APPEARANCES
For the Appellant |
MR JOHN CAVANAGH (One of Her Majesty's Counsel) Instructed by: Messrs Nabarro Solicitors Lacon House 84 Theobald's Road London WC1X 8RW |
For the Respondent |
MR MARK MULLINS ( of Counsel) Instructed by: Messrs Rowley Ashworth Solicitors 247 The Broadway Wimbledon London SW19 1SE
|
SUMMARY
REDUNDANCY: Collective consultation and information / Protective award
An Employment Tribunal held that the USA was in breach
of
Section 188
of
the Trade Union and Labour Relations (Consolidation) Act 1992 by failing to consult representatives
of
civilian employees at a US Army Base about the reasons for its closure and by failing to start consultation in time. It made a 30 day protective award. The ET did not err in failing to construe TULR(C)A Section 188 in such a way as to impose no obligation on the US to consult employee representatives about the reason for the closure
of
the Base. Once the US had waived sovereign immunity from suit and submitted to the jurisdiction
of
the ET there was no warrant for giving a special construction to Section 188 because the closure
of
the Base was jus imperii. Since UK Coal, where the closure
of
a workplace would inevitably lead to the redundancy
of
those working there, Section 188 imposed an obligation to consult over the reason for the closure. The ET did not err in making a 30 day protective award. The claim was brought by Mrs
Nolan
as a member
of
the executive
of
the employee representative body, the LNEC. The case is remitted to the ET for determination
of
the issue
of
whether she was elected to the LNEC 'otherwise than for the purposes'
of
Section 188 and so had standing to bring a claim under Section 189 for a protective award.
THE HONOURABLE MRS JUSTICE SLADE
- The
United States of America
('US') appeals from the decisions
of
an Employment Tribunal ('ET') on liability in a judgment
of
6 February 2008 (the 'February judgment') and on remedy in a judgment
of
16 April 2009 (the 'April judgment') in proceedings for a protective award brought by Mrs Christine
Nolan
under Section 189
of
the Trade Union and Labour Relations (Consolidation) Act 1992 ('TULRCA'). John Cavanagh QC on behalf
of
the US and Mark Mullins on behalf
of
Mrs
Nolan
agree that at the hearing on remedy the ET to some extent reopened the issue
of
liability.
- Mrs
Nolan
brought proceedings against the US alleging breach
of
its obligations under Section 188 TULRCA to consult the Local National Executive Council ('LNEC') about the proposed redundancies
of
about 200 staff. The LNEC represented locally employed civilians at the US Army Base known as RSA Hythe.
- The hearing on liability took place on 11 June 2007 and judgment was entered in the Register on 6 February 2008. The ET held that the US was in breach
of
its obligations to consult in accordance with Section 188 in the respects summarised in paragraph 68 the February judgment as modified in paragraphs 60 and 61
of
the April judgment. The ET held that :
(1) Consultation did not start until 5 June 2006. There appeared to have been no impediment to starting the consultation process immediately after the UK Government had been notified on 9 May 2006 that the Base was to close. Indeed the date
of
notification to HMG was well after a decision to close the base had been made. Consultation did not start in good time.
(2) The USA failed to consult staff representatives about the reasons for the closure
of
the Base. The LNEC was told that the RSA would close and that there could be no consultation on that subject.
- The remedies hearing took place on 17 March 2008 and judgment was entered in the Register on 14 April 2008. The ET made a protective award for a protected period
of
30 days.
The issues on appeal
- John Cavanagh QC on behalf
of
the Appellant stated that this appeal gives rise to the following issues:
(1) Whether the ET erred in law in holding that a foreign sovereign government has an obligation, in advance
of
a decision to close a military base, to consult with and provide information to the civilian workforce about the reasons for its closure.
(2) Whether the ET erred in law in finding that Mrs
Nolan
was an 'employee representative' for the purposes
of
Sections 188 and 189
of
TULRCA such that she had authority to make a claim for a protective award on behalf
of
herself and the other civilian employees.
- The cross-appeal by which it was contended that the ET erred in failing to hold that the US was obliged to complete a 90 day consultation before issuing notices
of
dismissal is no longer being pursued.
The facts
- This summary
of
the facts is taken from the findings
of
fact in the February judgment.
- Mrs
Nolan
was employed at a US Army Base at Hythe Hampshire (the 'Base'). The activity carried on at the Base was the repair
of
watercraft and other equipment. The US army referred to the Base as a Reserved Storage Activity ('RSA'). About 200 civilians were employed at the Base. Civilian staff at the RSA were represented by the LNEC.
- Since at least early 2004 consideration had been given to the closure
of
the Base and in early 2006 an audit was carried out. This resulted in a report entitled 'Acquisition Strategy for Sustainment
of
APS Watercraft Assets' which was presented to the Commander
of
RSA's higher headquarters located at Rock Island, Illinois, USA. It was clear from the report that a decision had already been taken to cease operations at the Base. The strategic decision to close the Base was made in the US and the formal decision on the termination
of
employment was made by HQ USAREUR Office
of
the Deputy Chief
of
Staff in Germany.
- On 21 April 2006 there was a BBC news item concerning the closure
of
the Base.
- On 24 April 2006, the Commanding Officer
of
the Base, Colonel Binder, called a workforce meeting in the Hanger at the Base to inform the workforce about the closure and to apologise for the way in which the news had been made public.
- After the workforce meeting concluded, the Chairman
of
the LNEC convened an ad hoc meeting
of
members. This was attended by about half
of
the workforce. The ET observed at paragraph 29 that 'Mrs
Nolan
had put herself to the fore in matters related to the closure.' On a show
of
hands Mrs
Nolan
was elected onto the LNEC.
- As it was obliged to do, on 9 May 2006 the US notified the Ministry
of
Defence that operations at the Base would cease and the US facilities at Hythe would be returned to the UK on 30 September 2006.
- Consultation with the LNEC in accordance with Section 188 TULRCA commenced on 5 June 2006.
