Employment law update:

Facts: The USA maintained a watercraft repair centre in Hampshire, and when the base closed Mrs Nolan was made redundant. She complained that the USA had failed to consult any employee representative about its proposal to dismiss her, contrary to the Trade Union and Labour Relations (Consolidation) Act (TULR(C)A) 1992, as amended. Her claim gave rise to protracted litigation. An employment tribunal made a protective award in her favour, upheld by the Employment Appeal Tribunal (EAT). The Court of Appeal referred to the Court of Justice of the European Union (CJEU) the question of whether the duty to consult arose when there was a proposal to close the base, or only when there was a decision to do so, but the CJEU declined jurisdiction (C-583 /10).

The USA appealed to the Supreme Court on two main grounds. First, that the TULR(C)A did not (either on the basis of the CJEU’s ruling, or when EU law and international law was taken into account) apply to employment by a public administrative establishment, at least as regards non-commercial activity such as closure of a military base decided at the highest level in Washington. Second, that the regulations about the duty to consult went further than EU law required by protecting workers without trade union representation employed at public administration establishments.

... we are one step nearer answering one of the great unresolved questions of UK and EU employment law ... 

Decision: The Supreme Court rejected the USA’s appeal by a majority of four to one. The USA could have invoked state immunity, but failed to do so in time; in addition, jurisdiction is primarily a territorial issue in both domestic and international law. The UK was not legislating extra-territorially when the TULR(C)A applied to domestic redundancies decided on overseas. Nor was it improper for the rules to apply to workers who were employed by public administration establishments and did not have trade union representation.

Comment: The editor of Industrial Relations Law Reports rightly says that:

… following the Supreme Court’s decision, we are one step nearer answering one of the great unresolved questions of UK and EU employment law, when does the duty to consult over collective redundancies arise: is it when the employer is proposing, but has not yet made, a strategic business or operational decision that will foreseeably or inevitably lead to collective redundancies, or is it only when that decision has actually been made and the employer is then proposing consequential redundancies?

The USA could have relied on state immunity to stop the proceedings when they were begun, but did not do so in time. Instead, it argued that the duty to consult over redundancies did not apply to the strategic decision to close a military base, and by taking part in the proceedings it waived its right to state immunity.

After the decision of the EAT in UK Coal Mining Ltd v (1) National Union of Mineworkers (Northumberland area) (2) British Association of Colliery Management [2008] IRLR 4 that there was a duty to consult about a closure decision, this has proved to be a mistake. We now await the Court of Appeal’s answer to the ‘great unresolved question’ .