Protected Cell Company Structure Cited In Employment Case

Scott v EC Maritime PCC Ltd (Debarred) [2016] UKEAT 0032_16_1010 was an appeal against a Judgment of the Southampton Employment Tribunal. The Claimant appealed from that ruling on two grounds, but for the purposes of this article it is the first ground of appeal that is of interest to the present writer, namely, whether the Employment Tribunal erred in concluding that the Respondent's failure to look for alternative work in other protected cells of the Protected Cell Company of the Respondent did not render the dismissal unfair.

A copy of the judgment can be found here: http://www.bailii.org/uk/cases/UKEAT/2016/0032_16_1010.html

Whilst the case does not provide any important judicial insight into PCCs, it is one of very few cases anywhere in the world where a dispute concerning a PCC has come before a foreign court.

The background to the protected cell company structure is set out in the Appeal Tribunal judgment and is quoted below:

"3. The Claimant [upon leaving his former employment] made a career in the security industry; specifically, from 2011, working as a Maritime Security Officer ("MSO"). Initially he had worked for an organisation [the named organisation] and was deployed on various clients' ships, essentially as an armed guard.

4. Towards the end of 2011, [the named organisation] transferred its MSOs - including the Claimant - to the Respondent, a Guernsey-registered company structured on a protected cell basis. A protected cell company has a central hub or core and a number of separate cells into which the company can segregate its assets whilst remaining one single legal entity (see paragraph 10 of the ET's Decision in this regard). The Respondent thus contracted to provide MSOs to [the named organisation] but also to other companies working in the maritime security industry. The Claimant's employment duly transferred to the Respondent, and he was employed on a rolling fixed-term contract from 1 February to 31 January each year, the last such contract effective from 1 February 2014 and then due to expire on 31 January 2015."

The judgment sets out the facts and dispute in question. Suffice it to say for present purposes that by his Employment Tribunal claim the Claimant pursued complaints of unfair dismissal and breach of contract. Importantly, the Employment Tribunal rejected the Respondent's contention that it did not have territorial jurisdiction to determine the Claimant's unfair dismissal complaint and further found that the...

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