**Mrs Wallis – UKSU – SHAPE International School (British Section)**

16.21

Mrs Wallis is a British citizen. In early 2003 Mrs Wallis' husband (then a serving member of the British Forces) moved to occupy a post within SHAPE. Mrs Wallis moved to accompany her husband at public expense.

16.22

Mrs Wallis commenced employment as a Library Assistant paid as a Teaching Assistant in SHAPE International School (British Section) on 14 Oct 2003. Mrs Wallis was employed by the MOD and recruited through the UKSU. She was employed on an indefinite contract.

16.23

Mrs Wallis's position was advertised in the British Section newsletter, and was open only to UK dependents at SHAPE. Interview for the position were conducted by senior staff from the British Section. The International School had no influence or involvement in her appointment.

16.24

Mrs Wallis was paid monthly in Euros. She did not pay UK or Belgian income tax but did make contributions under the UK Employment Related National Insurance Contributions scheme, administered centrally by UKSU.

16.25

Her position did not involve travel to the United Kingdom. She reported directly to the Deputy Principal and ultimately to the Principal. Mrs Wallis received Belgian public holidays (as do all staff in the British Section). Mrs Wallis's contract contained no mobility clause.

**Mrs Grocott – UKDSU – AFNorth International School**

16.26

Mrs Grocott is a British citizen. In August 2003 Mrs Grocott's husband (then a serving member of the British Forces) moved to occupy a post with the JFC Brunssum. Mrs Grocott moved to accompany her husband at public expense.

16.27

Mrs Grocott commenced employment as School Secretary within the British Section of the AIS within the JFC Brunssum on 16 December 2005. Mrs Grocott was employed by the MOD and recruited through the UKDSU. She was employed on an indefinite contract.

16.28

This position was advertised by the UKDSU within the last quarter to 2005 and was open to UK dependents at JFC Brunssum. Interviews for this position were conducted by the Headteacher and Deputy headteacher of the British Section …

16.29

Mrs Grocott was paid monthly in Euros by the UKDSU. She did not pay UK or Dutch income tax but did make contributions under the UK ERNIC scheme, administered centrally by the UKDSU.

16.30

She reported to her line manager the Principal/headteacher of the British Section. Mrs Grocott's contract contained no mobility clause.

*

Further relevant facts*

16.31

…

16.32

Each claimant applied for her job whilst based in the country where she thereafter worked. However, it is possible within the respondent's scheme to apply before leaving the United Kingdom, although the intending employee must be part of the civilian component in the relevant country at the time of interview. The interviews are all held in the country where the work will be done and offers of employment are made there.

16.33

Each claimant had some contact with the United Kingdom in the course of her work, whether through dealing with British suppliers, speaking to parents in England or whatever. However, that was not a significant component of the job and each might equally deal with other countries. For example, they were eligible to go for training in Herford, Germany.

16.34

The proper law of each contract of employment was expressed to be English law. The terms of the contract of employment gave each claimant rights equal to those to which she would have been entitled in English employment law (or, for example in respect of the period of notice, greater than the statutory minimum). That applied in respect of health and safety, maternity pay, sick pay, maternity leave and return to work, parental rights and protection from harassment under the Harassment Act 1977. In addition, they were told that they were "regarded as" civil servants. They had UK Bank Holidays, as well as the local ones (probably because it would be difficult for the schools to function without the support of national transport etc systems).

16.35

The respondent engages, in both the Netherlands and Belgium, a category of employees called "locally employed civilians" ("LECs"). Within this category there are two subgroups. This information is found at many places in the documents before me, including the instructions to contractors … and articles I and IX (4) of the NATO agreement made in London on 19 June 1951. … The subgroups are:

(i) On one hand, directly employed labour ("DEL"), engaged locally with the assistance of the host state, perhaps through its employment exchanges. These employees are engaged on local (host state) labour terms and are not regarded as members of any relevant force or civilian component. They will usually, but not universally, be local (host-state) nationals.

(ii) On the other hand, locally employed dependents ("DEP"), appointed from those connected with the armed forces or the civilian component of (for our purposes) Britain in either the Netherlands or Belgium. The civilian component means the civilian personnel accompanying a force of a contracting party who are in the employ of an armed service of that contracting party and who are not stateless persons, nor nationals of any state which is not a party to the North Atlantic Treaty, nor nationals of, nor ordinarily resident in, the state in which the force is located. A dependent is the spouse of a member of a force or civilian component, or a child of such member depending on him or her for support. DEPs are employed on contracts governed by English law and subject to certain other favourable conditions.

