USA v Nolan: Supreme Court Confirms That s.188 Applies to US Base in UK

    View Author October 2015
    Yesterday the Supreme Court handed down its judgment in the long running collective redundancy consultation case of USA v Nolan. But before you get too excited, this particular hearing was about the extent to which a foreign government is covered by the UK collective redundancy provisions and not on the more interesting and pertinent question of when the duty to consult collectively is actually triggered. 

    This case concerned the closure of a US military base in Hampshire in 2006, with the result that all 200 civilian employees were made redundant. Mrs Nolan, an employee at the base, brought a claim in the Employment Tribunal for a protective award, arguing that there had been no collective consultation with employee representatives prior to the decision to close the base, as she said was required by s.188 of the Trade Union and Labour Relations (Consolidation) Act 1992 (“TULR(C)A 1992”). The Tribunal upheld Mrs Nolan’s claim and at a subsequent remedy hearing it made a 30-day protective award. 

    There followed a lot of to-ing and fro-ing between the Courts, including the ECJ, with the US raising various technical and jurisdictional arguments about why it should not have to comply at all with the collective redundancy provisions in TULR(C)A 1992, regardless of what they said about when the duty to consult arises.  

    In yesterday’s decision the Supreme Court has upheld the approach of the Court of Appeal and confirmed that there is no specific exemption in TULR(C)A for foreign states from the obligation to consult about collective redundancies among their UK employees. Once again it was pointed out that the US could have claimed state immunity (which would have provided a complete defence), but did not do so in time. 

    This case should now return to the Court of Appeal for a further hearing to consider exactly when the obligation to consult collectively about large-scale redundancies is triggered. Is it when an employer is proposing to make a strategic business decision that will inevitably lead to redundancies, or only once the employer has made that strategic decision and is then proposing redundancies in consequence? The former would extend information and consultation rights backwards into commercial decision-making, while the latter might be seen as pointlessly late – how can you consult meaningfully about reducing the number of redundancies where the decision which makes them inevitable has already been taken? We have not heard the last of this one.