Although generally the Court of Justice of the European Union (CJEU) tries to interpret EU laws as uniformly as possible with the national laws that transpose them, it held in United States of America v Nolan that that principle did not apply if a provision was expressly excluded by EU law. It could not therefore give a ruling about when consultation should begin in relation to the closure of a US army base as the Collective Redundancies Directive excluded public administrative bodies from its scope.
The claimants’ union, the GMB, instructed Thompsons to act on their behalf.
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.
Mrs Nolan brought a claim for a protective award, arguing that the USA had failed to consult with representatives of the civilian workforce in accordance with its obligations under section 188 of the Trade Union and Labour Relations Consolidation Act (TULRCA). This states that employers must consult when "proposing" to dismiss an employee. In particular, she argued that it had not consulted in advance about the operational decision to close the base.
Decisions of lower courts
And the tribunal agreed, holding that the USA had failed to engage in any meaningful consultation. It 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, arguing that as a foreign government it had no obligation to consult before closing a base. The EAT disagreed and it appealed again to the Court of Appeal, arguing that the decision of the CJEU in the case of Akavan Erityisalojen Keskusliitto Alek RY and ors v Fujitsu Siemens Computers OY meant that employers only have to consult about closing a workplace once they had actually decided to close it.
Noting that the decision in Fujitsu was crucial to the appeal, the Court of Appeal said it could not make a decision because it was not clear from that judgment when the obligation to consult arose and asked the CJEU to clarify the point.
Decision of CJEU
As article 1(2)(b) of the Collective Redundancies Directive 1998 (CRD) excluded workers employed by public administrative bodies or by establishments governed by public law (unlike section 188), the Court said that civilian staff at a military base fell within that exclusion.
Although the CRD had been introduced to help the internal market function better by providing the same level of protection for all dismissed workers in member states, the Court said that anything to do with the internal market or competition between undertakings did not apply to the armed forces. As the Court of Justice had already held, activities which fell within the exercise of public powers (like national defence) could not be classified as economic activity. By virtue of the exclusion laid down by article 1(2)(b) the dismissal of staff at a military base did not therefore fall within the scope of the directive.
It also rejected Ms Nolan’s argument that even if the directive did not apply, it still had jurisdiction to come to a decision as the national legislation (in this case TULRCA) applied the directive to employees of public administrations in the UK.
Acknowledging that it was in the interests of the EU to interpret laws as uniformly as possible with the national law that transpose them, the Court said that principle did not apply to measures that were expressly excluded by a particular provision of EU law, as was the case with the CRD. The CJEU concluded that it did not therefore have jurisdiction to respond to the question referred to it by the Court of Appeal.
The Court of Appeal has been asked to lift the stay on proceedings and the case will now revert back to the Court for determination.