United States of America v Nolan

JurisdictionEngland & Wales
JudgeLord Justice Underhill,Lord Justice Rimer,Lord Justice Moore-Bick
Judgment Date04 February 2014
Neutral Citation[2014] EWCA Civ 71
CourtCourt of Appeal (Civil Division)
Docket NumberCase No: A2/2009/1179
Date04 February 2014

[2014] EWCA Civ 71

IN THE COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM The Employment Appeal Tribunal

Mrs Justice Slade and members

UKEAT032808CEA,03290

Royal Courts of Justice

Strand, London, WC2A 2LL

Before:

Lord Justice Moore-Bick

Lord Justice Rimer

and

Lord Justice Underhill

Case No: A2/2009/1179

Between:
The United States of America
Appellant
and
Nolan
Respondent

John Cavanagh QC and Sir Daniel Bethlehem QC (instructed by Nabarro LLP) for the Appellant

No appearance by the Respondent

Lord Justice Underhill

INTRODUCTION

1

This appeal was first before the Court in March 2010. It was decided that a reference needed to be made to the Court of Justice of the European Union ("the CJEU") under article 267 of the EU Treaty. However the reference took an unexpected turn and the principal issue which we now have to decide is one which did not arise at the earlier stages of the case. The full history of the proceedings can be found in the judgment of the Court on the making of the reference ( [2010] EWCA Civ 1223, [2011] IRLR 40), and I need deal with it only to the extent necessary to show how we have got to where we are.

2

Up to 2006 the US Army maintained a watercraft repair facility ("the base") at Hythe in Hampshire. Some 200 civilian employees were employed there. Their employer as a matter of law was the United States of America itself. In early 2006 a decision was made to close the base, with the result that the employees were dismissed for redundancy. One of those employees, Mrs Christine Nolan, who is the Respondent in this appeal, brought proceedings in the Employment Tribunal (with her husband) under section 189 of the Trade Union and Labour Relations (Consolidation) Act 1992 claiming that the USA as her employer had failed to comply with the consultation obligations under section 188 of the Act. Mrs Nolan claimed to be entitled to bring the proceedings as an "employee representative" within the meaning of section 188 (1B) of the Act.

3

It will be convenient at this stage to summarise the relevant statutory provisions, which are contained in Chapter II of Part IV of the 1992 Act. I will refer to them as "the collective redundancy provisions".

4

The primary operative provision of Chapter II is section 188. It has been amended on several occasions both before and after the date of the breach alleged by Mrs Nolan. At the time to which the complaint relates sub-section (1) read:

"Where an employer is proposing to dismiss as redundant 20 or more employees at one establishment within a period of 90 days or less, the employer shall consult about the dismissals all the persons who are appropriate representatives of any of the employees who may be affected by the proposed dismissals or may be affected by measures taken in connection with those dismissals."

Sub-section (1A) prescribed the period within which consultation must take place. Sub-section (1B) defined "appropriate representative" as either the representative of a recognised trade union or, where no trade union was recognised, an "employee representative" appointed or elected in accordance with the terms of sub-para. (b) (i). Sub-section (2) read:

"The consultation shall include consultation about ways of—

(a) avoiding the dismissals,

(b) reducing the numbers of employees to be dismissed, and

(c) mitigating the consequences of the dismissals,

and shall be undertaken by the employer with a view to reaching agreement with the appropriate representatives."

I need not set out sub-section (3). Sub-section (4) required the employer "[for] the purposes of the consultation … [to] … disclose in writing to the appropriate representatives" a number of matters, including, at (a), "the reasons for his proposals". There is nothing relevant in sub-sections (5), (5A) or (6). Sub-section (7) read (so far as material):

"If in any case there are special circumstances which render it not reasonably practicable for the employer to comply with a requirement of subsection (1A), ( 2) or (4), the employer shall take all such steps towards compliance with that requirement as are reasonably practicable in those circumstances …."

I need not set out sub-sections (7A), (7B) or (8).

5

Section 189 provides that where there has been a breach of section 188 an appropriate representative can bring proceedings in the Employment Tribunal, which can make a "protective award" expressed as a number of days' pay for the affected employees.

