Supreme Court ruling in USA v Nolan on collective redundancy consultation

USA v Nolan
Glenn Copus / Evening Standard /REX Shutterstock

In the long-running case USA v Nolan, the UK Supreme Court has held that the US Government did have collective redundancy consultation obligations towards civilian workers during the closure of a US army base in the UK. The case now returns to the Court of Appeal to decide if redundancy consultation began in time.

USA v Nolan: background

About 200 civilian staff were employed at a US army base in Hampshire.

In March 2006, the US Government decided to close the base by the end of September.

Employees were informed of the closure in April and, in June, their representatives were told that all employees were at risk of redundancy.

Collective consultation on the proposed redundancies began in early June 2006.

Employees, including Ms Nolan, were given notices of dismissal at the end of June. Their dismissals took effect at the end of September.

Ms Nolan, an employee representative, brought a claim on behalf of the civilian staff at the base that the US Government should have started consulting earlier.

USA v Nolan: through the courts

The employment tribunal awarded the employees protective awards because the employer did not consult on redundancies “in good time”. This decision was confirmed by the Employment Appeal Tribunal.

However, the case stalled after it was appealed again and sent to the European Court of Justice. The European Court decided that, as the employer concerned is a sovereign nation, it is not bound by the European Collective Redundancies Directive.

In July 2015, the case returned to the UK for the Supreme Court to consider whether or not, despite not being bound by EU law, the US Government still had collective redundancy consultation obligations under domestic legislation.

USA v Nolan: Supreme Court decision

Collective redundancy consultation: cases on appeal

Cases on appeal Keep track of appeals in important employment cases, including on collective redundancy consultation.

In its judgment of 21 October 2015, the UK Supreme Court held that UK domestic laws on redundancy consultation do apply to employees of public administrative bodies, such as US government employees working on UK soil.

The Supreme Court said that this is the case even though the Trade Union and Labour Relations (Consolidation) Act 1992 goes beyond what the Collective Redundancies Directive requires.

The case now returns to the Court of Appeal for it to consider whether or not the US Government complied with its redundancy consultation obligations under UK law.

The key question for the Court of Appeal is likely to be whether the duty arises when the employer has made a strategic decision from which collective redundancies will follow, or at an earlier stage, when the employer is contemplating a decision from which redundancies might follow.

Continue reading for further analysis of the judgment and the possible implications for employers on XpertHR…

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