16.36

Each claimant is within the subgroup at (ii) above. In consequence, their employment is governed by English law, they are exempt from English (and host state) income tax, they pay English National Insurance. DELs on the other hand, are engaged on Belgian or Dutch employment terms, regardless of their nationality, and pay local taxes from their earnings.

16.37

The respondent considers it desirable for the harmony of the family life of those engaged in the forces or the civilian component accompanying the forces that as many additional employment opportunities as possible are available to the dependents of those so engaged. Given the limits on dependency, it is inevitable that most of those seeking and offered employment will actually be the spouse of someone in the forces or the civilian component. The respondent actively seeks to employ such dependents, for the good morale of all those in the forces or the civilian component. It goes to considerable lengths through its literature, both in respect of applications for employment and in connection with contracts of employment, to reassure such DEPs that their terms and conditions are essentially English, as opposed to the terms and conditions of externally engaged DELs.

"UKSU" and "UKDSU" are British military units which provide administrative support for the British contingents at SHAPE and JFC respectively.

1. The Judge's decision on the unfair dismissal point appears at paras. 22-23 of the Reasons. In para. 22 she rejects a submission made by the Claimants that they worked in a "British enclave" of the kind referred to by Lord Hoffmann at para. 39 of his speech in Serco, and thus that their position could be equated with that of Mr Lawson or Mr Botham. As she puts it, "if anything, [they worked in] an international enclave or part of an international enclave". Mrs Grocott in her Respondent's Answer contends that that conclusion was wrong and that the Judge "applied too … restrictive a test to the meaning of the word 'enclave'". I disagree, though for reasons which will appear I need not go into my grounds for doing so. But I would observe that the approach, discernible to some extent in both parties' submissions despite avowals to the contrary, of trying to fit the facts of this case into one or other of what are said to be the "categories" prescribed by Lord Hoffmann, and attempting for that purpose to construe his precise language, wholly disregards the tenor of his speech. Lord Hoffmann went out of his way to emphasise that he was not propounding rules but giving illustrations of the operation of a principle which it was not possible to define with precision.

1. The Judge's reasons for holding that she had jurisdiction to entertain the claims of unfair dismissal appear at para. 23 of the Reasons, which reads as follows:

I have accepted that the claimants became employed by the respondent at the SHAPE School near Mons, Belgium in respect of Mrs Wallis and the JFC Brunssum in the Netherlands, for Mrs Grocott, because they were dependents of the civilian component of Great Britain. They were employed to work in what was a sort of international enclave, on English terms and conditions of employment rather than host state terms, by reason of their close connection to Great Britain. I am satisfied that it is proper to regard them and their employment as so closely connected to England as to be within the cover or reach of the Employment Rights Act for the purposes of acquiring rights in respect of unfair dismissal. They were not posted abroad, so they are not with Lord Hoffmann's first expatriate category. Nor have I been persuaded that either school was a British enclave within Lord Hoffmann's second category. The primary connection with England in each case is that each claimant had a spouse engaged in the British military or civilian component, posted to work for the respondent abroad because of that engagement. It was only because each was dependent on and had accompanied her husband on his posting that she was eligible for the job which she did, either at all or on the terms and conditions which were given. The literature from the respondent which accompanied the terms and conditions and the terms and conditions themselves were in every identifiable respect as if they were working in England. Had each claimant not had a spouse in the British armed forces or in the civilian component, she would not have obtained the jobs at all or not on these terms. There was insufficient evidence for me to ascertain whether the respondent would have employed DELs to do the jobs which the claimants did, but I do not have to decide that because it is clear beyond peradventure that they would not have been engaged on the same terms and conditions. I have accepted that it is not a usual or frequent occurrence that locally engaged foreign nationals do the jobs. That is because, with the intention of maintaining family harmony, the respondent seeks to give priority to employing the dependents of those engaged in the forces or the civilian component. There is plenty of evidence of the close connection between the claimants, the jobs and England in the facts set out above and accepted by the respondent, but that will often be the case. The tipping point and what essentially links the employment to' England in each case is that it was reserved on the terms and conditions which were given to these claimants for dependents of the British military/civilian component posted to serve abroad. Each claimant is in a sense (and to use a phrase deployed elsewhere in employment literature) piggy-backed by her husband or his role and function into Lord Hoffmann's third residual category of expatriate employees. The employment of each and the relationship of each to the respondent (a British employer) has such clear, firm, sound connections with Britain or England that it is appropriate that each claimant should have the protection of English unfair dismissal law, even though she was not appointed in England, or posted abroad and never worked for the respondent in England. I accept the submissions of the claimants in respect of the distinction between the Bryant case and theirs. Mrs Bryant's connection with England was apparently just one of fortuitous nationality in directly employed labour (DEL). These claimants, both DEPs, have far stronger and more direct ties.

