Lawson v Serco Ltd [2006] UKHL 3 is a UK labour law case, concerning the test for when workers are covered by employment rights when they work abroad.

[1] Lawson v Serco Ltd involved three joined appeals, where the question was whether the claimants could bring cases for unfair dismissal in the UK within the Employment Rights Act 1996, given that they worked part of their time abroad.

Botham worked for the Ministry of Defence as a youth worker, based in the UK, but performing various jobs in German establishments.

Lord Hoffmann held that rights were a matter of construction, and it was mistaken to try to formulate an ancillary rule of territorial scope which must then be interpreted and applied, like ERA 1996 section 196 had been.

Thus in Lawson and Botham, employer and employee both had close connections with Great Britain but all the services were performed abroad.

Counsel said that support for this argument could be found in the brief statement of the Minister of State, Department of Trade and Industry (Mr Ian McCartney) when recommending the repeal of section 196 to the House of Commons: see Hansard (HC Debates) 26 July 1999, cols 31-32.

It is no criticism of Mr McCartney's moment at the despatch box to say that I have not found his remarks particularly helpful in dealing with problems which he is unlikely to have had in mind... Parliament was content to accept the application of established principles of construction to the substantive rights conferred by the Act, whatever the consequences might be.’ 14.

... insofar as section 196(3) prevented rights falling within the Directive from being enjoyed by employees who ordinarily worked outside Great Britain but were temporarily posted here, its repeal was intended to allow the courts to give effect to the Directive by interpreting the relevant substantive provisions as applicable to posted workers.

On the other hand, the fact that we are dealing in principles and not rules does not mean that the decision as to whether section 94(1) applies (and therefore, whether the Employment Tribunal has jurisdiction) is an exercise of discretion.

The section either applies to the employment relationship in question or it does not and, as I shall explain later, I think that is a question of law, although involving judgment in the application of the law to the facts.... [Lord Hoffmann referred to Carver v Saudi Arabian Airlines [1999] ICR 991, where a lady could not claim unfair dismissal because her contract was originally contemplating her being in Jeddah, even though she moved around and ended up working in London.

But the common sense of treating the base of a peripatetic employee as, for the purposes of the statute, his place of employment, remains valid.

It was applied by the Court of Appeal to an airline pilot in Todd v British Midland Airways Ltd [1978] ICR 959, where Lord Denning MR said, at p 964: ‘A man's base is the place where he should be regarded as ordinarily working, even though he may spend days, weeks or months working overseas.

Like the majority in the Court of Appeal, I think that Lord Denning's approach in Todd v British Midland Airways Ltd points the way to the answer in Crofts v Veta Ltd....

The circumstances would have to be unusual for an employee who works and is based abroad to come within the scope of British labour legislation.

Mr Crow submitted that in principle the test was whether, despite the workplace being abroad, there are other relevant factors so powerful that the employment relationship has a closer connection with Great Britain than with the foreign country where the employee works.

This may well be a correct description of the cases in which section 94(1) can exceptionally apply to an employee who works outside Great Britain, but like many accurate statements, it is framed in terms too general to be of practical help.

The fact that the employee also happens to be British or even that he was recruited in Britain, so that the relationship was "rooted and forged" in this country, should not in itself be sufficient to take the case out of the general rule that the place of employment is decisive.

Something more may be provided by the fact that the employee is posted abroad by a British employer for the purposes of a business carried on in Great Britain.

The distinction is illustrated by Financial Times Ltd v Bishop [2003] UKEAT 0147, a decision of the Employment Appeal Tribunal delivered by Judge Burke QC.

Finally I should note that in the case of expatriate employees, it is quite possible that they will be entitled to make claims under both the local law and section 94(1).