UK Supreme Court Blog

EDITORS: Dan Tench, Emma Cross, Zainab Hodgson, Francesca Knight, James Warshaw and Natalie Haefner (CMS)
Hugh Tomlinson KC, Matthew Ryder KC, Nandini Bulchandani and Daniel Rudd (Matrix)

On 15-16 July the Supreme Court heard the case of United States of America v Nolan regarding the respondent’s redundancy following the closure of her US military base, RSA Hythe.

Background

The respondent is a British national who had been made redundant from her position as a civilian employee at an American military base in the UK after a decision was taken to close the facility. She brought proceedings in our employment tribunal under the Trade Union and Labour Relations Act 1992, s 189, claiming that her employer had failed to comply with the obligations to consult contained in s 188 of the Act. S 188 of the Act imposes an obligation on an employer to consult with appropriate representatives of the employees when proposing to dismiss 20 or more of them as redundant at one establishment.

Employment tribunal and Employment Appeal Tribunal

The tribunal upheld the respondent’s claim that her employer had acted in breach of s 188 and issued a 30 day protective award. It found that the respondent was an employee representative, and following the decision in UK Coal Mining Ltd v National Union of Mineworkers UKEAT 0397/06/2709, the consultation had been inadequate because it had not commenced prior to the closure decision and had not covered the reasons for the closure. It further stated that it had not been unrealistic to have expected the employer to have consulted about the closure of the facility. The employer appealed to the EAT but it dismissed their submission that the obligation imposed under s 188 should be read as excluding any obligations by an employer which was a sovereign state to consult about a decision made jure imperii, even if collected redundancies were the necessary consequence of the decision. It clarified that once the US had waived sovereign immunity from suit and submitted to the jurisdiction of the ET there was no warrant for giving special construction to s 188.

Court of Appeal

The employer appealed again to the Court of Appeal and it made references to the CJEU which in turn raised a question of its own motion whether a dismissal of this kind fell within the scope of Council Directive 98/59. It stated that by the virtue of the wording in art 1(2)(b) of the Directive, it did not apply to workers employed by public administrative bodies or by establishments governed by the public law. It further stated that the court had already held activities which, like national defence, fell within the exercise of public powers were in principle excluded from classification as economic activity. The CJEU therefore did not believe it was necessary to take into account specifically that in the instant case the military base belonged to a non-Member State as it was already clear the dismissal of staff at the military base did not fall within the scope of the Directive.

Upon receiving the CJEU’s directions the employer contended that the collective redundancy provisions in the 1992 Act should be construed in the same way as Directive 98/59. The Court of Appeal held that, in transposing the Directive into domestic legislation, the draftsman had made what had to have been a deliberate choice not to reproduce the terms in the general exclusion contained in the Directive for public administrative body (PAB) workers. Instead, an exclusion had been made for ‘Crown employment’. It stated that there was no warrant for assuming that he had intended, but incompetently failed, to provide for an exclusion that had precisely corresponded with that contained in the Directive. It had made perfectly good sense for Parliament to have settled for exclusion which had used common law concepts and would be comparatively easy to apply domestically, while recognising that it might be narrower in its effect than the exclusion provided for in the Directive. It therefore held that the CJEU decision had not meant the instant appeal should be allowed. Instead it believed a further hearing was required to determine the issue that had originally led to the reference to the CJEU, regarding at what point the employer’s obligation to consult about collective redundancies under the Directive arose.

Appeal to the Supreme Court

The Supreme Court must now decide whether, given that the CJEU had ruled that the Collective Redundancies Directive had no application to the closure of US military bases, the Court of Appeal was right to find that the UK statute went further, such that the obligations imposed by the 1992 Act, s 188, applied to the closure of the military base.