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23 March 2020

228: Exclusive jurisdiction clause relevant factor in assessing sufficiently strong connection

As a general rule, employment disputes should be resolved in the jurisdiction in which they arise. However, case law has established that an employment claim which arises overseas may nevertheless be brought in the UK if the claim has a sufficiently strong connection with the UK and UK employment law. A Tribunal will assess all relevant factors, including contractual documentation, the practical reality of the working arrangements and the expectations of the parties. In Hexagon Sociedad Anonima v Hepburn, the EAT has ruled that a clause in an employee’s contract giving exclusive jurisdiction to the Scottish courts and tribunals was also relevant to that assessment.

Mr Hepburn was a UK citizen who worked on a vessel moored in Equatorial Guinea’s territorial waters. Although Mr Hepburn’s employer was a company registered in Equatorial Guinea, its parent company was headquartered in Scotland. His contract of employment stated that it was governed by the laws of Scotland and provided for the exclusive jurisdiction of the Scottish Courts and Tribunals. After his dismissal, Mr Hepburn returned home to Scotland and brought a whistleblowing claim in the Scottish Employment Tribunal. Hexagon argued that his claim should be brought in Equatorial Guinea.

The Scottish Employment Tribunal held that it had jurisdiction to hear Mr Hepburn’s claim on the basis of the stronger connection test, noting that the exclusive jurisdiction clause was a powerful factor in his favour. The EAT upheld this decision, agreeing with the Tribunal that a term that invokes the jurisdiction of the UK courts creates an expectation that the employer will honour it and that this is relevant to whether there is a sufficiently strong connection between the claim and the UK. Moreover, it noted that it would be disingenuous for an employer to draft and agree such a term, only to seek to disapply it when a claim was brought by the employee.

This case confirms that an exclusive jurisdiction clause can help persuade a Tribunal that the parties to an agreement believe that an employee has a strong connection to the UK. However, it will also be important to show that this expectation is consistent with other relevant connections to the UK. Employers should accordingly think carefully when drafting what could ordinarily be dismissed as a ‘boilerplate’ term of an employment contract.

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