Anna Lintner

24 September 2015

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THE STATE OF STATE IMMUNITY IN EMPLOYMENT DISPUTES:

BENKHARBOUCHE AND BEYOND

ANNA LINTNER1

Seminar delivered at Ely Place Chambers on 24 September 2015

Janah v Libya; Benkharbouche v Embassy of the Republic of Sudan [2015] EWCA Civ

33: State Immunity Act 1978

Harrington v USA (2015, Leeds Employment Tribunal): Common law State immunity

I. STATE IMMUNITY

1. The doctrine of State immunity derives from the principle of sovereignty and

operates to prevent sovereign States from being made the subject of legal

proceedings in the courts of a foreign State.

2. Traditionally, immunity was absolute and unqualified; a State would enjoy

immunity in foreign courts regardless of the subject matter of the proceedings.

However, a more restrictive doctrine of immunity has emerged in recent times

within customary international law and the English common law. The restrictive

theory of immunity confers immunity on a State only when acting in the exercise

of its sovereign functions.

3. The two primary sources of State immunity in English domestic law are the State

Immunity Act 1978 (“SIA”) and the common law.

II. STATE IMMUNITY ACT 1978

The general immunity

4. S. 1(1) SIA confers the general statutory immunity:

1. General immunity from jurisdiction

(1) A State is immune from the jurisdiction of the courts of the United

Kingdom except as provided in the following provisions of this Part of

this Act

1 Anna Lintner appeared as Junior Counsel on behalf of the Government of the United States of America

in Harrington v USA, instructed by Volterra Fietta and led by Professor Dan Sarooshi of Essex Court

Chambers.

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Procedural issues

5. Pursuant to s. 1(2) SIA, the grant of general immunity is not contingent upon the

State appearing in the proceedings; the Tribunal is required to give effect to the

immunity in any event:

(2) A court shall give effect to the immunity conferred by this section even

though the State does not appear in the proceedings in question

6. This is important because it is not uncommon for States to fail to either respond to

a claim or appear before the Tribunal; the Embassy of Sudan did not appear before

the Court of Appeal in Benkharbouche. In those circumstances the Tribunal is

required to give effect to the immunity and may invite the Treasury Solicitor to

instruct an amicus curiae in the absence of representation of the State (see e.g.

Sengupta v Republic of India [1983] ICR 221). A Tribunal that gives Judgment in

Default against a State without considering whether the State is immune is liable

to have its decision overturned on appeal.

7. A further potential procedural issue is waiver of immunity; pursuant to s. 2 SIA,

immunity is waived if the State takes any step in the proceedings:

2. Submission to Jurisdiction

(1) A State is not immune as respects proceedings in respect of which it

has submitted to the jurisdiction of the courts of the United Kingdom.

[…]

(3) A State is deemed to have submitted—

(a) if it has instituted the proceedings; or

(b) subject to subsections (4) and (5) below, if it has intervened or

taken any step in the proceedings.

(4) Subsection (3)(b) above does not apply to intervention or any step

taken for the purpose only of—

(a) claiming immunity; or

[…]

8. There is no clear authority as to whether the act of entering an ET3 and Grounds

of Response containing a plea of immunity constitutes taking a step in the

proceedings for the purpose of s. 2 SIA. It is likely that, provided no substantive

response to the claim is also pleaded, this would fall within the exception in s. 2(4)

SIA, which provides that immunity will not be waived where the step taken is for

the purpose only of claiming immunity. However, for the avoidance of any doubt,

the preferable mode of response to a claim in relation to which a State considers it

is immune from suit is to write to the Tribunal confirming that the State asserts

immunity and requesting a preliminary hearing to determine the issue of

jurisdiction.

S. 4 SIA: Employment exception to immunity

9. The absolute immunity in s. 1 SIA is qualified by exceptions, which restrict the

general immunity. These include proceedings relating to commercial transactions

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(s. 3 SIA) and personal injury or damage to property (s. 5 SIA). S. 4(1) SIA

provides a general exception for proceedings relating to employment:

4. Contracts of employment

(1) A State is not immune as respects proceedings relating to a contract of

employment between the State and an individual where the contract was

made in the United Kingdom or the work is to be wholly or partly

performed there.

