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05/04/1997

Addison v. Denholm Ship Management (UK) Ltd

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Employment Appeal Tribunal

Application of employment law to employees working in "flotels" providing facilities for oil rigs and gas installations in the Scottish sector the Continental Shelf.

Appeal by 145 seamen who were employed by a Swedish company providing facilities to oil and gas installations by means of accommodation vessels known as "flotels". These flotels were situated outside the UK territorial waters in the Scottish sector of the continental shelf in the north Sea. Contracts for provision of these services were transferred to an Aberdeen company and the appellants were dismissed. They complained of unfair dismissal to a Scottish industrial tribunal. The industrial tribunal decided as a preliminary issue of law that the flotels were not ships, the flotels were not situated in the UK immediately before the transfer so that under regulation 3(1) the Transfer of Undertakings (Protection of Employment) Regulations 1981 and Council Directive 77/187 EEC did not apply but that as the seamen were working outside Great Britain per s.14(2) Employment Protection (Consolidation) Act 1978 the tribunal had jurisdiction to hear the appellants' complaint. The appellants appealed against the decision that the 1981 Regulations did not apply while the respondents appealed against the decision that the flotels were not ships.

HELD: (1) The continental shelf was not within the territorial scope of the EEC and that the Acquired Rights Directive 77/187/EEC did not extend to employment in that area. (2) A flotel was a ship and the industrial tribunal had misdirected itself. The 1981 Regulations did not apply to the crews of flotels. (3) The appellants, however were manning vessels which provided the workers for off-shore installations and this was an activity connected with the exploration of the seabed or the exploitation of the natural resources of the sea bed or subsoil within s.137(2) of the Employment Protection (Consolidation) Act 1978 which entitled industrial tribunal to entertain claims by the appellants. (but not under the 1981 Regulations). Appeal dismissed. Cross-appeal allowed in part.

Jeremy McMullen QC and Melanie Tether instructed by Norton Rose for the respondents.

[1997] ICR 770

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