Employment

United States of America v Nolan: Court of Appeal, Civil Division: 4 February 2014

Employer’s duty to consult appropriate trade union – Failure to consult union – Employer being sovereign state in UK – Employer operating military base in England and deciding to cease operations – Employee seeking protective award – Question being referred to Court of Justice of the European Union (CJEU)

Until 2006, the United States army maintained a military facility in Hampshire where 200 civilians were employed. The employer was, as a matter of law, the United States of America. The decision was made to close the facility with the result that the employees were made redundant. The respondent employee issued proceedings in the employment tribunal (the tribunal) under section 189 of the Trade Union and Labour Relations (Consolidation) Act 1992 (the 1992 act) claiming that the employer had failed to comply with the consultation obligations contained in section 188 of the act.

The employee contended that she was entitled to bring the proceedings as an ‘employee representative’ within the meaning of section 188(1B) of the 1992 act. The tribunal upheld the employee’s claim that the employer had acted in breach of section 188 and made a 30-day protective award. The tribunal found: (i) that the employee was an employee representative; (ii) in the light of the Employment Appeal Tribunal’s (EAT) decision in UK Coal Mining Ltd v National Union of Mineworkers ([2008] IRLR 4), the consultation had been inadequate because it had not commenced prior to the closure decision and had not covered the reasons for the closure; and (iii) on the basis that the employer had not invoked the ‘special circumstances’ defence under section 188(7) of the act, it had not been unrealistic to have expected the employer, as a sovereign state, to have consulted about the closure of the facility.

The employer appealed to the EAT. It allowed and remitted the employer’s appeal on the finding of employee representative status (the tribunal subsequently affirmed its original decision and there was no appeal). The EAT dismissed the employer’s submission that, as a matter of construction, the obligations imposed by section 188 of the 1992 act should be read as excluding any obligation by an employer which was a sovereign state to consult about a decision made iure imperii, even if collective redundancies were the necessary consequence of that decision (see [2009] IRLR 923). The employer appealed.

The Court of Appeal made a reference to the Court of Justice of the European Union (CJEU) (see [2011] IRLR 40). The CJEU raised, of its own motion, the question whether a dismissal of the kind that had occurred in the instant case ‘terminating an employment relationship between a UK national and a non-member state’ fell within the scope of Council Directive (EC) 98/59 (on the approximation of the laws of the member states relating to collective redundancies) at all. The CJEU held that it did not (see [2012] IRLR 1020). The appeal was listed for a further hearing.

The employer contended that since it was clear from the decision of the CJEU that dismissals in consequence of the closure of a military base did not fall within the scope of the Directive, the collective redundancy provisions in the 1992 act should be construed as being to the same effect. Its principal submission was that the provisions of the act, on their true construction, did not apply to the case of workers employed by any public administrative body and establishment governed by public law (PAB) within the meaning of article 1.2 of the Directive.

The court ruled: the principal submission raised the question whether the relevant provisions of the 1992 act had to be construed on the basis that Parliament could not have intended to confer any rights, or impose any obligations, that had not been required by the Directive. In transposing the Directive into domestic legislation, the draftsman had made what had to have been a deliberate choice not to reproduce in terms the general exclusion contained in the Directive for PAB workers.

Instead, an exclusion had been made for ‘Crown employment’. It was clear that the concept of a PAB in Community law was wider than Crown employment. That had to have been apparent to the draftsman and there was no warrant for assuming that he nonetheless had intended, but incompetently failed, to provide for an exclusion which had precisely corresponded with that contained in the Directive.

The concept of a special employment regime for public employees recognised in some civil law countries had no equivalent in the common law. It had made perfectly good sense for Parliament to have settled for a touchstone 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 (see [23], [24], [34], [35] of the judgment).

Accordingly, the decision of the CJEU had not meant that the instant appeal would be allowed. A further hearing would be required to determine the issue that had originally led to the reference to the CJEU (see [33]-[35] of the judgment).

Litster v Forth Dry Dock and Engineering Co Ltd [1989] 1 All ER 1134 considered; Alemo-Herron v Parkwood Leisure Ltd [2010] IRLR 298 considered; Risk Management Partners Ltd v Brent London Borough Council [2011] 2 All ER 209 considered.

The employee did not appear and was not represented; John Cavanagh QC and Sir Daniel Bethlehem QC (instructed by Nabarro LLP) for the employer.