1. That reasoning is clear and cogent, and in my view it is unimpeachable. The features identified by the Judge are sufficient to distinguish the case from that of ordinary locally-recruited staff such as the applicant in Bryant v Foreign and Commonwealth Office. Mr Coppel submitted that the Judge's approach was wrong in law because it focused not on some characteristic of the Claimants' actual work which connected it peculiarly with Great Britain but on the "personal" feature that they qualified for employment only because their spouses had been posted to SHAPE or JFC as part of the British military contingent: that was not enough. I do not agree that that was an error. I see nothing in Lord Hoffmann's speech in Serco to suggest, and no reason in principle, why the necessary "special connection" must take the form of some inherent feature of the work. In the particular circumstances of the present case as identified by the Judge, I am confident that Parliament must be taken to have intended that employment relationships of this kind, parasitic as they are on the employee's spouse's status as a member of the armed forces posted abroad, should fall within the scope of British employment law.

1. Mr Coppel also submitted that the recent decision of the Court of Appeal in Duncombe (above), though it was primarily concerned with other issues, supported his case. In Duncombe the claimant was seconded from Britain to work as a teacher at a school in Germany which is one of the "European Schools" established to cater for the education of staff working in EU institutions. It was held that on Serco principles he did not come within the scope of British employment legislation. But the case did not have the special features relied on here. In particular, the claimant did not qualify for employment on the basis of being a dependant of a public servant posted abroad.

1. Section 6 (1) of the Sex Discrimination Act 1975 provides that:

It is unlawful for a person, in relation to employment by him at an establishment in Great Britain, to discriminate against a woman …

Section 10 provides:

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

(a)

the employee does his work wholly or partly in Great Britain, or

(b)

the employee 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 out at that establishment, and

(c)

the employee is ordinarily resident in Great Britain: -

(i)

at the times when he applies for or is offered the employment, or

(ii)

at any time during the course of the employment.

1. On the face of those provisions the Employment Tribunal plainly had no jurisdiction to entertain Mrs Wallis's sex discrimination claim. However, the Judge was referred to the decision of this Tribunal, Elias P. presiding, in Bleuse v MBT Transport Ltd [2008] IRLR 264. The effect of Bleuse has since been considered by the Court of Appeal in Duncombe, and it is convenient to adopt the summary from the judgment of Mummery LJ at paras. 98-101 (p. 342):

**

1. In Bleuse the employer was a company registered in the United Kingdom. Throughout his employment the employee, who was a German national living in Germany, worked mainly in Germany and Austria, but never in this country. He was employed by the British company through an Austrian citizen based in Austria. His contract contained an English choice of law and English jurisdiction clause. When the contract came to an end he took advice about recovery of money which he alleged was wrongfully withheld from him. On advice from his Austrian lawyer (Dr Frankenstein) that English was the applicable law he began proceedings in the ET. Some of his claims, such as unfair dismissal, ran into time problems. One of his claims related to his right to receive holiday pay. That right derived from the Working Time Directive 2003/88/EC, which was transposed into domestic law by the Working Time Regulations. Mr Bleuse alleged that there had been a failure on the part of his employer to provide holiday pay under the Regulations and in breach of contract.**

99. The ET declined jurisdiction in relation to his holiday pay, because he was not based in the UK. It was argued on his behalf in the appeal to the EAT that the ET decision had denied him an effective remedy in respect of his directly effective EC rights under the Working Time Directive. It was submitted that the courts had to construe the statutory rights to give effect to the EC rights and Serco was distinguished as a case concerned only with purely domestic rights.

