Yacht Management Company Ltd v Gordon – where does the Employment Tribunal have territorial jurisdiction?

Posted: 21/03/2024

The Employment Appeal Tribunal (EAT) has upheld an employment tribunal’s decision that it has territorial jurisdiction to hear claims brought by a seafarer, despite the fact that the seafarer’s employer did not carry out any business in the UK, and that she worked on a vessel that did not enter a UK port or UK waters at any time during her employment.

In Yacht Management Company Ltd v Gordon, the claimant, Ms Gordon, was employed by Yacht Management Company Ltd (YMC Ltd) from 25 March 2019, until she was dismissed in October 2021, purportedly by reason of redundancy.

Following her dismissal, Ms Gordon brought various claims against YMC Ltd in the Employment Tribunal (ET) under the Employment Rights Act 1996 (ERA 1996) and the Equality Act 2010 (EqA 2010).

YMC Ltd sought to have Ms Gordon’s claim struck out on the basis that the ET did not have territorial jurisdiction to hear Ms Gordon’s claim. In order for seafarers to be able to rely on British statutory employment rights, there must be ‘sufficient connection’ between the circumstances of the seafarer’s employment and British employment law.

In this case, YMC Ltd was registered in Guernsey, did not carry out any business in the UK, did not have any place of business or any berths within the UK, and the vessel on which the claimant worked never entered a UK port or UK territorial waters.

However, despite these factors, the EAT upheld the tribunal’s finding that there were ample facts to support its conclusion that there was a sufficient connection between Ms Gordon’s employment and British employment law. The factors included the location of the bank account into which Ms Gordon’s salary was paid (Great Britain); the fact that she accounted to HMRC for tax; the governing law of the contract, which was expressed to be England and Wales; and, importantly, the fact that the tribunal concluded that Ms Gordon’s duties began and ended in Great Britain.

This ruling underlines the importance of the longstanding principle that a seafarer’s ‘base’ (being the place where they begin and end a ‘tour of duty’) should be treated as their place of employment, not the location of the ship on which they work.

The complication in this case was the fact that the vessel on which Ms Gordon worked never entered UK territorial waters – it set sail from Lemwerder in Germany, where the vessel was situated during Ms Gordon’s employment. It follows (YMC Ltd argued) that all of Ms Gordon’s tours of duty commenced and ended in a location other than Great Britain.

However, the tribunal disagreed. It concluded that Ms Gordon’s duties began and ended in Aberdeen, this being the place where she commenced her various journeys to join the vessel and to which she returned after her tours of duty. The EAT upheld this finding and allowed Ms Gordon’s claim to proceed.

Importantly, the EAT also highlighted the distinction between ‘territorial jurisdiction’, which concerns the territorial reach of a particular statute such as the ERA 1996 and the EqA 2010, and ‘international jurisdiction’, which concerns whether a particular jurisdiction is the appropriate forum to hear a claimant’s claim.

Both matters are relevant to the question of whether a claim can be heard in a British employment tribunal. However, in this case, no submissions appear to have been made by YMC Ltd as to whether, having regard to international law, the British ET was the appropriate forum to determine Ms Gordon’s complaint. The EAT therefore surmised that international jurisdiction was not in dispute, despite the fact that there was an absence of any form of business connection between YMC Ltd and the UK.

This case is consistent with the finding of the EAT in the earlier case of Windstar Management Services Ltd v Harris UKEAT/0001/16/LA. However, a fundamental point which arises in maritime cases where the vessel on which work is to be performed is regulated under the Maritime Labour Convention (MLC), is that crew cannot be admitted to such a vessel to commence their duties of work until such time as they have provided the master of the vessel with their MLC required documentation (their signed seafarer employment agreement, and up to date certificates (including current medical certification)).

If crew members do not have these documents upon seeking to join the vessel, they cannot work on the vessel – port state authorities can impound vessels where there are such documentation irregularities.

On this basis, it is difficult to understand how the crew can be found to have commenced their work prior to being able to embark on the vessel. Moreover, it leads to the seemingly absurd result that each crew member on a vessel will likely have a different base (unless they all live together), as a result of mere happenstance arising from where they live.

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