- A memorandum prepared for the LNEC committee members and given to them in June stated that all employees employed at the RSA would be made redundant. It was proposed to issue all notices simultaneously on or about 30 June 2006 with the effective date
of
termination being 29 September 2006.
- The decision to close the Base was made by the Secretary
of
the US Army and was approved by the
United States
Secretary
of
Defense.
The Statutory provisions
Trade Union and Labour Relations (Consolidation) Act 1992
"188 Duty
of
employer to consult … representatives
(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.
(1A) The consultation shall begin in good time and in any event-
a) where the employer is proposing to dismiss 100 or more employees as mentioned in subsection (1), at least 90 days, and
b) otherwise, at least 30 days,
before the first
of
the dismissals take effect.
(1B) For the purposes
of
this section the appropriate representatives
of
any affected employees are-
a) if the employees are
of
a description in respect
of
which an independent trade union is recognised by their employer, representatives
of
the trade union, or
b) in any other case, whichever
of
the following employee representatives the employer chooses:-
i) employee representatives appointed or elected by the affected employees otherwise than for the purposes
of
this section, who (having regard to the purposes for and the method by which they were appointed or elected) have authority from those employees to receive information and to be consulted about the proposed dismissals on their behalf;
ii) …….
(2) The consultation shall include consultation about ways
of
-
a) avoiding the dismissals,
b) reducing the number
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.
…
(4) For the purposes
of
the consultation the employer shall disclose in writing to the appropriate representatives-
a) the reasons for his proposals
…
(7) 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.
189 Complaint … and protective award
(1) Where an employer has failed to comply with a requirement
of
section 188 or section 188A, a complaint may be presented to an employment tribunal on that ground-
…
b) in the case
of
any other failure relating to employee representatives, by any
of
the employee representatives to whom the failure related.
273 Crown Employment
(2)The following provisions are excepted from subsection (1)-
[section 87(4)(b) (power
of
tribunal] to make order in respect
of
employer's failure to comply with duties as to union contributions);
sections 184 and 185 (remedy for failure to comply with declaration as to disclosure
of
information);
Chapter II
of
Part IV {procedure for handling redundancies)."
Council Directive 98/59
"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 10 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;
2. This Directive shall not apply to-
…
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);
Article 2
1. Where an employer is contemplating collective redundancies, he shall begin consultations with the workers' representatives in good time with a view to reaching an agreement.
4. The obligations laid down in paragraphs 1, 2 and 3 shall apply irrespective
of
whether the decision regarding collective redundancies is being taken by the employer or by an undertaking controlling the employer.
Article 5
This Directive shall not affect the right
of
Member
States
to apply or 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."
State
Immunity Act 1978
"4 Contracts
of
Employment
(1) A
State
is not immune as respects proceedings relating to a contract
of
employment between the
State
and an individual where the contract was made in the
United
Kingdom or the work is to be wholly or partly performed there.
(6) In this section "proceedings relating to a contract
of
employment" includes proceedings between the parties to such a contract in respect
of
any statutory rights or duties to which they are entitled or subject as employer or employee.
…
16 Excluded matters
(2) This part
of
this Act does not apply to proceedings relating to anything done by or in relation to the armed forces
of
a
State
while present in the
United
Kingdom and, in particular, has effect subject to the Visiting Forces Act 1952."
The Decisions
of
the Employment Tribunal
The February Judgment
- The ET recorded in paragraph 36 that it was common ground between the parties that the appropriate representatives for the purposes
of
consultation under Section 188 were the members
of
the Local National Employee Council ('LNEC'). It directed itself to determine whether Mrs
Nolan
was such a member and if so whether she could bring a claim.
- The ET rejected a submission made by Mr James on behalf
of
the US that Mrs
Nolan
had not been duly elected to the LNEC. The ET held:
"32. We have no evidence that Mrs
Nolan
's election was contrary to any rules
of
procedure or that it was not effective.
33. Mrs
Nolan
's evidence has not been challenged nor does it come in a factual matrix which causes us to consider it to be unlikely and therefore we find that from 24th April 2006, she was a member
of
the LNEC."
- The ET rejected the argument advanced on behalf
of
the US that because there was no evidence that the LNEC authorised Mrs
Nolan
to bring proceedings for a protective award it had no jurisdiction to entertain the claim. The ET considered Northgate
v
Mercy [2008] IRLR 222 in which Maurice Kay LJ held at paragraph 15:
"However, where employee representatives are appropriately in place, as they are conceded to have been in the present case, a complaint about a failure relating to them is susceptible to challenge only by them or one
of
them. …I accept the submission … on behalf
of
Northgate, that section 189(1) is a carefully devised provision defining and restricting standing to bring a complaint and that where, as here, the complaint is as to breach
of
the obligation to provide information to appropriate employee representatives, such a complaint can only be presented by 'any
of
the employee representatives to whom the failure related'."
- The ET concluded:
"43. …that if one representative brings a claim then as is said in paragraph 15, it becomes a collective claim. Mr James has suggested we should find that the evidence means that the proceedings have positively not been authorised by the LNEC and collectively they did not want these proceedings.
44. What we are satisfied is that there is certainly no evidence to say they have approved
of
these proceedings but we reject the submission that the absence
of
such expressed or indeed implied authority prevents this claim being brought."
- As for the substance
of
the consultation, the ET held:
"54. In this case the so called consultation did not begin until 5 June 2006. At the time
of
the consultation as we have noted it was not open to the LNEC to have a meaningful consultation as to the closure
of
the base which meant it was not in reality possible to have a meaningful consultation about avoiding dismissals en masse.
55. Section 188(2) TULR required the consultation to include consultation about avoiding the dismissals. The restraints imposed by the respondent as to what could be discussed meant in our view there was no possibility
of
having proper consultations within the meaning
of
s.188.
…
63. Section 188(2) TULR requires the consultation to include consultation about avoiding the dismissals. The restraints imposed by the Respondent as to what could be discussed meant in our view that there was no possibility
of
having fully meaningful consultations in accordance with s.188 TULR about avoiding dismissals."
