Diggins v Condor Marine Crewing Services Ltd

The principal issue in this case is whether a seaman, who was employed on a ship but not one registered in a port in Great Britain, can in any circumstances bring a claim for unfair dismissal. The second issue is whether, assuming that he can, he is entitled to do so in the particular circumstances in this case.

The background facts are not in dispute and were not so before the Employment Tribunal. They are as follows. Condor Marine Crewing Services Limited, the appellant, is a company operating out of and registered in Guernsey. It employed Mr Diggins through a subsidiary company as a chief officer on board a vessel which plied its trade primarily between the Channel Islands and Portsmouth. The vessel itself is registered in Nassau in the Bahamas. For the duration of Mr Diggins’ duties on board ship, which typically involved two-week rosters, he lived on the vessel. His home is in Lowestoft. Mr Diggins was dismissed with effect from 1 April 2007. He claimed that his dismissal was unfair and the company denies this. However, a preliminary issue raised before the Employment Tribunal was whether it had jurisdiction to hear his claim. The Employment Tribunal held that it did not, but that decision was overturned on appeal by the Employment Appeal Tribunal, HHJ Burke QC sitting alone. The EAT, in a judgment of conspicuous quality, concluded that the tribunal did in principle have jurisdiction to hear a claim for unfair dismissal, notwithstanding that the employee was employed on board a vessel registered outside Great Britain and that the relevant conditions necessary to satisfy the exercise of that jurisdiction existed in this case. Both these conclusions are the subject of appeal.

The right to claim for unfair dismissal was first introduced by the Industrial Relations Act 1971. Since then it has undergone a number of transformations and modifications and has been located in a number of different Acts of Parliament. The current law is contained in Part 10 of the Employment Rights Act 1996.

Three features of the legislation as they bear upon this case have, until changes by the Employment Relations Act 1999, remained constant, although the precise statutory language has changed from time to time. First, the right to claim for unfair dismissal -- and indeed for various other statutory rights too -- has been excluded from those who, under their contract of employment, ordinarily work outside Great Britain. Second, there has always been a provision which specifically identifies how that test should be applied with respect to persons employed to work on board a ship registered in the UK. Third, there have, in addition, been a range of specific provisions dealing expressly with the position of persons working on board ships, so, for example, share fishermen (broadly, those who receive a profit from the enterprise rather than being paid a wage) have been largely excluded from unfair dismissal and other rights. Merchant seamen as a group have also been excluded from the scope of certain other statutory rights.

Before 1999 the relevant legislation was as follows. Section 196, which is headed Employment Outside Great Britain, provided in subsection (2) that:

The application of that test does not apply, with respect, to those employed on board a ship registered in the UK by subsection (5), which was as follows:

Section 199 is headed “Mariners” and disapplies to varying extents particular rights from particular categories of seamen. Share fishermen are dealt with by Section 1992 and 3 respectively. Subsections (4) and (5) then deal expressly with the position of merchant seamen. That legislation was altered by Section 32 of the Employment Relations Act 1999. It repealed both Section 1962 and subsection (5). However, the substance of the latter provision was maintained by adding two subsections to Section 199. These are now subsections 199(7) and 8 respectively. Section 199(7) is as follows:

the ship’s entry in the register specifies a port in Great Britain as the port to which the vessel is to be treated as belonging.

under his contract of employment the person employed does not work wholly outside Great Britain, and

the person employed is ordinarily resident in Great Britain.”

Subsection 8 identifies the relevant provisions and they include the right to claim for unfair dismissal under Part 10. It will be noted that the language of subsection (7) departs in certain respects from the old Section 1965 of the 1996 Act but in a way which materially alters its sense; in particular, the reference to the register maintained under Section 8 of the Merchant Shipping Act is to a register of ships in the United Kingdom. It is to be noted that jurisdiction can only be exercised, however, where the entry in the ship’s register specifies a port in Great Britain; no doubt this is because there is a separate body of employment law relating to Northern Ireland and so ships registered there are dealt with by their own specific laws.

The question which then arose, following the repeal of Section 1962, was whether there was now any limitation at all on the jurisdiction of the tribunal to deal with somebody who had been unfairly dismissed. That matter was considered by the House of Lords in Lawson v Serco [2006] UKHL 3 [2006] ICR page 250. Their Lordships unanimously held that there was a limitation. Lord Hoffman, with whose speech Lord Woolf, Lord Rodger of Earlsferry, Lord Walker of Gestingthorpe and Baroness Hale of Richmond concurred, concluded that Parliament could not have intended that any employee employed anywhere in the world could take a claim for unfair dismissal before the British courts. He analysed the link which was necessary in order for the tribunal to exercise jurisdiction. He identified mariners as falling within the group of peripatetic employees and identified, as a relevant test for that group, whether their base was in the United Kingdom. I return to consider the details of that case later.

The case clearly establishes therefore that the mere fact that somebody is an employee who sometimes works outside the United Kingdom does not necessarily prevent him from claiming unfair dismissal if and when he is dismissed from employment; it depends whether he can establish the necessary link with the United Kingdom stipulated by the court in Serco. The question arising in this appeal is this: What is the relationship between the rules formulated by the House of Lords in Serco and the particular statutory provision in Section 199(7) dealing with the position of those working on British registered ships. Both parties accept that it is in principle no different to a relationship which formally existed between the general statutory exclusion for those ordinarily working abroad and the exception for those on British ships. Mr Meade, counsel for the company, submits that Section 199(7) is exhausted over the rights of those employed on ships. Either jurisdiction is afforded by that subsection or there is no jurisdiction to hear their claims. Accordingly, since the provision only applies to those working on ships registered in Great Britain, the tribunal has no jurisdiction to deal with the claims for unfair dismissal brought by an employee working on any other ship, wherever it operates and even if it operates exclusively within the United Kingdom. We were shown statistics which demonstrate that there are a number of ships falling into that category.

