United States of America v Nolan
| Jurisdiction | England & Wales |
| Judge | Lord Mance,Lord Neuberger,Lady Hale,Lord Reed,Lord Carnwath |
| Judgment Date | 21 October 2015 |
| Neutral Citation | [2015] UKSC 63 |
| Court | Supreme Court |
| Date | 21 October 2015 |
[2015] UKSC 63
Lord Neuberger, President
Lady Hale, Deputy President
Lord Mance
Lord Reed
Lord Carnwath
Appellant
John Cavanagh QC
Sir Daniel Bethlehem KCMG QC
(Instructed by Nabarro LLP)
Respondent
The Respondent was not represented and did not appear
Intervener(Advocate to the Court)
Michael Beloff QC
Sarah Wilkinson (Instructed by The Government Legal Department)
Heard on 15 and 16 July 2015
(with whom Lord Neuberger, Lady Hale and Lord Reed agree)
In early 2006 the appellant, The United States of America, decided for strategic reasons to close the watercraft repair centre, known as RSA Hythe, which the United States Army maintained in Hampshire. The respondent, Mrs Nolan, was employed there as a civilian budget assistant, and the closure on 30 September 2006 involved her dismissal for redundancy on the previous day. She brought Employment Tribunal proceedings on 9 November 2006. The proceedings were brought under Part IV Chapter II, containing sections 188 to 198 of the Trade Union and Labour Relations (Consolidation) Act 1992 as amended by the Collective Redundancies and Transfer of Undertakings (Protection of Employment) (Amendment) Regulations 1995 (SI 1995/2587). I will call the Act as amended "TULCRA" and the Regulations by which it was amended "the 1995 Regulations".
Mrs Nolan's complaint was that the appellant as her employer had, when proposing to dismiss her and other employees, failed to consult with any employee representative as required by the procedure for handling collective redundancies prescribed by Part IV Chapter II of TULCRA. There was no trade union at the base to represent Mrs Nolan's and other employees' interests. Accordingly, she made her complaint on the basis that she was an "employee representative" within section 188(1B). The appellant accepts that it made clear in June 2006 that there would be neither discussions nor consultation about the forthcoming closure. It denies that it was under the alleged duty.
The appellant did not rely on state immunity when the proceedings were begun. It is common ground that it could successfully have done so. Whether this would have been under the State Immunity Act 1978 or at common law is presently immaterial. The 1978 Act is under section 16(2) inapplicable to "proceedings relating to anything done by or in relation to the armed forces of a state while present in the United Kingdom". Assuming that section 16(2) applies, there would have been immunity under common law principles, summarised by Lord Millett in Holland v Lampen-Wolfe [2000] 1 WLR 1573, 1583D-F. Littrell v United States of America (No 2) [1995] 1 WLR 82 is an example of a successful common law plea of state immunity; see also Sengupta v Republic of India [1983] ICR 221. As to why there was no plea of state immunity, it was not apparent at the outset that the duty to consult under section 188 would apply to the closure of a base, rather than the consequences for employees after its closure. The potential for this extended understanding of the duty was only highlighted by the Employment Appeal Tribunal decision on 28 September 2007 in UK Coal Mining Ltd v National Union of Mineworkers (Northumberland Area) [2008] ICR 163. By then, the Employment Tribunal held, it was too late for the plea of state immunity which the appellant sought at that stage to raise. The validity of the extended understanding of the duty remains open to debate notwithstanding a later Court of Justice decision in Akavan Erityisalojen Keskusliitto (AEK) ry v Fujitsu Siemens Computers Oy ( Case C-44/08) [2009] ECR I-8163, [2010] ICR 444, [2009] IRLR 944 (" Fujitsu").
Section 188 of TULCRA is in general terms. Subsection 1 provides:
(1) 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.
