USA v Nolan

In USA v Nolan, the Supreme Court has ruled that the collective redundancy consultation obligations under S.188 of the Trade Union and Labour Relations (Consolidation) Act 1992 (“TULRCA”) applied to dismissals resulting from the closure of a US military base in the UK. Following a lengthy court process that has lasted a number of years the Supreme Court recently dismissed the appeal of the USA and decided this jurisdictional point.

The Supreme Court held that TULRCA should be interpreted as covering the closure of a military base such as occurred in this case. Even though such closure was not a situation foreseen by the legislature, this was not a reason for reading into clear legislation a specific exemption that would not reflect the scope of any exemption in EU law, especially when the foreign state could have invoked state immunity but failed to do so in time. Since the legislation only covers redundancies occurring at institutions in England, Wales and Scotland, it could not be said that the UK was seeking to legislate extra-territorially.

Following the decision of the Supreme Court, the case will now be remitted to the Court of Appeal for a decision on the substantive issue (rather than the jurisdictional issue in the case) namely when the duty to consult in a collective redundancy situation arises. The Court of Appeal will consider when the duty to collective consult is triggered and whether it arises when a proposed operational decision to close a workplace is taken or whether it only arises once the employer has made that strategic decision and is proposing consequential redundancies.

We will keep you updated as to when this will be decided by the Court of Appeal and when the long-awaited outcome is known. The decision will have important implications for how employees deal with collective redundancies in future.