- The ET observed in paragraphs 66 and 67 that the judgment
of
the Employment Appeal Tribunal ('EAT') in UK Coal Mining [2008] ICR 163, promulgated after the hearing in June 2007, reinforced its view that where closure
of
a workplace and dismissals are inextricably interlinked, an employer had a duty under Section 188 to consult over the reasons for the closure.
- The ET held at paragraph 60:
"60. In our view, once the so called strategic decision to close the base had been made, the issue
of
termination notices does not represent a separate decision to dismiss but rather the processing
of
the inevitable consequences. Initially, Mr Schoenstein said it was the Base Commanding Officer who made the decision to dismiss and it then became clear he did so under the direction
of
HQ USARUER office
of
the Deputy Chief
of
Staff in Germany. The Deputy Chief
of
Staff was faced with dealing with the overall consequences
of
closure."
Thus UK Coal applied to the decision to close the Base.
- At the February hearing an argument was advanced on behalf
of
the US that because the strategic decision to close the base had been taken in the US it was unrealistic to consider there should be consultation and an input into that decision. Mr James quoted instances
of
troop movements, for example in Afghanistan. The ET enquired
of
Mr James whether in this regard he wished to rely on the special circumstances defence in Section 189(7) TULRCA. He stated that he did not.
- The ET made the following findings in relation to the timing
of
the consultation which took place:
"56. In any event there was no evidence as to why there was a delay either from a date prior to 13 March 2006 or from the public announcement
of
9 May 2006 until 5 June 2006 to begin the so called consultations. It was submitted by Mr James that the treaty obligations to which we had referred somehow restricted the employer from engaging in consultation. The letter
of
9 May 2006 refers to the formal notification to cease operations. Mr Schoenstein said that the Respondent was obliged to notify HM Government
of
intentions to vacate any premises prior to making any public notification
of
those intentions.
57. That obligation does not appear to us to impede discussions having taken place in April 2006 if not earlier with the representatives
of
the workforce since quite early a decision to close had been taken and at the very least, notification could have been given to the Government earlier than it was. In any event it is clear that the MOD police who we presume provide a security facility at the base were notified in April in any event.
…
62. It is clear to us that sometime prior to 13th March 2006, a decision at a sufficiently high level had been made by the Respondent to close the RSA. The inevitable consequence
of
that decision was that almost all, if not all the civilian employers there, would be dismissed having regard to the withdrawal by the US Forces from their UK bases. There was a possibility that some arrangements could be made for avoiding a small number
of
redundancies. In the circumstances
of
this case, a decision to close the RSA was a decision to dismiss most, if not all the employees and certainly meant the Respondent was 'proposing to dismiss'. The consultations as described did not begin until 5th June 2006. At the time
of
the consultations, we have noted it was not open to the LNEC to have a meaningful consultation as to the closure
of
the base which meant it was not in reality possible to have a meaningful consultation about avoiding mass dismissals.
…
64. In any event, there was no evidence as to why there was delay in commencing consultation either from a date prior to 13th March 2006 or from 24th April 2006 or from a public announcement
of
9th May 2006 until 5th June 2006 when the formal consultation began. It was submitted by Mr James that the treaty obligations to which we have referred somehow restricted the employer from engaging in consultations. The letter
of
9th May 2006 refers to the formal notification to cease operations. Mr Schoenstein said that the Respondent was obliged to notify HM Government
of
intentions to vacate any premises prior to making any public notification
of
those intentions.
65. That obligation does not appear to us to impede discussions having taken place in April 2006, if not earlier, with the representatives
of
the workforce since quite clearly at the very least, notification could have been given to the Government earlier than it was. In any event, it is clear the MOD Police who we presume provide a security facility to the base were notified in April, [in any event]."
- The ET concluded that the US were in breach
of
Section 188 in the following respects:
"68.1 The notices to the workforce were issued on 30th June 2006 and consultation did not start until 5th June 2006 which is far short
of
the 90 day period.
68.2 The LNEC was told that the RSA would close and that there could be no discussions about such closure and as a result there was no consultation on that subject."
- It was implicit from paragraph 68.1
of
the February judgment that the ET was
of
the view that Section 188 required 90 days
of
consultation to have taken place before notices
of
dismissal could be issued. In the April judgment the ET corrected this basis for its decision.
The April Judgment
- The ET conducted a further hearing to consider remedy.
- As stated above the ET corrected paragraph 68.1
of
its February judgment. On reconsideration it held at paragraph 53 that:
"in accord with UK Coal the consultation process must be finished before any notices are issued which is not the same thing as saying that consultation must last for ninety days."
- A few days before the remedies hearing, Mr James on behalf
of
the US submitted a revised skeleton argument in which he raised the issue
of
whether on grounds
of
sovereign immunity the ET had jurisdiction to make a protective award in this case and if so whether it should do so.
- As was recorded in paragraph 31 it was not in dispute that the US had submitted to the jurisdiction
of
the ET and had waived immunity to that extent.
- The ET held at paragraph 33 that there being a submission to the jurisdiction
of
the ET, it was empowered to determine the matters before it.
- In considering
state
immunity and the power to make a protective award, the ET agreed that submission to jurisdiction by waiver is not the same thing as waiving any rights to immunity from enforcement. The ET considered the submissions made by Mr James that the ET could not make a protective award against the US. In support
of
the contention that the US had immunity from the making
of
such an award Mr James relied on Article 24
of
the UN Convention on Jurisdictional Immunities
of States
and their Property. The ET noted that the Convention was not in force, had not been incorporated into English law and deals with enforcement
of
court orders, in particular immunity from the imposition
of
any fine or penalty. The ET also referred to The Law
of State
Immunity by Lady Fox at page 369 to similar effect.
- The ET concluded that whilst the US is immune from measures to enforce an order
of
the court, no principle
of
customary international law prevents an award
of
penal damages against a
state
for breach
of
English domestic law. There is no appeal against this conclusion.
- Under the heading 'Should there be a protective award' the ET quoted an extract from Mr James' skeleton argument.
