation on fixed term contracts condemned in Mangold. No evidence was called to illustrate why the UK government should be in breach by delaying transposition for 10 months within an envelope of three years. In our opinion, the directive did not become directly effective in the UK until 2 December 2006 or arguably 1 October 2004 but in any event after the dates relevant to this appeal. These regulations actually serve the purpose of the directive by narrowing the territorial exclusion and expanding the reach of the Disability Discrimination Act 1995 in many other ways. They do not seek to compromise the directive.
77. By whichever route i.e. disapplication of an inconsistent provision against an emanation of the state, or interpretation of relevant EU legislation, this ground of appeal fails.
78. Not cited to us, and so not part of our decision making, but supportive of it, is the Judgment of HHJ Birtles and members in Brumfitt v MOD [2005] IRLR 4, para 20. We simply observe that it was there held that the UK was not in breach of its EU obligation to give effect to a 2002 directive for which the date for transposition had not then passed.

Article 39 and free movement

79. This aspect of the Claimant's EU argument is based upon Article 39 of the treaty which provides as follows:-

"1. Freedom of movement for workers shall be secured within the Community.

2. Such freedom of movement shall entail the abolition of any discrimination based on nationality between workers of the Member States as regards employment, remuneration and other conditions of work and employment.

3. It shall entail the right, subject to limitations justified on grounds of public policy, public security or public health:

(a) to accept offers of employment actually made;

(b) to move freely within the territory of Member States for this purpose;…

4. The provisions of this Article shall not apply to employment and the public service."

Supplementing this Article is regulation 1612/68 paragraph 7 of which provides:-

"A worker who is a national of another Member State may not, in the territory of another Member State, be treated differently from national workers by reason of his nationality in respect of any conditions of employment and work, in particular as regards remuneration, dismissal, and should he become unemployed, reinstatement or reemployment."

It is contended that since SOFA and SA combine to restrict the rights of the Claimant to make a disability discrimination claims in the same way as workers in Germany there is indirect discrimination on the grounds of his nationality as the vast majority of NAAFI employees in Germany are UK nationals.

80. The first point to note about Article 39 is the exclusion in Article 39(4) of workers "in the public service". Neither counsel considered this until we raised it with them after the hearing and we are grateful to them for their further submissions. Since it would appear to offer a defence, we would not allow it now, if it were Mr Sutton rather than ourselves raising it. As he rightly says, this requires some investigation by the Employment Tribunal of the status of NAAFI. As a matter of first impression, we would be inclined to uphold Mr Bowers QC's argument that this derogation from a treaty right should be narrowly construed and the authorities point in that direction: Commission v Italy [1987] ECR 265, Commission v Belgium case 149/79 and Lawrie Blum case 66/85. In any event, in Sotgiu v Deutsche Bundespost Case 152/73, it was held that any such restriction applies to appointment and not to further restrictions after appointment. For these reasons, we will give no further consideration to any possible defence by the Respondent based on Article 39(4).
81. However, the Claimant faces a real obstacle. As before, this issue was not raised in the written materials before the Employment Tribunal. If the Tribunal had erred in failing to consider the Article 39 point on indirect discrimination when properly before it, we would allow the point to be raised here. It would not after all be a new point. But here there was no argument based on discrimination in the claim or the written submissions. It does require evidence in relation to the elementary ingredients for an unlawful discrimination claim such as calls for comparison and statistics. There would also be an opportunity for the Respondent, as it argues before us, to seek to justify any condition allegedly discriminatory on the ground of nationality. For these reasons therefore we would not allow the point to be taken here.
82. Apart from that, the Claimant's principal difficulty in enforcing directly a claim under Article 39 is conceptual. The cases to which our attention has been directed under Article 39 and the regulation relate to treatment by a host state of nationals of another, or of its own nationals being disqualified by reason of working or living abroad. So, in D'Hoop Case C-224/98 2 July 2002 the ECJ held it was unlawful for Belgium to refuse to pay an allowance to one of its subjects who had received a baccalaureate, recognised by Belgium, in France. Properly understood, the claim by the Claimant here is that the DDA in its old form conflicts with rights under Article 39 guaranteeing freedom of movement irrespective of nationality. The claim has nothing to do with nationality but to do with where the Claimant works and for whom. He cannot bring his claim in the Southampton Tribunal because he did his work in Germany for NAAFI. He is not precluded in Southampton because of his nationality. He cannot base his claim on the framework directive because at the relevant time it was not transposed in the UK and there was then no duty to transpose it. That again is nothing to do with his nationality. He cannot bring his claim in Germany because, on our construction, SOFA and SA would preclude it, if the German Labour Court were obliged to apply it. He is not precluded by SOFA and SA from bringing a claim in Britain, but by the DDA. Logically, the place to challenge as breaches of Article 39 (and 307, see below) his inability to bring a disability claim in Germany is Germany. Even so, his claim would have to be of indirect discrimination for there appears to be no evidence of a requirement of British nationality to work for NAAFI or to be excluded by SOFA. For all these reasons the claim under Article 39 is dismissed.

