The Kingdom of Spain v Lydia Lorenzo

The Court of Appeal dismissed Spain’s appeal against the Employment Appeal Tribunal’s decision that Spain could not rely on state or diplomatic immunity to defeat the respondent’s discrimination and harassment claims under the Equality Act 2010. The court applied the reasoning in Benkharbouche (UKSC) and concluded that whether state immunity applies in employment disputes depends principally on the juridical character of the employee’s functions rather than solely on nationality. The Employment Tribunal’s finding that the claimant’s duties were not inherently sovereign (not analogous to cipher clerks or confidential secretaries) was upheld, and section 4(2)(a) of the State Immunity Act 1978 was disapplied as incompatible with the claimant’s EU-era rights (including Article 47 of the EU Charter) insofar as those rights applied to the claims brought before withdrawal.

Key statutory provisions considered included sections of the State Immunity Act 1978 (notably s.4 and s.16) and the State Immunity Act 1978 (Remedial) Order 2023; the court also addressed Article 6 ECHR and Article 47 of the EU Charter as bearing on disapplication. The court rejected the submission that any remarks or actions by a senior diplomat are necessarily sovereign acts and rejected Spain’s separate plea that diplomatic immunity could be invoked by the sending state to bar the tribunal claim.

Background and procedural history

• The claimant, Lydia Lorenzo, worked at the Spanish Embassy in London in a variety of roles between 2008–2011 and 2013–2015 and resigned in September 2015. She brought ET claims on 24 December 2015 for constructive unfair dismissal, failure to provide written terms, direct racial discrimination and harassment under the Equality Act 2010. Spain pleaded state immunity and later amended to plead diplomatic immunity.
• At first instance Employment Judge Segal held that Spain was immune from Employment Rights Act and Employment Act claims but rejected sovereign and diplomatic immunity for the Equality Act claims. Ellenbogen J in the Employment Appeal Tribunal dismissed Spain’s appeal [2023] EAT 153. Spain appealed to the Court of Appeal.

Nature of the issues

• Whether the acts complained of (including disparaging remarks and restrictions on access to documents) were acts of sovereign governmental character such that state immunity applied.
• Whether the claimant’s status (administrative/technical staff), the nature of her functions, or her dual nationality meant state immunity should apply (including whether s 4(2)(a) of the State Immunity Act 1978 remained applicable).
• Whether the sending state could invoke diplomatic immunity to bar the claims.

Court’s reasoning and conclusions

• The court followed the Supreme Court’s analysis in Benkharbouche [2017] UKSC 62: state immunity in employment cases turns largely on the juridical character of the functions performed by the employee. Employment that involves personal participation in diplomatic or political operations is more likely to attract immunity; ancillary administrative roles ordinarily do not.
• The Employment Tribunal’s factual findings — that the claimant’s duties were not comparable to cipher clerks or confidential secretaries and did not involve personal participation in diplomatic or political operations — were not shown to be perverse and were upheld. The court rejected the submission that anything said or done by a senior diplomat is necessarily sovereign.
• The tension between immunity for a State in respect of its nationals and the protection of locally recruited staff was acknowledged; the tribunal’s conclusion that the claimant was effectively locally recruited staff who happened to hold dual nationality was accepted, and s 4(2)(a) of the 1978 Act was disapplied in the context of the claimant’s EU-era Equality Act claims for the reasons given in Benkharbouche.
• The court found no persuasive authority establishing that a State may invoke diplomatic immunity on its own behalf to defeat employment claims brought by its employee; the isolated foreign decision relied upon was treated as an outlier.

Relief sought

• The appellant sought to uphold immunity (state and diplomatic) to defeat the claims. The respondent sought continuation of her Equality Act claims. The Court of Appeal dismissed the appeal and upheld the tribunal and EAT decisions allowing the Equality Act claims to proceed to merits.

This was an appeal from the Employment Appeal Tribunal. The Court of Appeal dismissed the appeal. The court upheld the Employment Tribunal’s finding that the claimant’s functions were not inherently sovereign in character and endorsed the EAT’s conclusion that s 4(2)(a) of the State Immunity Act 1978 should be disapplied in relation to the claimant’s Equality Act claims (brought before UK withdrawal) for the reasons given in Benkharbouche. The court also rejected Spain’s contention that it could rely on diplomatic immunity to bar the claims.

Employment Tribunal (first instance) – judgment of Employment Judge Oliver Segal QC (decision summarised in the judgment); appeal to Employment Appeal Tribunal – Ellenbogen J [2023] EAT 153 (appeal dismissed); further appeal to the Court of Appeal – [2024] EWCA Civ 1602 (present judgment, appeal dismissed).