"41. At para C 1 (k)
of
his skeleton argument Mr James submitted that In this case, a distinction must be drawn between imposing an obligation upon the
United States
to consult concerning the consequences
of
a pending base closure and an obligation to consult over the decision to close the installation. Consultation over the consequences
of
base closure might include determining seniority for award
of
severance payments, or determining whether re-employment elsewhere is [a] possibility. In contrast, to the extent that case law is now interpreted as imposing an obligation to consult on the decision to close the base, it infringes upon the
United States
jure imperii decision-making authority. The
United States
has the sovereign prerogative to determine the organization and structure
of
its military forces, and in coordination with its NATO partners, to establish or close military installations. The obligation to consult cannot infringe upon a
State
's sovereign prerogative to close a military installation."
- Having considered Littrell
v
USA (No 2) [1995] 1 WLR 82 and an article by Richard Garnett entitled
State
Immunity in Employment Matters which the ET drew to the attention
of
the parties, the ET held that the jus imperii nature
of
the closure
of
the Base may be relevant in determining the amount
of
any protective award. However, the US having waived immunity from suit the ET would have to apply English domestic law. There is no appeal from this conclusion.
- The ET held at paragraph 44:
"We consider that closure was an exercise
of
jure imperii but this
of
itself is not a reason for not making a protective award."
- An argument was advanced by Mr James that a reasonable employer before the decision in UK Coal would conclude that there was no obligation to consult under Section 188 in relation to the closure
of
the Base. That argument was not pursued before us although Mr Cavanagh used it in aid
of
his construction argument. Mr Cavanagh stated that he was not contending that UK Coal was wrongly decided.
- In considering the exercise
of
discretion to make a protective award the ET directed itself in accordance with paragraph 45
of
the decision in Susie Radin Ltd
v
GMB and others [2004] ICR 893.
- As for the timing
of
the commencement
of
consultation the ET took into account the evidence that the workforce was informed on 24 April 2006 that the base was to close but consultation did not begin until 5 June 2006. The ET held:
'51. …Mr James argues that the announcement to the workforce was made because there had been an unauthorised leak
of
discussions between the
United States
and HMG and that having regard to the treaty obligations between the two countries it would not have been possible to have commended any form
of
consultation until the UK government was formally informed
of
the decision to close the base. This decision was communicated to the UK government as we have previously noted on 9 May 2006, which
of
itself does not explain the delay between 9 May 2006 and 5 June 2006 let alone any delay from when the decision to close the base was made let alone any delay from the time when the preliminary proposal to close the base was formulated.'
- The ET held that any argument based on the Treaty obligations
of
the US failed for a number
of
reasons. The contention that Treaty obligations prevented the US from starting consultations earlier was in effect an argument that it was not reasonably practicable to consult within the meaning
of
Section 188(7) TULRCA. However at the liability hearing Mr James had made it clear that he was not relying on that provision. Secondly an argument that there can be no consultation about a proposal to close the Base before telling a third party
of
the decision to close confuses the difference between a proposal and a decision. Finally the ET considered that the Treaty was not relevant because it had not been confirmed by domestic enactment.
- The reasoning
of
the ET in making a protective award
of
30 days is set out in paragraphs 58 to 62
of
the April judgment.
"58. This is not the case where there has been a total failure to consult and on that basis therefore it would not be right to make a maximum award
of
90 days. We do not consider it would either be right to make no award. We note that in the UK Coal case it was in fact a maximum award although the Employment Tribunal in that case were very critical
of
the underhand or deceitful behaviour
of
the employers.
59. In this case the employers were not being underhand or deceitful but they were expressly ruling out any consultation on the reasons for closure
of
the base. The Reasons noted at paragraph 21.1 that the Respondent has stated that closure
of
the RSA would lead to all employees being affected.
60. On any view
of
the matter there appears to be no impediment to having started a consultation process almost immediately after HMG had been notified on 9 May 2006. The process
of
consultation did not start until 5 June 2006. Indeed this period is still well after a decision to close the base had been made.
61. Taking account
of
both the delay in any consultation and
of
the failure to consult on the reasons for closure we think it reasonable and proper to reduce the award from 90 days, which must be the starting point in considering any protective award, to one
of
30 days.
62. Accordingly exercising our discretion we make an award
of
30 days which will commence from 29 September 2006, being the effective date
of
dismissal
of
the first employees, and it will apply to all UK nationals who were civilian employees at the base on the 29 June 2006 (this class
of
employees being those represented by the LNEC)."
The Grounds
of
Appeal
The First Ground
The ET erred in failing to have regard to the fact that reason for the closure
of
the Base engaged jus imperii.
- The following matters were agreed between the parties.
(1) The decision to close the Base was a strategic military decision
of
a sovereign or governmental nature which was jus imperii. The ET so held at paragraph 44
of
the April judgment.
(2) By reason
of
Section 16(2)
of
the SIA, the common law
of
statutory immunity and not the SIA applied to the decision to close the Base..
(3) The US could have claimed statutory immunity from the claim under Section 188 TULRCA and the ET so held.
(4) The US did not claim
state
immunity and submitted to the jurisdiction
of
the ET.
(5) The US did not consult employee representatives about the reason for the closure
of
the Base.
The contentions
of
the parties
The contentions
of
the Appellants
Did the ET err in failing to have regard to jus imperii in determining liability and remedy?
Liability
- Mr Cavanagh developed sophisticated and detailed arguments on the effect
of
jus imperii on the liability under TULRCA Section 188
of
the US to consult appropriate representatives on the reason for the closure
of
the Base. He contended that since the reason for the closure
of
the Base was a classic example
of
the exercise
of
an act
of state
, Section 188 should be construed in such a way as to impose no obligation on the US to consult on the reason for the closure
of
the Base (the 'construction point'). Thus the ET erred in holding the US to be in breach
of
its obligations under Section 188 in this regard.
- There is an issue between the parties as to whether the US took the construction point before the ET. Mr Cavanagh contended that there was no clear delineation
of
decision making by the ET by which liability was assigned to the February judgment and remedy to the April judgment. It was clear that jus imperii was raised at the second hearing. Mr Mullins pointed out that there was no mention
of
jus imperii at the first hearing but that there was to some extent a reopening
of
liability in the second hearing. He fairly recognised that he was in some difficulty in raising the technical point that the argument on statutory construction based on jus imperii was not taken below. He did not raise an objection to the construction point now being taken on appeal.
