The United States of America v Nolan

Domestic collective redundancy legislation must be construed from its own language and context. A general policy against “gold-plating” EU directives does not justify assuming that Parliament intended only the directive’s minimum requirements. Where Parliament deliberately chose a narrower Crown-employment exclusion than the directive’s public-administration exclusion, the domestic scheme may extend further. A foreign state acting iure imperii has no implied exemption from the consultation provisions; state immunity, and potentially the special-circumstances defence, provide the appropriate routes. Regulations extending consultation rights to employee representatives in public administrative bodies were within the delegated power because they dealt with matters related to the underlying EU obligation and filled an implementation lacuna. The CJEU’s ruling on the directive’s scope did not therefore require the appeal to be allowed.

Civilian employees at a US Army watercraft repair facility were dismissed when the Hythe base was closed. The respondent brought Employment Tribunal proceedings under section 189 of the Trade Union and Labour Relations (Consolidation) Act 1992, alleging breach of the consultation duties in section 188. The Tribunal upheld the claim and made a 30-day protective award. The Employment Appeal Tribunal rejected the USA’s statutory construction argument and remitted the employee-representative issue; the Tribunal later affirmed its decision. The Court of Appeal had referred a question to the CJEU, which held in [2013] ICR 193 that the Directive did not apply to dismissals at a military base. The central issue was whether that ruling required the domestic legislation to be construed in the same way.

Underhill LJ, with whom Rimer and Moore-Bick LJJ agreed, rejected the contention that the CJEU’s ruling required the appeal to be allowed.

1. The CJEU had decided the scope of the Directive as a matter of EU law. It had not determined the construction of the domestic legislation. The court therefore examined the actual language and context of the Trade Union and Labour Relations (Consolidation) Act 1992.
2. There was no general interpretive presumption that Parliament intended to impose only the minimum requirements of an EU directive. The 1975 legislation had deliberately adopted a Crown-employment exclusion rather than the Directive’s wider exclusion for public administrative bodies. It had also originally applied without the Directive’s minimum redundancy threshold. The decisions in Risk Management Partners Ltd v Brent London Borough Council [2011] UKSC 7 and Alemo-Herron v Parkwood Leisure Ltd [2010] EWCA Civ 24 concerned different statutory schemes. The Litster line of authority concerned legislation that failed to meet even the minimum EU requirements.
3. The Act contained no implied exemption for a foreign sovereign carrying out an act iure imperii. The proper route was a claim to state immunity, with section 188(7) providing a possible alternative or fallback. Underhill LJ provisionally considered that requiring consultation about the reasons for a military closure could be perverse if the decision were established to be an act iure imperii, but this point was not finally decided.
4. The 1995 Regulations could lawfully extend employee-representative rights beyond the Directive. Although those rights were not required for public administrative bodies, they were matters arising out of or related to the Community obligation within section 2(2)(b) of the European Communities Act 1972. The extension filled an implementation lacuna and preserved parity between cases with and without recognised trade unions.

The CJEU-scope argument was rejected. The outstanding Fujitsu issue required a further hearing unless the parties reached a compromise.

1. Court of Appeal (Civil Division) The court rejected the argument that the CJEU ruling required the domestic claim to fail. It left the Fujitsu issue for a further hearing.
2. Court of Appeal (Civil Division) On the earlier hearing, the court rejected the argument based on the sovereign character of the base closure and referred the Fujitsu question to the CJEU: [2010] EWCA Civ 1223; [2011] IRLR 40.
3. CJEU The court held that the Directive did not apply to the dismissal of civilian staff at a military base: [2013] ICR 193.
4. Employment Appeal Tribunal The EAT rejected the USA’s construction argument and remitted the employee-representative issue: [2009] IRLR 923. The Employment Tribunal later affirmed its original decision.
5. Employment Tribunal The Tribunal upheld the breach of section 188 and made a 30-day protective award.