10. The employment exception in s. 4(1) SIA is itself subject to exceptions in s. 4(2)

SIA, which have the effect of restoring the general statutory immunity in

proceedings to which they apply:

(2) Subject to subsection (3) and (4) below, this section does not apply if –

(a) at the time when the proceedings are brought the individual is a

national of the State concerned; or

(b) at the time when the contract was made the individual was neither a

national of the United Kingdom nor habitually resident there; or

(c) the parties to the contract have otherwise agreed in writing

11. The effect of this subsection is to confer a blanket immunity where any of the

criteria in (a), (b) or (c) are met. The blanket immunity conferred by s. 4(2)(b) SIA

was one of the two provisions of the SIA under challenge in Benkharbouche (see

paragraphs 16-36 below).

S. 16 SIA: Further exceptions to immunity

12. There are two further exceptions to the general immunity and its exceptions,

contained in s. 16 SIA. S. 16(1) SIA excludes proceedings relating to the

employment of persons within a diplomatic mission (in permanent form, an

embassy) from the employment exception under s. 4 SIA:

16. Excluded matters

(1) This Part of this Act does not affect any immunity or privilege conferred

by the Diplomatic Privileges Act 1964 or the Consular Relations Act

1968; and

(a) section 4 above does not apply to proceedings concerning the

employment of the members of a mission within the meaning of the

Convention scheduled to the said Act of 1964 or the members of a

consular post within the meaning of the Convention scheduled to the

said Act of 1968

[…]

13. Under Article 1 of the Vienna Convention on Diplomatic Relations 1961, the

“members of the mission” are the head of the mission, the members of diplomatic

staff, the technical staff and the service staff, including members of the staff of the

mission in the domestic service of the mission. The effect of s. 16(1) SIA is

therefore to confer blanket immunity in proceedings relating to the employment of

all members of staff employed within a foreign embassy in the UK. This section

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was the subject of challenge in Benkharbouche and Janah (as to which see paras

16-36 below).

14. S. 16(2) SIA disapplies the whole of the first part of the SIA, including the general

immunity in s. 1 and the employment exception under s. 4, in proceeding relating

to anything done by or in relation to the armed forces of a foreign state:

(2) This Part of this Act does not apply to proceedings relating to anything

done by or in relation to the armed forces of a State while present in the

United Kingdom and, in particular has effect subject to the Visiting

Forces Act 1952

15. The effect of s. 16(2) SIA is that, where it applies, the issue of immunity will be

determined according to the common law rather than under the SIA. This was the

situation that arose in Harrington (as to which see paras 38-68 below).

III. BENKHARBOUCHE V SUDAN / JANAH V LIBYA

The Facts

16. Ms Janah was a Moroccan national who had lived in the UK since 2005 and was

employed as member of domestic staff in the Libyan Embassy in London, where

her duties included cooking, cleaning, laundering, shopping and serving meals. She

was dismissed and brought claims for unfair dismissal, arrears of pay, racial

discrimination and harassment and breach of the Working Time Regulations 1998.

Libya claimed immunity under s. 1 SIA, read in conjunction with s. 16(1)(a) and

s. 4(2)(b) SIA (it having been conceded that Ms Janah was not habitually resident

in the UK at the time her contract of employment was made).

17. Ms Benkharbouche was a Moroccan national who was employed as a cook in the

Sudanese Embassy in London. She was dismissed and brought claims for unfair

dismissal, failure to pay the minimum wage and breach of the Working Time

Regulations 1998. The Sudanese Embassy claimed immunity under s. 1 SIA, read

in conjunction with s. 16(1)(a). The question whether Ms Benkharbouche was

habitutally resident in the UK was not addressed and it was therefore unclear

whether the Sudanese Embassy might additionally be entitled to claim immunity

pursuant to s. 4(2)(b) SIA.

