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You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> United States of America v Nolan [2009] UKEAT 0328_08_1505 (15 May 2009)
URL: http://www.bailii.org/uk/cases/UKEAT/2009/0328_08_1505.html
Cite as: [2009] UKEAT 0328_08_1505, [2009] IRLR 923

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BAILII case number: [2009] UKEAT 0328_08_1505
Appeal No. UKEAT/0328/08/CEA UKEAT/0329/08

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
             At the Tribunal
             On 21 & 22 January 2009
             Judgment delivered on 15 May 2009

Before

THE HONOURABLE MRS JUSTICE SLADE

MRS R CHAPMAN

MR D NORMAN



UNITED STATES OF AMERICA APPELLANT

MRS S NOLAN RESPONDENT


Transcript of Proceedings

JUDGMENT

© Copyright 2009


    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

  1. 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.
  2. 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.
  3. 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 :
  4. (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.

  5. 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.
  6. The issues on appeal

  7. John Cavanagh QC on behalf of the Appellant stated that this appeal gives rise to the following issues:
  8. (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.

  9. 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.
  10. The facts

  11. This summary of the facts is taken from the findings of fact in the February judgment.
  12. 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.
  13. 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.
  14. On 21 April 2006 there was a BBC news item concerning the closure of the Base.
  15. 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.
  16. 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.
  17. 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.
  18. Consultation with the LNEC in accordance with Section 188 TULRCA commenced on 5 June 2006.
  19. 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.
  20. 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.
  21. 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-
    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

  22. 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.
  23. 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:
  24. "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."

  25. 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:
  26. "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'."

  27. The ET concluded:
  28. "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."
  29. As for the substance of the consultation, the ET held:
  30. "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."
  31. 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.
  32. The ET held at paragraph 60:
  33. "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.

  34. 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.
  35. The ET made the following findings in relation to the timing of the consultation which took place:
  36. "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]."

  37. The ET concluded that the US were in breach of Section 188 in the following respects:
  38. "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."
  39. 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.
  40. The April Judgment

  41. The ET conducted a further hearing to consider remedy.
  42. As stated above the ET corrected paragraph 68.1 of its February judgment. On reconsideration it held at paragraph 53 that:
  43. "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."
  44. 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.
  45. 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.
  46. 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.
  47. 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.
  48. 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.
  49. Under the heading 'Should there be a protective award' the ET quoted an extract from Mr James' skeleton argument.
  50. "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."
  51. 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.
  52. The ET held at paragraph 44:
  53. "We consider that closure was an exercise of jure imperii but this of itself is not a reason for not making a protective award."

  54. 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.
  55. 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.
  56. 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:
  57. '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.'
  58. 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.
  59. 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.
  60. "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.

  61. The following matters were agreed between the parties.
  62. (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

  63. 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.
  64. 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.
  65. 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.
  66. Mr Cavanagh helpfully made his position on the following matters clear:
  67. (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.

  68. 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.
  69. Paragraph 65 of his skeleton argument set out the application of those canons of construction for which he contended.
  70. "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."
  71. 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:
  72. "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 … ."
  73. 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.
  74. 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:
  75. "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."

  76. 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.
  77. Mr Cavanagh contended in his skeleton argument that:
  78. "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."
  79. 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.
  80. 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.
  81. 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.
  82. 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.
  83. 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.
  84. Remedy

  85. 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.
  86. 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.
  87. 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
  88. "(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."

  89. 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.
  90. Was Mrs Nolan was an appropriate representative for the purposes of Section 188?

  91. 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).
  92. 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.
  93. Mr Cavanagh submitted that the key question was the purpose of Mrs Nolan's election to the LNEC.
  94. 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.
  95. Submissions on behalf of Mrs Nolan

    Did the ET err in failing to have regard to jus imperii in determining liability and remedy?

    Liability

  96. 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.
  97. 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.
  98. 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.
  99. 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.
  100. 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.
  101. Remedy

  102. 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.
  103. Was Mrs Nolan an appropriate representative for the purposes of Section 188?

  104. 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.
  105. 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'.
  106. 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.

  107. 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.
  108. 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.
  109. 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.
  110. 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.
  111. 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.
  112. 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.
  113. 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.
  114. 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.
  115. 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.
  116. 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.
  117. 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:
  118. "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."
  119. 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.
  120. 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.
  121. 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.
  122. 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.
  123. Remedy

  124. 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.
  125. 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.
  126. Was Mrs Nolan an appropriate representative for the purposes of Section 188?

  127. 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.
  128. 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.
  129. 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.
  130. 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.
  131. Conclusion

  132. 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.
  133. 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.
  134. We thank both Counsel for their thought provoking submissions.


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URL: http://www.bailii.org/uk/cases/UKEAT/2009/0328_08_1505.html