Employment contract provisions as to law and jurisdiction do not override the jurisdictional limits set by employment protection legislation, the Isle of Man Employment Tribunal has reiterated.

Facts

In an unfair dismissal claim brought by a commercial pilot against his Isle of Man based employer, it was accepted that the pilot’s work was carried out wholly or mainly outside the Isle of Man. The contract of employment however between the parties contained a law and jurisdiction clause such that the parties submitted to the law of the Isle of Man and the jurisdiction of the Isle of Man Courts. The claimant submitted that this meant the parties had intended Manx employment law and jurisdiction to apply to the contract enabling the claimant’s claim to be heard by the Isle of Man Employment Tribunal.

The employer argued the Tribunal had no jurisdiction to hear the unfair dismissal case. It relied on paragraph 1 of schedule 4 of the Employment Act 2006 of Tynwald which stipulates that, save for certain exceptions, the protective provisions of that legislation do not apply where the worker is engaged in work wholly or mainly outside the Isle of Man. It was common ground that none of the exceptions to that exclusion applied in the case.

Decision

In deciding the preliminary point, the Tribunal noted that the location of the claimant’s work was agreed as having been carried out wholly or mainly outside the Isle of Man and ruled therefore that the claimant fell within the paragraph 1, schedule 4 exclusion. The Tribunal rejected the claimant’s submission that the agreement in the contract submitting the parties to the law and jurisdiction of the Isle of Man operated to override the statutory jurisdictional limits and enabled the Tribunal to exercise jurisdiction in the unfair dismissal claim. The chairman stated: “The claimant has failed to establish that a contractual agreement between the parties can impose on the Tribunal any powers not given to it under the Act, or indeed to extend the jurisdiction of the Act.”

Comment

This seems a logical decision because the parties agreed by contract to submit to Manx law and jurisdiction and as such they must abide by the restrictions set out in their chosen law, in particular the statutory exclusions as to claiming unfair dismissal. Contractual agreement cannot oust the geographical exclusion any more than it could, for instance, vary the length of service required to make the claim.

Although not specifically cited in the written decision, the British jurisdictional cases of Serco v Lawson [2006] UKHL3 (which has been approved and applied in the Manx Tribunal) and Ravat v Halliburton [2012] UKSC1 deal with territorial scope in relation to similar UK legislation. In Powell v OMV Exploration and Production Limited EAT (23 July 2013) the “sufficiently strong connection test” set out in case law was qualified in that the EAT reminded itself that the starting point in applying that test is that the statute had no application to work outside the United Kingdom. In international commuter type cases where a number of jurisdictions are involved therefore Tribunals will apply the sufficiently strong connection test and relevant to that test will be whether the parties had agreed a specific law to apply to the contract and a country to have jurisdiction. Credit Sights Ltd v Dhunna [2014] EWCA Civ 1238 is a more recent Court of Appeal English decision on the application of the test.

Furthermore, the Employment Act 2006 of Tynwald specifically states at section 164 that any provision in a contract purporting to exclude or limit the operation of any of the Act’s provisions is void albeit in the present case the claimant argued the contractual provision effectively extended the Act’s jurisdiction. It is noteworthy that the Rome Convention governing applicable employment law issues has not fully been adopted in the Isle of Man (per the Contracts (Applicable Law) Act 1992 of Tynwald). The section 164 bar on contracting out of statutory rights however provides the protection against local statutory employment law being ousted by private agreement.

John T Aycock
Advocate
M&P Legal

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