18. The Claimants contended that, to the extent that ss. 4(2)(b) and 16(1)(a) SIA on

their face appeared to grant Sudan and Libya immunity in the proceedings before

the Employment Tribunal, they were inconsistent with the Claimants’ right of

access to a court under Article 6 ECHR and Article 47 EU Charter.

Right of access to a court

19. Article 6(1) of the European Convention for the Protection of Human Rights

and Fundamental Freedoms (“ECHR”) provides:

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Right to a fair trial

(1) In the determination of his civil rights and obligations or of any criminal

charge against him, everyone is entitled to a fair and public hearing within

a reasonable time by an independent and impartial tribunal established by

law …

20. Article 47 of the Charter of Fundamental Rights of the European Union (“EU

Charter”) provides:

Right to an effective remedy and to a fair trial Everyone whose rights and freedoms guaranteed by the law of the Union are

violated has the right to an effective remedy before a tribunal in compliance

with the conditions laid down in this Article.

Everyone is entitled to a fair and public hearing within a reasonable time by

an independent and impartial tribunal previously established by law.

Everyone shall have the possibility of being advised, defended and represented

…

21. It is important to note that Article 47 EU Charter guarantees a right of access to a

court for the purposes only of seeking a remedy for violations of rights and

freedoms guaranteed by EU law. It does not guarantee a right of access to a court

for the purposes of protecting a purely domestic right.

22. On its face, the doctrine of State immunity appears to present a conflict with the

right of access to a court under Article 6 ECHR and Article 47 EU Charter. The

House of Lords initially declined to find that Article 6 was engaged by a finding of

State immunity, on the basis that the court cannot be said to deny access where it

lacks jurisdiction, because it has no access to give:

Article 6 requires contracting states to maintain fair and public judicial

processes and forbids them to deny individuals access to those processes for

the determination of their civil rights. It presupposes that the contracting

states have the powers of adjudication necessary to resolve the issues in

dispute. But it does not confer on contracting states adjudicative powers which

they do not possess. State immunity, as I have explained, is a creature of

customary international law and derives from the equality of sovereign states.

It is not a self-imposed restriction on the jurisdiction of its courts which the

United Kingdom has chosen to adopt. It is a limitation imposed from without

upon the sovereignty of the United Kingdom itself. [Underlining added]

Holland v Lampen-Wolfe [2000] 1 WLR 1573 per Lord Millett at 1588.

23. The House of Lords subsequently (and somewhat reluctantly) reversed this

position in light of jurisprudence of the European Court of Human Rights

(“ECtHR”) to the effect that Article 6 ECHR is engaged in such circumstances:

First, [the Claimants] must show that article 6 of the Convention is engaged

by the grant of immunity to the Kingdom on behalf of itself and the individual

defendants. In this task they derive great help from Al-Adsani v United

Kingdom (2001) 34 EHRR 273 where, in a narrowly split decision of the

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Grand Chamber, all judges of the European Court of Human Rights held

article 6 to be engaged. I must confess to some difficulty in accepting this.

Based on the old principle par in parem non habet imperium, the rule of

international law is not that a state should not exercise over another state a

jurisdiction which it has but that (save in cases recognised by international

law) a state has no jurisdiction over another state. I do not understand how a

state can be said to deny access to its court if it has no access to give. This was

the opinion expressed by Lord Millett in Holland v Lampen-Wolfe [2000] 1

WLR 1573, 1588, and it seems to me persuasive. I shall, however, assume

hereafter that article 6 is engaged, as the European Court held.

Jones v Ministry of the Interior of the Kingdom of Saudi Arabia [2006] UKHL

26 [2007] 1 AC 270 per Lord Bingham at paragraph 14.