Mr Adjei, counsel for Mr Diggins, contends that this analysis involves a fundamental misconstruction of Section 199(7). That section applies only to those who are employed on ships registered under Section 8 of the Merchant Shipping Act. For such employees a tribunal has jurisdiction if, but only if, the three conditions set out in the subsection are satisfied. However, if they are not so employed the tribunal will still have jurisdiction provided the employee can bring himself within the application of the Serco principles. The question is one of construction of Section 199(7).

In my judgment, simply as a matter of language, the argument of Mr Adjei must prevail. It is not the natural reading of subsection (7) to say that it is intended to deal exhaustively with the position of all persons employed on ships. If that had been the intention, the subsection would necessarily, in my view, have been drafted differently. In particular, the phrase “if, but only if” would have had to be placed earlier in the Section. The subsection would have needed to say that the relevant rights are afforded to those employed on board ships if, but only if, the ship is registered in the appropriate UK register and if the other conditions apply. Instead, it identifies a class of persons, namely those employed on ships under Section 8 of the Merchant Shipping Act, and then provides the circumstances in which a tribunal will have jurisdiction with respect to that class.

In my judgment, the statutory history strongly supports this analysis. The specific provision dealing with UK registered ships has always been framed by adopting a deeming provision, which deems that persons on British registered vessels, provided the relevant conditions are met, are to be treated as if they were ordinarily employed in Great Britain even if the application of the usual rules would have dictated otherwise.

Furthermore, if the intention had been to give rights of unfair dismissal only to this limited category, it was a bizarre way of seeking to achieve that objective.

We have been taken to certain authorities which have discussed the effect of the deeming provision. These are Royle v Gloptik Management Ltd [1977] ICR 552 EAT, Wood v Cunard Line Ltd [1990] IRLR 281 CA and The Geest Line v Wright, 26 July 1994 EAT/873/93. Mr Meade accepts that the Geest Line case is inconsistent with his analysis but he relies upon a certain passage in the Wood case to support his approach. I will not go into each of these authorities; they were dealt with very thoroughly by HHJ Burke in his judgment and he concluded that the three decisions in fact supported Mr Adjei’s submission. I entirely agree with that conclusion for all the reasons he gives in his decision, paragraphs 25 to 28.

There is in principle no logical reason why those on board ships registered with the UK should automatically be excluded, even where they satisfy the Serco test for similarly placed peripatetic workers. As Mr Adjei points out, it would exclude from the exercise of the right cleaners employed to clean a foreign registered ship which travels in the Thames or a seaman living in Southampton who works on a ship registered outside Britain which operates solely in UK waters between the south coast and the Isle of Wight. Indeed, to exclude them would leave arbitrary differences between those working on board aircraft and those employed on ships. The former can clearly bring themselves within the jurisdiction if they are based here, as the Serco case demonstrates, whereas on Mr Meade’s argument the latter would be unable to do so. Mr Meade suggests that this is irrelevant to the issue of construction, I do not agree. It is not at the forefront of the argument, but in my view the practical implications of one interpretation as against another would always be relevant to the question of construction.

I therefore have no doubt that Mr Meade’s primary argument is wrong. However, in deference to his detailed submissions I deal briefly with certain other arguments he advanced.

First, he said it would be inconsistent with the principle of comity if the jurisdiction of the English courts were to extend to regulating the social affairs of those who work on board vessels with a foreign flag. I do not accept that. As Lord Hoffman pointed out in the Serco case, it is indeed, in part at least, the interests of comity which preclude the UK legislature from seeking to regulate the affairs of anyone, wherever they may be situated in the world, but the issue here is what link ought to be established in order to justify a tribunal in Great Britain exercising unfair dismissal jurisdiction. It is open to Parliament to decide whether and to what extent that link is needed. Formerly they did so; the expressed statutory provision was repealed, but the House of Lords in Serco filled the breach by laying down certain principles in their place for determining what is deemed to be a sufficient link with the UK. I do not think that any argument based on comity is of assistance here.

Second, reliance was placed on certain observations of Lord Hoffman in Serco which, submits Mr Meade, support his analysis. Lord Hoffman made some observations in the course of his speech to the effect that Parliament had made a provision for mariners with respect to the issue of jurisdiction. However, in my judgment, he was not thereby intending to indicate that the provision they had made was exhaustive of the rights of all those serving on board ships. That, in my judgment, is an impossible inference to draw from the comments relied upon. Moreover, as HHJ Burke noted below, their Lordships in Serco heard no argument in relation to the proper scope of Section 199(7). It was not an issue before the court and in my judgment it is highly unlikely that Lord Hoffman even had in mind the kind of argument that is being advanced in this case. Accordingly, I do not think this assists Mr Meade either.

Third, Mr Meade observed that if his analysis is wrong it could lead to some curious results. For example, it may be that someone on board a British registered ship would be excluded from claiming because not ordinarily resident in Great Britain, whereas a person on a foreign registered ship would not automatically be ruled out by that consideration alone and might be able to establish his base here. I doubt whether in practice the anomaly will exist since it is very unlikely that anyone who is ordinarily resident would be able to establish a base in the UK. In any event, I do not accept that any such limited anomaly which might exist can dictate a construction of Section 199(7) which is at odds with its plain wording.

It follows that, in my judgment, the Tribunal was not prevented from exercising jurisdiction simply because the ship on which Mr Diggins worked was registered in the Bahamas. The only issue therefore is whether the tribunal has jurisdiction under the Serco principles.