Subsections (2) and (3) state the aims and nature of the required consultation. Subsection (7) provides:
"(7) If in any case there are special circumstances which render it not reasonably practicable for the employer to comply with a requirement of subsections (1A), ( 2) or (4) the employer shall take all such steps towards compliance with that requirement as are reasonably practicable in those circumstances. …"
Various types of public employment are or may be taken outside the Part IV Chapter II, or outside the Act as a whole. Service as a member of the armed forces and employment which a minister certifies as required to be excepted from the Act for the purpose of safeguarding national security are taken entirely outside the Act by sections 274 and 275. Under section 273(1) to (4) the provisions of Part IV Chapter II of TULCRA have, for present purposes, no effect "in relation to Crown employment and persons in Crown employment". "Crown employment" here means "employment under or for the purposes of a government department or any officer or body exercising on behalf of the Crown functions conferred by an enactment", and "'employee' and 'contract of employment' mean a person in Crown employment and the terms of employment of such a person" subject to a presently immaterial exception. Employment as a relevant member of House of Lords or House of Commons staff is outside Part IV Chapter II under sections 277 and 278. Under section 280, the term "employee" or "worker" does not include a person in police service, defined as meaning "service as a member of any constabulary maintained by virtue of an enactment, or in any other capacity by virtue of which a person has the powers or privileges of a constable". Finally, under section 286(2) the Secretary of State may by order made by statutory instrument provide that the provisions of inter alia Part IV Chapter II shall not apply to persons or employment of such classes as the order may prescribe, or shall only apply to them with such exceptions and modifications as the order may prescribe.
Part IV Chapter II of TULCRA gives effect to the United Kingdom's duty under European Union law to implement Council Directive 98/59/EC and its predecessor Council Directive 77/187/EEC. As originally enacted, it did not do so fully, with the result that the Commission brought proceedings against the United Kingdom which led to a Court of Justice judgment dated 8 June 1994 in Case C-383/92 [1994] ECR I-2479, [1994] ICR 664. One flaw identified by the judgment was that TULCRA (and its predecessor the Employment Protection Act 1975) did not require consultation in circumstances where employees did not enjoy union representation recognised by the employer. The Court of Justice held that Council Directive 77/187/EEC required member states to ensure that employee representatives would be designated for consultation purposes in such circumstances. The 1995 Regulations make provision accordingly by amending section 188.
The Directive contains the following articles:
Definitions and scope Article 1
"1. For the purposes of this Directive:
(a) 'collective redundancies' means dismissals effected by an employer for one or more reasons not related to the individual workers concerned where, according to the choice of the member states, the number of redundancies is:
(i) either, over a period of 30 days:
- at least ten in establishments normally employing more than 20 and less than 100 workers,
- at least 10% of the number of workers in establishments normally employing at least 100 but less than 300 workers,
- at least 30 in establishments normally employing 300 workers or more,
(ii) or, over a period of 90 days, at least 20, whatever the number of workers normally employed in the establishments in question;
(b) 'workers' representatives' means the workers' representatives provided for by the laws or practices of the member states.
For the purpose of calculating the number of redundancies provided for in the first subparagraph of point (a), terminations of an employment contract which occur on the employer's initiative for one or more reasons not related to the individual workers concerned shall be assimilated to redundancies, provided that there are at least five redundancies.
2. This Directive shall not apply to:
(a) collective redundancies effected under contracts of employment concluded for limited periods of time or for specific tasks except where such redundancies take place prior to the date of expiry or the completion of such contracts;
(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) the crews of seagoing vessels.
…
Final provisions
Article 5
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."
While TULCRA in its original form (and its 1975 predecessor) failed until the 1995 Regulations properly to implement European Union law in certain respects identified in the Court of Justice's judgment in Case C-383/92 (para 6 above), in other respects they went beyond the requirements of such law. In particular:
a) they provided until the 1995 Regulations that the consultation obligations arose if even a single redundancy was proposed;
b) they provided for consultation "at the earliest opportunity" until 1995 (when this...
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