- As a secondary, fallback position Mr Cavanagh contended that the ET erred in failing to take into account the fact that the decision to close the Base was an act
of state
in exercising its discretion to make a protective award. This argument is considered in the section on remedy below.
- Mr Cavanagh helpfully made his position on the following matters clear:
(1) The appeal turns on a point
of
pure statutory construction.
(2) Absent a different construction
of
Section 188 TULRCA, the principle in UK Coal that where the closure
of
a workplace leads inevitably to redundancies the employer is obliged to consult about the reason for the closure was applicable to this case.
(3) The US did not contend that UK Coal was wrongly decided.
(4) There is no case law or academic article
of
which Mr Cavanagh is aware which uses jus imperii as an aid to the construction
of
a statute.
(5) The US did not contend that other provisions
of
Section 188 did not apply to the US. It was only the requirement to consult about the reason for the dismissals which was challenged.
(6) Jus imperii does not prevent the making
of
a protective award.
(7) The protective award
of
30 days is not challenged as perverse.
- Mr Cavanagh contended that well established principles
of
statutory construction support the argument that where a decision to close a workplace was jus imperii, Section 188 TULRCA should be construed so that the employer is not obliged to consult about the reason for the decision. An interpretation
of
a statute should not be adopted if it leads to an absurd or wholly unreasonable result, unless the statutory language compels such an interpretation. It is said that in the present case it does not. Further, it was said that domestic legislation which, as here, implements a European Commission Directive must be interpreted, if it is possible to do so, in light
of
the wording and purpose
of
the Directive. It was also contended that the interpretation
of
Section 188 should take account
of
the domestic statutory framework and the legal background.
- Paragraph 65
of
his skeleton argument set out the application
of
those canons
of
construction for which he contended.
"65. Applying the canons
of
construction to the issue presently under consideration:
a) The idea that a sovereign
state
has a duty to consult with the civilian workforce prior to taking a high-level strategic military decision to close a military Base is unreasonable, absurd and, indeed, dangerous;
b) Moreover, it would run counter to a very well-established principle that underpins the doctrine
of state
immunity both at common law and under customary international law, namely the principle that courts will not scrutinise or interfere with decisions that are jus imperii, i.e. that are
of
a sovereign or governmental nature;
c) Again, such an interpretation
of
s.188 would be contrary to the wording and the purpose
of
the Collective Redundancies Directive;
d) In addition, the interpretation would be inconsistent with the domestic statutory framework as set out in TULRCA; and
e) There is no difficulty with interpreting s.188 in accordance with the construction advanced by the US, and so in a matter that is consistent with common sense, common law and customary international law, the Directive, and the domestic statutory framework."
- Mr Cavanagh submitted that when construing a statutory provision that is not clear on its face, a court or tribunal should strive to avoid an interpretation which would lead to absurd or unreasonable results. He relied on the dictum
of
Lord Millett in R (on the application
of
Edison First Power Ltd)
v
Central Valuation Officer and another [2003] UKHL 20 at paragraphs 116 and 117 that:
"116 ...The courts will presume that Parliament did not intend a statute to have consequences which are objectionable or undesirable; or absurd; or unworkable or impracticable; or merely inconvenient; or anomalous or illogical; or futile or pointless.
117. But the strength
of
these presumptions depends on the degree to which a particular construction produces an unreasonable result. The more unreasonable the result, the less likely that Parliament intended it … ."
- It was said that it would be absurd if Section 188 were construed so as to require foreign
states
to inform and consult with employee representatives over the reason for the closure
of
a military base. It was submitted that the grave threat to security resulting from an obligation to conduct such a consultation and information process is too obvious to require elaboration. Section 188 should be construed so as to avoid such a result. Further he submitted that the decision to close the Base was not one which was susceptible to consultation with a view to reaching agreement with employee representatives.
- Further, it was said that the interpretation
of
Section 188 in such a way as to require consultation by a
state
before it takes a decision
of
a sovereign nature strikes at the very heart
of
the principle, recognised in common law, by statue, by international convention and in the customary law
of
nations, that the courts
of
one
state
should not scrutinise or interfere with the jus imperii, sovereign or governmental decisions
of
another
state
. Reference was made to the judgment
of
the House
of
Lords in Holland
v
Lampen-Wolfe [2000] 1 WLR 1753 in which Lord Millett said at 1583 D-F:
"It is an established rule
of
customary international law that one
state
cannot be sued in the courts
of
another for acts performed jure imperii. The immunity… operates to prevent the official and governmental acts
of
one
state
from being called into question in proceedings before the courts
of
another. The existence
of
the doctrine is confirmed by the European Convention on
State
Immunity (1972) (Cmnd 5081), the relevant provisions
of
which are generally regarded as reflecting customary international law. In according immunity from suit before the English courts to foreign
states
the
State
Immunity Act 1978 and the common law give effect to the international obligations
of
the
United
Kingdom."
- Mr Cavanagh referred to Littrell
v
USA (No 2) [1995] 1 WLR 82 in which Hoffman LJ observed that the maintenance by the
United States of
a unit
of
the
United States
Air Force in the
United
Kingdom was as imperial an activity as could be imagined. In Sengupta
v
Republic
of
India [1983] ICR 221 the Employment Appeal Tribunal ('EAT') held that the doctrine
of
sovereign immunity applied to a decision
of
a foreign
state
to terminate the contract
of
employment
of
an employee engaged in the discharge by the foreign
state of
its sovereign functions. Accordingly an ET had no jurisdiction to hear the claim for unfair dismissal brought by the employee.
- Mr Cavanagh contended in his skeleton argument that:
"The ET's interpretation
of
s188 assumes that the UK Parliament has enacted a provision which (a) imposes a legal requirement upon
states
to include foreign civilians in the decision-making process leading up to decisions
of
the most sensitive and sovereign nature possible and which then (b) makes the
state
's decision making process subject to the scrutiny
of
the UK tribunals. Moreover, the ET's interpretation is not based upon clear words
of
s188 (because there are no clear words compelling such an interpretation), but is based upon an inference that the ET chose to draw from vague and general statutory language."
