United States of America v Nolan
Section 188 of the 1992 Trade Union and Labour Relations Consolidation Act (TULRCA) states that employers must consult when "proposing" to dismiss an employee. However, because of conflicting case law, the Court of Appeal in United States of America v Nolan has asked the European Court of Justice (ECJ) to clarify exactly when the employer's obligation to consult arises in relation to collective redundancies.
Basic facts
The US army decided on 13 March 2006 to close a military base at Hythe in Hampshire. The workforce was informed of the decision on 24 April and the Ministry of Defence was formally notified on 9 May (although it was told informally in April).
Consultation with the union started on 5 June and about 200 civilian employees were made redundant at the end of September. One of them, Mrs Nolan who was an employee representative, brought a claim for a protective award.
She argued that the USA had failed to consult with representatives of the civilian workforce in accordance with its obligations under section 188 of TULRCA. In particular, that it had not consulted in advance about the operational decision to close the base.
Tribunal and EAT decisions
And the tribunal agreed. It said that the USA had failed to engage in any meaningful consultation and made a protective award for the UK citizens who were civilian employees at the base when the redundancy notices were issued (29 June 2006) and set the protected period at 30 days.
The USA appealed on the basis that as a foreign government it had no obligation to consult before closing a base, but the EAT disagreed and upheld the tribunal’s decision about the protective award.
The USA appealed again, arguing that the decision of the ECJ in the case of Akavan Erityisalojen Keskusliitto Alek RY and ors v Fujitsu Siemens Computers OY meant that employers do not have to consult about a proposal to close a workplace as the obligation only arose once it had decided to close it.
Court of Appeal decision
Noting that the decision in Fujitsu was crucial to the appeal, the Court said it could not make a decision in this case because it found the ECJ’s reasoning so “difficult to follow”.
It said it was not clear, following the decision, “whether the consultation obligation arises (i) 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 (ii) only when that decision has actually been made and he [sic] is then proposing consequential redundancies?”
On that basis, the Court concluded that it needed further guidance from the ECJ “as to the point at which, under the Directive, the consultation obligation arises”.