United States of America v Nolan

The Trade Union and Labour Relations (Consolidation) Act 1992 contains no implied exemption allowing a foreign sovereign to avoid consultation about an operational decision to close a workplace, even where the decision is military or strategically sensitive. State immunity protects the state’s interests, and the special-circumstances defence in section 188(7) might be relevant, although it was not decided.

The court did not finally resolve when consultation must begin under section 188 and Directive 98/59/EC. The Court of Justice’s decision in Fujitsu was materially unclear. Because that issue was decisive and important to industrial practice, the Court of Appeal proposed a reference to the Court of Justice. The appeal therefore remained undecided.

The United States closed RSA Hythe, a United States Army base in Hampshire, causing about 200 civilian redundancies. Christine Nolan claimed a protective award under the Trade Union and Labour Relations (Consolidation) Act 1992, alleging that the United States had failed to consult employee representatives before deciding to close the base.

The employment tribunal upheld liability and made a protective award. The Employment Appeal Tribunal remitted the question whether Mrs Nolan was an appropriate employee representative, but otherwise upheld the liability and remedy decisions. The United States appealed, arguing that sovereign immunity or the nature of the military decision excluded any duty to consult before closure, and that consultation duties arose only after the closure decision had been made.

During the appeal, reliance was placed on Akavan Erityisalojen Keskusliitto Alek RY and others v Fujitsu Siemens Computers OY, which the court considered materially unclear on the point at which the Directive’s consultation obligation begins.

1. Reference and disposition. The Court of Appeal could not finally determine the appeal without further guidance from the Court of Justice of the European Union on the meaning of Article 2(1) of Directive 98/59/EC. Although it was not a court of last resort and the United States opposed a reference, the issue was important to the litigation and to industrial practice generally. The court therefore proposed to order a reference and requested a draft reference. The appeal was not finally decided.
2. Sovereign state exemption. There was no statutory basis for implying an exemption from section 188 for a foreign sovereign making an operational decision in the nature of jus imperii. The sovereign state’s interests were protected by its ability to claim state immunity. The court considered, without deciding, that a decision not to consult about a militarily sensitive operational decision might engage the special-circumstances defence in section 188(7).
3. Timing and scope of consultation. The court explained the approach in UK Coal Mining Ltd v National Union of Mineworkers (Northumberland Area) and another [2008] ICR 163, under which closure and inevitable redundancies may be inextricably linked so that consultation includes the reasons for closure. However, the court did not finally endorse that approach. If Fujitsu required consultation only after adoption of the strategic decision, the wider interpretation in R v British Coal Corporation, Ex parte Vardy and Others [1993] ICR 720 would be erroneous, while Middlesbrough Council v Transport and General Workers’ Union [2002] IRLR 332 and Securicor Omega Express Ltd v GMB [2004] IRLR 9 would have been correctly decided.
4. Other issues. The tribunal’s finding that consultation began on 5 June 2006 did not establish a breach of the 90-day minimum in section 188(1A), since the dismissals took effect on 29 September 2006. The EAT was nevertheless entitled to remit the unresolved question of Mrs Nolan’s representative status to the same tribunal, because the necessary factual findings had not been made and the choice of tribunal was discretionary.

• Court of Appeal (Civil Division) — In [2010] EWCA Civ 1223, the court proposed a reference to the Court of Justice on the timing of the consultation obligation and did not finally determine the appeal.
• Employment Appeal Tribunal — On 15 May 2009, in UKEAT/0328/08/CEA and UKEAT/0329/08/CEA, the EAT remitted the question of Mrs Nolan’s entitlement to bring the claim and otherwise upheld the employment tribunal’s liability and remedy decisions.
• Employment Tribunal — The tribunal upheld the protective-award claim and made a 30-day protective award in respect of qualifying civilian employees.