Territorial jurisdiction test clarified again

United Kingdom

In Creditsights Ltd v Dhunna the Court of Appeal has held that when considering if an expat employee is able to show that employment has a ‘sufficiently strong connection’ with Britain and British employment law (to bring a claim for unfair dismissal), this does not require a ‘formulaic’ comparative exercise between the legal systems of the competing jurisdictions. What is required is a careful analysis of the particular facts, and the reality of the employee’s circumstances, related to the competing pulls of the different jurisdictions.


Creditsights Ltd (CSL), was a British company operating out of London. It provided independent research to worldwide institutional investors. CSL’s parent company was based in New York. In 2006 Mr Dhunna began his employment with CSL in London as part of the European sales team. In 2009 Mr Dhunna moved to the Dubai office where he focused solely on sales to Middle Eastern, Asia, and African clients. In May 2010 Mr Dhunna was summarily dismissed for alleged misconduct. At that time he had been planning to move to the Singapore office. Dhunna brought an action before the employment tribunal for (i) unfair dismissal under s94(1) ERA and (ii) breach of his right to be accompanied at a disciplinary hearing under section 10 of the Employment Relations Act 1999. The parties agreed that the same territorial jurisdiction applied to both rights.

The Employment Tribunal (ET) held that Mr Dhunna did not fall within any of the now well-known exceptions that had been set out in Lawson v Serco Ltd, and as such it did not have jurisdiction to hear the claims.

In relation to the ‘sufficiently strong connections’ exemption from Lawson, seeking to identify whether the connections with Great Britain and British employment law were such that it could be presumed Parliament must have intended that section 94 ERA should apply, the ET carried out a full assessment of the facts and circumstances and found:

  • Mr Dhunna was on CSL’s payroll only for convenience and he was paid in dollars. He was not entitled to the CSL pension plan or health insurance scheme;
  • Had Mr Dhunna not been dismissed he would have moved to Singapore from where a main office for the Asian network was to be established; he had effectively severed all links with the UK

On appeal, the Employment Appeal Tribunal (EAT) found that the ET had made an error in law as the judge has not carried out a comparison between the strength of connections between Mr Dhunna and Britain and British employment law with the strength of connections with Dubai to the extent now required by the case authorities decided following Lawson. CSL appealed.


The Court of Appeal has held that the suggestion the ET should have undertaken a critical comparative exercise of the competing jurisdictions was incorrect; the authorities did not support this type of heightened scrutiny. The Court held that the judge had carried out a full and careful analysis if the facts such that he had made a proper comparison of the competing connections and drawn succinct conclusions. The judge had carried out a proper evaluation of whether or not the employee satisfied the ‘sufficiently strong connection’ test to exempt him from the general rule.

In support of the EAT’s decision, Mr Dhunna argued that a critical and formulaic comparison was required because the purpose of such inquiry was to determine, at the time of dismissal, which was the more favourable system of law to the employee. The Court of Appeal did not hesitate to reject this argument. The aim of the exercise was not to look to the relative merits of the competing legal system; it was the ‘sufficiently strong connections’ test that it was concerned with.