100. In the part of his judgment on the rights derived from EC law, Elias P noted that there was no express territorial limitation on the scope of the Working Time Regulations. Any limitation had to be implied. He accepted the submission that English law, in the form of the Working Time Regulations, was the relevant domestic law for giving effect to the directly effective rights under the Directive. He noted that English law was the proper law of the contract. That brought in its train the statutory rules relating to the contract. Whether the employee could take advantage of it depended on the proper reach of the statutory provision in issue. On that question Elias P said this –

56. It follows in my judgment that at least in circumstances where either English law is the proper law of the contract, or where it provides the body of mandatory rules applicable to the employment relationship by virtue of Article 6(2) of the Rome Convention, an English court properly exercising jurisdiction must seek to give effect to directly effective rights derived from an EU Directive by construing the relevant English statute, if possible, in a way which is compatible with the right conferred.

57. In this case, absent any question of EU rights, I would accept that there is no reason to think that the territorial reach of these Regulations would be any different to the limitation found in the Employment Rights Act as interpreted in Serco. However, in my judgment the implied limitation that might otherwise be deemed to be appropriate must be modified to ensure that directly effective rights can be enforced by the English courts. That is so even if on an application of the Serco principles the base would not be in Great Britain. The scope of the provision must be extended to give effect to the directly effective rights under EU law. That law operates as part of the system of domestic law and must be given effect accordingly. I accept the argument ... that if this were not done it would mean that the principle of effectiveness would not be satisfied: there would be no effective remedy for the breach of the EU right.'

101. That judgment focused on directly effective EC rights in the Directive, on the construction of the provisions of domestic law in the form of the implementing Regulations and on the need to give effect to those rights so as to be compatible with the right to holiday pay derived from the Directive: see also paragraphs 58 and 59.

1. At para. 25 of the Reasons the Employment Judge concluded that "the Bleuse principle" applied to Mrs Wallis's claim. Her reasoning is quite short but the essential steps can be analysed as follows:

(1) Mrs Wallis was complaining of treatment contrary to what the Judge described as "the relevant European Union directives". She did not identify the directives in question but it is clear that she had in mind the Equal Treatment Directive (76/207/EEC) as subsequently amended and supplemented (e.g. by the Burden of Proof Directive (97/80/EC)): the Directive has since been superseded but it was in force at the material time. Art. 1 of the Directive requires member states to give effect to "the principle of equal treatment for men and women … as regards working conditions". The principle of equal treatment is defined in art. 2.1 as prohibiting any discrimination whatsoever on grounds of sex or by reference to marital or family status. As confirmed by art. 3.1 (b), "working conditions" includes dismissal.

(2) The rights conferred by the Equal Treatment Directive are directly effective in the sense that they are sufficiently clear and precise not to require further elaboration by EC or domestic legislation. (The Judge used the term "directly enforceable", which may be ambiguous, because of the point referred to at (3) below; but that does not matter if the substantive analysis stands up.)

(3) It is true that, since the rights are derived from a directive, they are not directly applicable in the sense that they can be relied on in the absence of implementing domestic legislation; but it is well established that the Tribunal was under a duty to construe any such legislation, so far as possible, so as to give effect to those rights, even at the cost of departing from the natural meaning of the statutory language: the Judge referred to the well-known decision of the House of Lords in Litster v Forth Dry Dock and Engineering Co. Ltd. [1989] ICR 341, but she could equally have referred to Pickstone v Freemans plc [1988] ICR 697.

(4) Bleuse applies that approach in the specific case of territorial limitations. The Working Time Regulations contain no provision expressly defining their territorial scope; but Elias P. held that other things being equal Serco would fall to be applied. However, that would mean that in the ordinary case an expatriate employee would fall outside their scope. On the premise that such a result would be contrary to the intention of the Working Time Directive – i.e. that the Directive was intended to confer rights on expatriate employees (at least within the EU) – the "principle of effectiveness" meant that the normal domestic rule about territorial scope fell to be displaced: see para. 57 of Elias P's judgment, quoted by Mummery LJ in Duncombe (above). That premise is not in fact expressed, but it seems to me plainly correct: it is inconceivable that the Directive would permit whichever domestic law was applicable - which would depend, as Elias P. says, on the proper law of the contract and/or the Rome Convention – to afford lesser rights to employees working in the territory of a different member state.