Article 307 and the NATO treaty

83. Also relevant to this argument is Article 307 which is said to refer to the NATO agreements. Article 307 provides the following:-

"The rights and obligations arising from agreements concluded before 1 January 1958 or, for acceding States, before the date of their accession, between one or more Member States on the one hand, and one or more third countries on the other, shall not be affected by the provisions of this Treaty.

To the extent that such agreements are not compatible with this Treaty, the Member State or States concerned shall take all appropriate steps to eliminate the incompatibilities established. Member States shall, where necessary, assist each other to this end and shall, where appropriate, adopt a common attitude."

We heard little about Article 307. It is a hopeless point. The EU obligation, if that is the right description, which it creates is for Member States to assist each other and to adopt a common attitude. There is no evidence as to what these steps are and whether they have been taken, and as to how an attitude is to be the subject of a court's judgment. Let us suppose that the exclusion of the Claimant from the German Labour Court comes from an incompatibility between SOFA and the Treaty of Amsterdam. It is said that the UK government should have taken all appropriate steps to eliminate these incompatibilities. We have not been told what these steps are, and if any approach has been made by the UK to the other EU Member States in NATO, and what their response is. We do not know what is "necessary" or "appropriate". It is hard to construe SOFA as an agreement between one or more Member States on the one hand, and one or more third countries on the other. SOFA is an agreement whose parties are all NATO members which themselves are made up of present or former EU Member States and non-Members. You cannot draw a line based on EU membership, since all the parties are equal and have equal obligations to each other. The EU countries who are members of NATO on the one hand do not meet the non-EU NATO countries on the other hand in an agreement where one side is opposite the other. As a matter of construction, Art 307 appears not to apply to SOFA and SA. Further, it does not apply to SA which was made after the Treaty of Rome, and after the accession of a number of states to the EU, including the UK in 1973. Since we have held that the exclusion of the Claimant is by reason of Article 71 SA, and this was made after 1958 and 1973, Art 307 would not apply to it. On a purely practical note, the EU states which are members of NATO have made or affirmed the exclusion in the SA long after Art 307 took effect on them and it is difficult to see in conventional terms how a claim for breach can be made against all of them. This ground, too, is dismissed.

The EU route to ECHR rights

84. Convention Rights are an issue both under EU law and under the Human Rights Act. First, under EU law it is contended that Convention rights should be observed. This principle is not disputed. The rights said to be engaged here are Article 6 which provides for a right to a fair and public hearing in the determination of civil rights, Article 13 (not part of the Human Rights Act 1998) which provides that there should be an effective remedy for those whose rights are violated, and Article 14 which prohibits discrimination on the ground of national origin. This is against the background of section 3 of the Human Rights Act which requires primary and subordinate legislation to be read and given effect to in a way which is compatible with Convention rights if possible. Although we use the phrase "engaged" the way in which it is put by Mr Bowers QC is that these are "highly relevant". With respect, they need to be more than that. Convention rights cannot by themselves create a substantive new cause of complaint. We are unable to see how the arguments under this head support any claim for breach of EU obligations under the framework directive, Article 39 and the regulation or Article 307. The directive was not in force at the time. There is no material upon which it could be said that the claimant was precluded from enforcing his disability discrimination claim under the yet to be transposed directive by reason of his nationality or national origin. As a matter of construction, at least, article 307 is not engaged. Put simply, he has no EU civil right for which he could be denied a fair determination (article 6); or for which he has been denied an effective remedy (the not-incorporated article 13); or in the exercise of which he has been discriminated against by reason of his national origin (article 14).