- The US alleged that the ET erred in holding that the jus imperii nature
of
the decision to close the base was relevant to the US's right to claim statutory immunity but not to the question whether there had been a breach
of
Section 188 or whether a protective award should be made. It was said that the ET had failed to distinguish the question
of
ouster
of
jurisdiction by reason
of
a claim
of state
immunity and arguments about the effect
of
jus imperii on the construction
of
Section 188. Mr Cavanagh contended that jus imperii is relevant to the obligation to consult about the decision to close the Base and is unaffected by the decision not to assert
state
immunity in relation to Mrs
Nolan
's claim.
- Mr Cavanagh relied on Article 1(2)(b)
of
the Directive to support an argument that the exclusion
of
'workers employed by public administrative bodies or by establishments governed by public law' indicates that it was not the intention
of
the Directive that decisions
of
a public policy nature should be subject to a requirement to consult the workforce which will be affected by them. He contended that there is no indication in the Directive that it requires consultation about closure
of
a sovereign
state
's military bases. Section 188 must be construed, so far as possible, in accordance with the wording and purpose
of
the Directive.
- Further Mr Cavanagh contended that Section 188 must be construed in its domestic statutory context. Section 273(2) TULRCA provides that the duty to inform and consult under Section 188 does not apply to those in Crown employment. It was said that it would be astonishing if the effect
of
Section 188 were to compel a foreign
state
's military authorities to consult with foreign civilians in advance
of
the closure
of
a military base when it does not require the British military authorities to consult with their own nationals in similar circumstances.
- Mr Cavanagh submitted that before the judgment
of
the Employment Appeal Tribunal ('EAT') in UK Coal it was the generally held view that Section 188 did not require consultation about the reason for the closure
of
the operation but about its consequences for staff. Reference was made to R
v
British Coal Corporation ex parte Vardy [1993] ICR 720, Middlesborough Borough Council
v
TGWU [2002] IRLR 332 paragraphs 27 and 45 and Securicor Omega Express
v
GMB [2004] IRLR 9 paragraphs 22 and 31-33.
- Whilst Mr Cavanagh recognised that Elias P took a different approach in UK Coal from that taken in the earlier cases, he sought to distinguish it. The EAT in that case was concerned with a commercial decision whether to close a site not with a decision that involved public policy, let alone one that concerned jus imperii.
Remedy
- Mr Cavanagh on behalf
of
the US did not seek to argue on this appeal that a protective award should not have been made because it is penal in nature.
- If the US were not to succeed in its argument that Section 188 did not impose an obligation on it to consult with employee representatives about the reasons for the closure
of
the Base, it adopted the fallback position that the ET erred in failing to take into account considerations
of
jus imperii and the nature
of
the decision giving rise to the redundancies in deciding whether to and if so
of
what length to make a protective award.
- Mr Cavanagh referred to the discretion afforded to the ET by Section 189(2) as to whether to make a protective award where it finds a complaint under Section 188 well founded. He also referred to Section 189(4)(b) which provides that if a protective award is to be made, the protective period
"(b) is
of
such length as the tribunal determines to be just and equitable in all the circumstances having regard to the seriousness
of
the employer's default in complying with the requirements
of
section 188."
- Mr Cavanagh contended that by reason
of
the nature
of
the reason for the closure
of
the Base, the failure to consult over it should not have attracted a protective award. Further, this reason 'infected' the decision
of
the ET on the delay which it found had taken place before consultation started and therefore that basis for its award.
Was Mrs
Nolan
was an appropriate representative for the purposes
of
Section 188?
- Mr Cavanagh contended that the ET erred in holding that Mrs
Nolan
was an appropriate representative
of
civilian employees at the Base. He submitted that she was not 'appointed or elected otherwise than for the purposes …'
of
Section 188 and thus did not satisfy the requirements
of
Section 188(1B)(b). He said that there is no authority on the meaning
of
Section 188(1B)(b).
- It was not contended on behalf
of
the US before us that if elected or appointed otherwise than for the purposes
of
Section 188, Mrs
Nolan
needed formal authority from the LNEC to bring a Section 188 claim.
- Mr Cavanagh submitted that the key question was the purpose
of
Mrs
Nolan
's election to the LNEC.
- It was contended on behalf
of
the US that in light
of
the fact that Mrs
Nolan
was elected at a meeting
of
the LNEC following the announcement
of
redundancies by Colonel Binder, she was elected specifically to deal with the redundancy process. It was said that by the time she was elected there was nothing to consult about except the redundancy process. Therefore Mrs
Nolan
. was not elected with a wide remit to deal with the full range
of
employee relations matters. Accordingly she was not elected 'other than for the purposes
of
Section 188' and had no standing to be consulted under Section 188 or to bring a claim under Section 189.
Submissions on behalf
of
Mrs
Nolan
Did the ET err in failing to have regard to jus imperii in determining liability and remedy?
Liability
- Mr Mullins on behalf
of
Mrs
Nolan
contended that there was no error
of
law in the conclusion
of
the ET that the US was in breach
of
its obligation under Section 188 in failing to consult employee representatives over the reasons for the closure
of
the Base.
- The parties and the ET agreed that the decision to close the Base was jus imperii. All agreed that the US could have but did not claim
state
immunity from suit in relation to the claim for breach
of
Section 188.
- Dealing with the various bases for the submission on behalf
of
the US that Section 188 should be construed so as not to require consultation over the reason for the closure
of
the Base, Mr Mullins contended that no special construction
of
Section 188 is needed to avoid absurdity. There were two 'escape routes' which were available to the US to avoid the jus imperii reasons for the decision
of
the US to close the Base being subject to scrutiny in the English Tribunals and courts. The US undoubtedly could have claimed immunity from suit in respect
of
the Section 189 proceedings. Secondly, Section 188(7) provides a defence to liability under Section 189 where there are special circumstances rendering it not reasonably practicable for the employer to comply with a requirement
of
Section 188 (1A)(2) or (4). The US did not avail itself
of
either route available to it to avoid the failure to consult over the reasons for its decision to close the Base being called into question in an ET.