(5) That reasoning applied to the present case, since it is well established that the 1975 Act (together with the Equal Pay Act 1970) is to be treated as the domestic legislation which is intended to implement the UK's obligations under EC sex discrimination legislation. The Judge expressed herself willing to read into section 6 (1) of the 1975 Act whatever qualifying words were necessary to give the Tribunal jurisdiction over Mrs Wallis's claim.

1. The Court of Appeal in Duncombe has now approved "the Bleuse principle". The case raised a point analogous to that in Bleuse about the territorial scope of the Fixed-Term Employees (Prevention of Less Favourable Treatment) Regulations 2002. In para. 130 of his judgment Mummery LJ says:

Under [the Bleuse principle] there is an obligation on the part of the member state to make rights under the Directive effective by providing an effective domestic law forum for enforcement. That can be done by modification, if necessary, to the extra-territorial or other limitations, which are otherwise a barrier to the enforcement of the EC right.

1. One potential distinction between the present case and both Bleuse and Duncombe is that the relevant legislation in those cases did not contain any express territorial limitation of the kind contained in the 1975 Act: rather, the relevant limitation arose only from the operation of what the Court of Appeal in Duncombe called "the Serco principles". It might be thought that it is easier to "read down" restrictions on territorial scope which depend not on express provision but only on a process of implication in circumstances where the legislation is silent. But Mr Coppel did not take this point: that is, he did not contend that the words of section 6 of the 1975 Act were too fundamental to the scheme of the Act for it to be possible for them to be qualified. I can see why he may have chosen not do so. The "interpretative obligation" is increasingly being recognised as very strong: see Ghaidan v Godin-Mendoza [2004] AC 557 (and, most recently, Coleman v EBR Attridge Law LLP . Further, Elias P. in Bleuse did not place any weight on the fact that the Serco principles derive from presumed rather than express statutory intention. (I note also that at para. 59 (p. 271) he considers the case of Williams v University of Nottingham Likewise Mummery LJ at para. 130 of his judgment in Duncombe (above) puts the matter in very general terms.

1. Instead, Mr Coppel sought to distinguish the present case from Bleuse and Duncombe on two bases.

1. First, he submitted that whereas the relevant Directives in those cases – the Working Time Directive and the Fixed-Term Workers Directive – conferred directly effective rights on employees "outside the member states in which they are sought to be invoked" the Equal Treatment Directive did not do so. There was thus "no mismatch between the territorial grasp of [the Equal Treatment Directive] and the Sex Discrimination Act 1975". I can see no such distinction. None of the three Directives contains any express provision about "territorial grasp", and neither Bleuse nor Duncombe proceeds on the basis that the Directives with which they were concerned did so. Rather, it is clear that the premise of Elias P's reasoning in Bleuse, albeit unspoken, was that the Working Time Directive necessarily required member states to accord the rights conferred by it to all employees working (at least within the EU) under contracts of which their law was the proper law or the applicable law under art. 6 (2) of the Rome Convention. There is no basis for applying different reasoning to the Equal Treatment Directive.

1. Secondly, he relied on an element in Duncombe which did not feature in the present case. The claimant in Duncombe had been dismissed because he was a fixed-term employee and his term had expired. Although that was a breach of his rights under the Fixed-Term Workers Directive, his claim was properly formulated as one of unfair dismissal. The employer contended that that meant that he could not rely on the Bleuse principle because the law of unfair dismissal was purely domestic and did not "derive from or give effect to any obligation under EC law". The Court of Appeal held that this made no difference because unfair dismissal was the appropriate remedy for vindication of his EC-derived right under the Directive. Mr Coppel's submission on that basis is put in his supplementary skeleton argument as follows:

That reasoning cannot be transposed to Mrs Wallis's claim under the Sex Discrimination Act 1975. Even if Directive 76/207/EEC were somehow directly enforceable, s. 6 of the Sex Discrimination Act 1975 (being the basis for Mrs Wallis's claim) itself derived from or established for a reason of EC law. Section 6 confers a right, the remedies for a breach of which are spelled out in Part VII (ss. 62-76) of that Act.

With respect to Mr Coppel, I cannot understand the point being made. The fact that in Duncombe there was an extra complication, which had to be addressed by the particular reasoning indicated, does not mean that that reasoning has to be applied in cases where that complication is absent. Even if the distinction relied on by the employer in Duncombe had succeeded it would not have affected the outcome in cases like the present or Bleuse, where the right and the remedy are provided for in the selfsame statute.