The Human Rights Act

85. Even if NAAFI were a public authority under section 6 of the Human Rights Act, it is not said by the Claimant how it has breached any of his Convention rights. Thus far, his complaints are about the operation of SOFA, the DDA, the framework directive, Articles 39 and Article 307. These are all in substance, albeit not in form, against the UK government for failing to make available to him rights of complaint about disability discrimination against NAAFI in Great Britain and Germany.
86. The relationship between the Convention rights invoked in this case seems to be that the Claimant is discriminated against by reason of his national origin or, arguably, his status as a disabled person, and cannot get an effective remedy, by way of a fair hearing, for his civil right not to be discriminated against on the ground his disability. The article 14 right has to be attached to some substantive right and on this footing the Claimant does not have a right under the DDA. Procedural and substantive exclusion from an otherwise universal right is not necessarily a breach of the Convention. Take for example the DDA which, Mr Bowers asserts, now implements the directive. It excludes many people who might otherwise bring claims: certain contract workers and self-employed people, officeholders, clergy, armed service personnel and those who work outside Great Britain. Also excluded those who do not comply with statutory dispute resolution procedures, who present their claims out of time or do not comply with tribunal orders. Yet none of these exclusions is said to constitute a breach of any Convention right, nor it seems, to be incompatible with any one of them.
87. Nor could we interpret the exclusion of those who work abroad from rights under the DDA to mean that they included in such rights. It is simply not possible to place this construction upon the (old) DDA.
88. For the purposes of the Human Rights Act, we were asked to consider whether NAAFI is a public authority with the duty to apply the Convention. Using the textbook terminology adopted by Lord Woolf CJ, in Poplar Housing and Regeneration Community Association Ltd v Donoughue 2002 QB 48 CA, and again applying the results of our impressionistic approach in the absence of formal findings for this purpose, we would hold that NAAFI is not a standard public authority. We do not know enough about its functions to determine whether it is a functional public authority. But in its relationship with the Claimant and by adopting the criteria set out by Lord Woolf at paragraph 65 of his Judgment, it is plainly exercising private functions in the employment and dismissal of a civilian retail store manager on a military base in Germany. We would not consider that it is a functional public authority.
89. We would not wish to fall into the same surf as Lord Phillips of Worth Maltravers MR, identified so graphically by Lord Hoffmann [2006] ICR 262 para 33, by condemning Mr Cameron to a watery existence, the Flying Dutchman of labour law, not rescued by Lord Hoffmann's lifeboat in Serco. He has put in to a safe haven in Southampton Water for his unfair dismissal claim, based on his dismissal for incapability. He has asserted jurisdiction in London for his personal injury claim. We have heard nothing of his use of rights if any under NAAFI's own procedures. We have seen no German legislation directing the German Labour Court to give effect to SOFA and deny him access there. He cannot bring disability discrimination into his home port because of the territorial exclusion in the DDA. He has no EU right to enforce while the directive is not transposed (2004) or required so to be (2006). NAAFI is not an emanation of the state or exercising public functions in its employment relationship. If he has a claim arising out of this situation it is not against NAAFI. It may seem unsatisfactory that for the purposes of unfair dismissal, the Claimant is by concession rightly regarded as working in a British enclave in Germany, and so he can claim unfair dismissal in Southampton, yet he cannot claim disability discrimination there. That however is the result of the application of the judgment in Serco. It applies directly only to unfair dismissal claims and is based on a construction of section 94 of the Employment Rights Act 1996 which has not been argued to be read across to the Disability Discrimination Act 1995.
90. The House of Lords in Serco was not invited to consider whether the imposition of territorial limitation was itself a breach of Convention rights. On the contrary, it was accepted that some territorial limitation is imported into to unfair dismissal. The sole question we are asked to consider is whether the territorial limitation in the DDA is a breach of Convention rights. For the reasons given above, and because it simply did not appear to be an offence to anyone engaged in Serco, we cannot come to that conclusion.
91. As for SOFA, it emerges now only as background to the above submission. Assume that our construction is correct so as to exclude the Claimant from access to the German Labour Court, and that appropriate legislation requires that court to give effect to SOFA and so to deprive the Claimant of his right of access to it. It is simply not possible to interpret the clear words in the DDA, simply because of the exclusion in SOFA, to allow the Claimant who worked outside Great Britain for 30 years to be regarded as working in Great Britain.
92. Nor would we think it could be declared incompatible with Convention rights if we had the power to do so. This is because we have been shown no "primary or subordinate legislation" pursuant to section 3, which requires a court to take that approach to SOFA. It is an agreement between contracting parties, albeit powerful sovereign states, as to the relationships between them. Legislation in the UK, and we take it in Germany, is required in order to oust the jurisdiction of the domestic court. Such legislation is required to be shown in the UK for the purposes of section 4 of the Human Rights Act. Apart from the DDA, we have been shown none.

Result

93. We did not find it necessary for resolving the issues in this case to make a reference to the European Court of Justice. Nor do we consider that we should give permission to appeal to the Court of Appeal so that it may make a declaration of incompatibility if so minded under the Human Rights Act section 4. It is accepted that the EAT cannot make a declaration, not being a court in the sense prescribed by the Act: Whittaker v P & D Watson [2002] ICR 1244 EAT. Elevation to the Court of Appeal by permission of the EAT is an available remedy. But given our sceptical approach to the arguments in this case, to the absence of a finding that any Convention right is engaged and breached, and to the absence of UK primary or subordinate legislation to construe or to declare incompatible, we will not exercise our discretion to give permission to appeal to the Court of Appeal so that an incompatibility argument may be raised.
94. We would like to thank all counsel for their extensive oral and written submissions. Mr Burke's appeal against the British Council is dismissed on withdrawal by consent. ADT's appeal is allowed and the judgment of the Employment Tribunal in favour of Mr Speyer is set aside, save for the finding and award on wrongful dismissal. Mr Cameron's appeal against NAAFI is dismissed except that by consent the appeal against his unfair dismissal claim is allowed and remitted to any Employment Tribunal and the appeal against the costs order is allowed and the order set aside.