Case Alert - Territorial scope of statutes

In Brown v New Zealand Basing Limited [2017] NZSC 139, [2018] 1 NZLR 245, the Supreme Court adopted a sui genesis approach to interpreting the jurisdictional reach of employment law legislation.  They preferred this approach to a more traditional conflict of laws analysis.

The issue was whether the statutory right not to be discriminated against on the grounds of age (implicit in the Part 9 personal grievance provisions of the Employment Relations Act 2000) applied to two Auckland-based pilots. They were employed by a subsidiary of Cathay Pacific registered in Hong Kong. The relevant employment agreement provided that the governing law was that of Hong Kong. The Supreme Court held that the statutory right against discrimination did apply, which prevented a mandatory retirement age of 55.  The contractual choice of law was irrelevant.

First judgment

The first judgment was delivered by William Young J (with Glazebrook J concurring). This judgment began with describing the conflict of laws approach to statutes described in Dicey, Morris and Collins on the Conflict of Laws [4]. That lists six categories of statutory provisions, two of which were potentially relevant:  

  • For the first category, where there is no indication of their application in space (ie geographic reach), the two potential approaches were: (i) interpret the statute in light of its purpose (criticised as artificial in many cases); or (ii) adopt a conflict of laws approach of characterizing the issue and then selecting the relevant conflict rule to the question so characterized.
  • The fifth category was overriding statutes, which contain mandatory provisions regardless of the normal conflict of law rules.

The Court of Appeal adopted the latter type of approach, by characterising the provisions as contractual in nature and then determining whether the 2000 Act provisions were mandatory overriding rules [6].

Instead, the Supreme Court Judges preferred a single step of assessing the territorial reach of the legislation using a purposive approach [8]. They concluded that statutory employment rights have a sui generis character, the application of which is not necessarily dependent on the proper law of the employment agreement [66]. The general right not to be discriminated against is a free-standing right [69], not confined to or dependent on an employment relationship, so it cannot be excluded by a bona fide choice of another law as the proper law for the employment agreement [68]. It can be breached by any conduct which occurs within New Zealand [68]. They left undetermined whether a different position might apply in respect of the right to be unjustifiably dismissed in cases not involving unlawful discrimination [73].

Majority judgment

The second judgment was given by Ellen France J (with Elias CJ and O‚ÄôRegan J concurring). They agreed with the other Judges in terms of the result, but expressed their reasons a little differently. Those judges also saw the matter as one of statutory interpretation because of the sui generis nature of employment law [77]. Various provisions indicated that consideration had been given to the extent of the territorial application of the Act, and it was intended to apply in some circumstances with cross-border features, unless the specified exclusions applied [88].  At [86], the majority concluded that there was no clear statutory language to exclude the approach in Lawson v Serco Ltd [2006] UKHL 3, [2006] 1 All ER 823 [Crofts] (that the home base of a peripatetic employee determines the applicable law for the purposes of non-discrimination [78]). Interpreting the Employment Relations Act 2000, incorporating rights in the Human Rights Act 1993, the appellants fell within the intended scope of the Act and not within any exceptions [89]. The choice of law clause was irrelevant [90].  However, the majority also left open the possibility that different jurisdictional scope might apply to other aspects of the Employment Relations Act 2000.

Conclusion

This case establishes that the cross-border scope of statutes will be a matter of interpretation in at least some cases.  However, the boundaries are not clear as to when this approach will be appropriate, compared with the more traditional conflict of laws analysis of characterising, applying the relevant choice of law rules, then determining whether mandatory provisions have overriding effect.