- Reliance was placed by the US on Article 1(2)(b)
of
the Directive to contend that it was not contemplated that there should be consultation with employee representatives over redundancy decisions
of
public bodies. Mr Mullins pointed out that the provisions
of
the Directive are a floor not a ceiling. Article 5 makes it clear that Member
States
may apply or introduce laws, regulations or administrative provisions which are more favourable to workers than those in the Directive. The UK has done this. Section 188 applies to employees referred to in Article 1(2)(b)
of
the Directive. The Article permits but does not require Member
States
to exclude such employees from the scope
of
the Directive. There is nothing inconsistent with the Directive in construing Section 188 as requiring consultation about the reasons for a decision
of
a public body where it will lead to the closure
of
an establishment and the redundancy
of
employees working there, even if that decision is jus imperii.
- Mr Mullins contended that domestic statutory context
of
Section 188 does not lead to the restrictive construction contended for by Mr Cavanagh. A construction
of
Section 188 to exclude a requirement on a foreign
state
to consult about the reasons for the closure
of
an establishment where that is jus imperii is not necessary to avoid inconsistency with the exclusion
of
the Crown from such scrutiny by Section 273(2). The common law
of state
immunity which applies to foreign powers is compatible with Section 188 and allows for exemption from scrutiny for breach where
state
immunity is claimed.
Remedy
- As for the fallback position
of
the Appellant that the ET erred in failing to have regard to the fact that the decision to close the Base was jus imperii in deciding whether to and if so for what period to make a protective award, Mr Mullins contended that there are no grounds for criticising the exercise by the ET
of
its discretion to make a protective award or its decision as to the length
of
the protected period.
Was Mrs
Nolan
an appropriate representative for the purposes
of
Section 188?
- Mr Mullins contended that there was no challenge to the competence
of
the LNEC to act as the appropriate representatives
of
the workforce. It appeared that there was evidence before the ET that there was a gap on the LNEC which was filled by the election
of
Mrs
Nolan
. Mr Mullins contended that the ET was entitled to conclude that Mrs
Nolan
had been properly elected to and became a member
of
the LNEC.
- Mr Mullins fairly observed that the way in which the ET dealt with the standing
of
Mr
Nolan
to bring a claim under Section 188 in paragraphs 30 to 33
of
the February judgment was 'not most helpful'.
Discussion
Did the ET err in failing to have regard to jus imperii in determining liability and remedy?
Liability
76. Without disrespect to the sophisticated and imaginative arguments advanced by Mr Cavanagh in support
of
the proposition that Section 188 should be construed in the light
of
the jus imperii nature
of
the decision the reasons for which the ET held that there should have been consultation with employee representatives, we are not persuaded by them.
- As Mr Cavanagh pointed out in Paragraph 65(b)
of
his skeleton argument, the principle that underpins the doctrine
of state
immunity both at common law and under customary international law is that courts will not scrutinise or interfere with decisions that are jus imperii, namely that are
of
a sovereign nature. The principle thus affects the jurisdiction
of
the courts to scrutinise or interfere with such decisions. No authority or learned article was placed before us which establishes or even suggests that the jus imperii nature
of
an act affects not the jurisdiction
of
the courts in relation to that act but the construction
of
a statute or approach to a rule
of
law
of
which is engaged by that act.
- Mr Cavanagh relied upon the doctrine that an interpretation
of
statutory language should not be adopted if it leads to an absurd or wholly unreasonable result. In this regard he relied on the dictum
of
Lord Millett in Edison First Power Ltd [2003] 4 All ER 209 at paragraphs 116-117.
- The absurdity relied upon by the US in its construction argument is the prospect
of
a failure by a foreign
state
to consult about reasons for the closure
of
a military base being made the subject
of
scrutiny by an ET in a claim for breach
of
Section 188.
- We agree that consultation with employee representatives in advance
of
a decision to close a military base would be likely to give rise to justified concern about security. Further, we accept that a requirement to consult 'with a view to reaching agreement' on reasons for closure would sit uneasily with decision making at the highest level
of
a foreign government and which engages high level military, political and economic considerations.
- Further it may have been possible for the US to establish a defence under Section 188(7) that there were special circumstances rendering compliance with Section 188(2)(a) not reasonably practicable. The US, having submitted to the jurisdiction
of
the ET did not avail itself
of
the statutory defence.
- A construction
of
Section 188 to impose no requirement for consultation with employee representatives about the reasons for a jus imperii decision is not necessary in order to avoid absurdity. Any absurdity involved in subjecting such a decision to scrutiny in the ET could have been avoided by claiming
state
immunity. The law
of state
immunity applies alongside all other domestic statutes including employment legislation. The SIA and the common law
of state
immunity exist alongside TULRCA.
- We agree with Mr Mullins that a special construction
of
Section 188 is not necessary to avoid the absurdity
of
a jus imperii decision being subject to scrutiny in the ET. The US had two 'escape routes' available to it. It chose not to use them.
- As for other arguments relied upon by Mr Cavanagh, the Directive provides a floor not a ceiling
of
rights. The UK has chosen to implement the Directive by not excluding from the right to be consulted on redundancy, representatives
of
workers employed by public administrative bodies or by establishments governed by public law referred to in Article 1(2)(b). Indeed many
of
the cases on Section 188 have been brought by unions representing workers in public authorities. The inclusion
of
such workers within the scope
of
the domestic legislation illustrates that Section 188 cannot be said to be confined to consultation
of
the reasons for commercial decisions leading to the closure
of
a workplace.
- In our judgment the domestic statutory framework does not require or permit a restrictive construction
of
Section 188 in circumstances where redundancies result from a jus imperii decision. The fact that there is express provision for the exemption
of
Crown employees from the scope
of
Section 188 illustrates that but for such a provision redundancy decisions relating to such employees would be subject to its provisions.