6

I should refer also to section 273 of the 1992 Act. This provides that the provisions of the Act shall have effect in relation to Crown employment and persons in Crown employment as they do in relation to other employment; but that is subject to certain specified exceptions, which include the provisions of Chapter II of Part IV (see sub-section (2)). Thus the collective redundancy provisions do not apply in the case of persons in Crown employment. "Crown employment" is defined in sub-section (3) as "employment under or for the purposes of a government department or any other officer or body exercising on behalf of the Crown functions conferred by an enactment". I should add, though it is not directly material, that section 274 provides that service as a member of the armed forces does not count as Crown employment, with the result that the armed forces fall altogether outside the provisions of the 1992 Act.

7

The collective consultation provisions as originally enacted replaced the substantially identical provisions of sections 99–105 of the Employment Protection Act 1975 (which also contained, at section 121, provisions equivalent to sections 273 and 274 of the current Act). As noted above, they have since been amended in various respects. The only amendments to which I need to refer for present purposes are two changes made by the Collective Redundancies and Transfer of Undertakings (Protection of Employment) (Amendment) Regulations 1995 ("the 1995 Regulations"), as follows:

(1) Under the 1975 Act, and the 1992 Act in its original form, the only employee representatives with whom employers were obliged to consult were the representatives of a recognised trade union. The result was that the provisions had no application in cases where no trade union was recognised. It was held by the ECJ in Commission of the European Communities v United Kingdom (C-383/92) [1994] ECR I-2479, [1994] ICR 664, that in that respect UK law failed to comply with the requirements of the underlying Directive (see para. 8 below); and provisions were introduced requiring employers to appoint, or arrange for the election of, "employee representatives" with whom they could consult about proposed redundancies in cases where there was no recognised trade union. The new provisions include section 188 (1B).

(2) Section 99 of the 1975 Act, and section 188 of the 1992 Act as first enacted, provided that the consultation obligations arose if even a single redundancy was proposed. That went beyond the terms of the Directive, art. 1.1 of which defines "collective redundancies" as involving a specified minimum number of employees (defined according to two alternative formulae). The Regulations amended section 188 (1) so as to incorporate one of those thresholds, i.e. at least twenty employees at one establishment over a ninety-day period.

8

The collective consultation obligations under the 1975 and 1992 Acts represent the UK's implementation of what was originally Council Directive 75/129/EEC and is now Council Directive 98/59/EEC (which consolidates the 1975 Directive and a further Directive, 92/56/EEC). As noted above, article 1.1 of the 1998 Directive defines "collective redundancies". Article 1.2 reads (so far as material):

"This Directive shall not apply to:

(a) … ;

(b) workers employed by public administrative bodies or by establishments governed by public law (or, in Member States where this concept is unknown, by equivalent bodies);

(c) …."

I will use the abbreviation "PAB" as a shorthand for both "public administrative bodies" and "establishments governed by public law" (or their "equivalents") within the meaning of article 1.2. Article 2 sets out the substantive requirements of the Directive as regards information and consultation. Article 5 reads:

"This Directive shall not affect the right of Member States to apply or to introduce laws, regulations or administrative provisions which are more favourable to workers or to promote or to allow the application of collective agreements more favourable to workers."

The 1975 and 1998 Directives are not in all respects identically worded — in particular, article 3 of the former, which is the equivalent of article 2 of the latter, was less elaborately drafted — but there are no differences which are material for present purposes. I should note specifically that the language of article 1.2 of the 1998 Directive is the same as that of article 2 of its predecessor, and that article 5 is identical in both. Save where it is necessary to distinguish, I will refer to the 1975 and 1998 Directives without differentiation as "the Directive", and to "article 1.2" to cover also article 2 of the 1975 Directive.

9

The trend of English authority until comparatively recently was to the effect that the collective redundancy provisions, even when read with the Directive, did not oblige an employer to consult about, or therefore disclose the reasons for, the underlying business decision which gave rise to a proposed collective redundancy — the paradigm case being the closure of a workplace — but only about the consequences of that decision. The leading cases were R v British Coal Corporation, ex p Vardy [1993] ICR 720; MSF v...

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