- There was no suggestion in Edison that there could be different constructions
of
the statute considered in that case depending upon the status
of
the body or the quality
of
act subject to a rating system which was the subject
of
the litigation. In our judgment there is no principle
of
law which would require or permit a different construction
of
a statute to be adopted in a case where it was to be applied to an act engaging jus imperii from that which was
of
general application. No authority was brought to our attention which suggested otherwise.
- In UK Coal the EAT considered the nature and extent
of
the obligation imposed by Section 188(2)(a) to consult about ways
of
avoiding dismissals. The EAT (Elias P as he then was) held at page 184 paragraph 87:
"But the obligation to consult over avoiding the proposed redundancies inevitably involves engaging with the reasons for the dismissals, and that in turn requires consultation over the reasons for the closure. Strictly,
of
course, it is the proposed dismissals that are the subject
of
consultation, and not the closure itself. Accordingly, if an employer planned a closure but believed that redundancies would nonetheless be avoided, there would be no need to consult over the closure decision itself, at least not pursuant to the obligations under the 1992 Act. In the context
of
a closure, that is likely to be a very exceptional case. Where closure and dismissals are inextricably interlinked, the duty to consult over the reasons arises."
- Mr Cavanagh did not suggest that UK Coal was wrongly decided although he sought to distinguish it on the basis that it applies to commercial decisions not to decisions which involve public policy. We do not agree that such a distinction can be drawn. There is no warrant in Section 188 for drawing such a distinction: the obligation to consult applies to both public sector and private sector employees. Redundancies in the public sector may well result from decisions taken for political and other non commercial reasons. These reasons are not excluded from the consultation requirements
of
Section 188.
- The fact that there was reference to consultation over economic decisions in the Information and Consultation
of
Employees Regulations 2004 in UK Coal as support for a conclusion that Section 188 imposes an obligation in certain circumstances to consult over the reason for a decision which will lead to redundancies does not restrict the application
of
the interpretation
of
Section 188 in that case to decisions taken for economic reasons.
- The effect
of
the judgment in UK Coal is that the statutory obligation to consult about ways
of
avoiding dismissals in circumstances
of
the closure
of
a workplace is to be construed as including the obligation to consult about the reasons for the closure. Unless UK Coal is overturned, the judgment in that case governs the interpretation
of
Section 188(2)(a). Mr Cavanagh referred to Middlesborough and Vardy to suggest that a construction
of
Section 188(2)(a) was possible which did not require consultation over the reasons for a decision to close a workplace and which should have been adopted in this case to avoid absurdity. The EAT in UK Coal considered and departed from both these cases. It is now UK Coal which is to be applied. Accordingly, contrary to the submissions
of
Mr Cavanagh it was not open to the ET to apply a construction
of
Section 188 which is no longer applicable.
- In our judgment the ET did not err in holding that the US, having submitted to the jurisdiction
of
the Employment Tribunal, was in breach
of
its obligation to consult with employee representatives about the reasons for the closure
of
the Base.
Remedy
- We have found that the ET did not err in finding that the US was in breach
of
its obligation to consult employee representatives on the reason for the closure
of
the Base. Thus the ET cannot be said to have erred in law in the basis upon which it made its award. ETs are given a broad discretion in the making
of
a protective award which should not be interfered with lightly on appeal.
- The 'fall back' challenge to the 30 day award is, in our judgment in reality a perversity appeal. The ET was well aware
of
the jus imperii nature
of
the decision to close the Base. In our judgment it cannot be said that the making
of
an award or the period
of
30 days for which it was made was not open to the ET given the breaches
of
Section 188 which it found to have occurred.
Was Mrs
Nolan
an appropriate representative for the purposes
of
Section 188?
- As Mr Cavanagh rightly submitted the key question for the ET to determine was whether Mrs
Nolan
was elected by the employees affected by redundancy 'otherwise than for the purposes
of
' Section 188. If the answer was yes then she was an employee representative entitled to be consulted for the purposes
of
Section 188 and had standing to bring a claim under Section 189.
- We do not accept the argument
of
Mr Cavanagh that because Mrs
Nolan
was elected onto the LNEC after the meeting held by Colonel Binder to inform the staff about the closure
of
the Base and because by that stage there was no work for the LNEC to do other than in connection with the redundancies, her election must have been for the purposes
of
Section 188. The purposes
of
Section 188 in our judgment are those specified. They are consultation between employer and employee representatives on various matters related to redundancies.
- Whilst it is overwhelmingly likely that the work
of
the LNEC from 24 April 2006 would have been concerned with redundancies, in our judgment that work would not be confined to consultations with the US over the redundancies. It may also have involved making arrangements for the provision
of
assistance and advice to redundant employees and dealing with any queries they may have. There was a suggestion that there was a vacancy on the LNEC committee. It is likely that Mrs
Nolan
was elected to deal with a variety
of
matters related to the proposed redundancies including but not limited to consultation with the US. Therefore the timing
of
the election
of
Mrs
Nolan
does not determine whether or not she was elected 'otherwise than for the purposes
of
this section', namely Section 188.
- The ET did not make a finding as to whether Mrs
Nolan
was elected to the LNEC 'otherwise than for the purposes
of
this section.' Since the answer to this question determines whether she was an appropriate representative for the purposes
of
Section 188 and had standing to bring a claim for its breach we remit the case for decision
of
the ET on this issue. Subject to this issue the conclusions
of
the ET are to stand.
Conclusion
- The appeal succeeds to the extent that the conclusion
of
the ET that Mrs
Nolan
had standing to pursue a claim under Section 189 is set aside. The case is remitted to the same ET for determining whether Mrs
Nolan
was elected to the LNEC otherwise than for the purposes
of
Section 188
of
the Trade Union and Labour Relations (Consolidation) Act 1978. All other decisions
of the ET are to stand.
- The case is to be remitted to the same Employment Tribunal if practicable. Otherwise it is to be remitted to an Employment Tribunal whose composition is to be determined by the Regional Chairman.
- We thank both Counsel for their thought provoking submissions.