Restrictions on right of access: proportionality and legitimate aim

24. Where engaged, the right of access to a court is not absolute. However, any

restrictions on the right must be a proportionate means of achieving a legitimate

aim. A restriction on access to the courts on the ground of State immunity will

constitute a proportionate means of achieving a legitimate aim where the extent

of the restriction reflects generally recognised rules of public international law

on State immunity:

53. The right of access to a court is not, however, absolute, but may be subject

to limitations; these are permitted by implication since the right of access by

its very nature calls for regulation by the State. In this respect, the Contracting

States enjoy a certain margin of appreciation, although the final decision as

to the observance of the Convention’s requirements rests with the Court. It

must be satisfied that the limitations applied do not restrict or reduce the

access left to the individual in such a way or to such an extent that the very

essence of the right is impaired. Furthermore, a limitation will not be

compatible with Article 6(1) if it does not pursue a legitimate aim and if there

is no reasonable relationship of proportionality between the means employed

and the aim sought to be achieved.

54. The Court must first examine whether the limitation pursued a legitimate

aim. It notes in this connection that sovereign immunity is a concept of

international law developed out of the principle par in parem non habet

imperium, by virtue of which one State shall not be subject to the jurisdiction

of another State. The Court considers that the grant of sovereign immunity to

a State in civil proceedings pursues the legitimate aim of complying with

international law to promote comity and good relations between States

through the respect of another State’s sovereignty.

55. The Court must next assess whether the restriction was proportionate to

the aim pursued. It recalls that the Convention has to be interpreted in the

light of the rules set out in the Vienna Convention of 23 May 1969 on the Law

of Treaties, and that Article 31(3)(c) of that treaty indicates that account is to

be taken of “any relevant rules of international law applicable in the relations

between the parties”. The Convention, in including Article 6, cannot be

interpreted in a vacuum. The Court must be mindful of the Convention’s

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special character as a human rights treaty, and should so far as possible be

interpreted in harmony with other rules of international law of which it forms

a part, including those relating to the grant of State immunity.

56. It follows that measures taken by a High Contracting Party which reflect

generally recognised rules of public international law on State immunity

cannot in principle be regarded as imposing a disproportionate restriction on

the right of access to court as embodied in Article 6(1). Just as the right of

access to court is an inherent part of the fair trial guarantee in that Article, so

some restrictions on access must likewise be regarded as inherent, an example

being those limitations generally accepted by the community of nations as part

of the doctrine of State immunity. [Underlining added]

Al-Adsani v United Kingdom (2002) 34 EHRR 11

25. In issue in Benkharbouche and Janah was whether the blanket immunity conferred

by s. 4(2)(b) and s. 16(1)(a) SIA reflected “generally recognised rules of public

international law on State immunity”.

Findings of the ET and EAT

26. At first instance EJ Deol (Benkharbouche) and EJ Henderson (Janah) found that

Sudan and Libya, respectively, were immune. Both cases were appealed to the

EAT, where the grant of immunity was overturned by President Langstaff.

27. President Langstaff considered that there had been a breach of Article 6 ECHR

insofar as s. 16(1)(a) had been applied to both Claimants’ cases, but left open the

question whether applying s. 4(2)(b) would also infringe Article 6. His view was

that neither provision could be read down in accordance with the duty of consistent

interpretation under s. 3(1) Human Rights Act 19982 (“HRA”), however he did not

have the power to issue a declaration of incompatibility.

28. President Langstaff concluded that the provisions of the SIA were also in conflict

with the right of access to a court under Article 47 EU Charter, which was a general

principle and fundamental right in EU law. To the extent that the employment

rights relied on by Ms Janah and Ms Benkharbouche were within the scope of

rights protected under EU law, the Tribunal was required by the principle of EU

law primacy pursuant to s. 2(1) European Communities Act 1972 to disapply the

infringing provisions of the SIA.

The Court of Appeal’s decision

29. The key question for the Court of Appeal was whether the immunity afforded to

Libya and Sudan by s. 4(2) and/or s. 16(1)(a) SIA was required by international

law, or at least lay within the margin of appreciation accorded to states to determine

the extent of their obligations under international law.

2 S. 3(1) HRA provides: “So far as it is possible to do so, primary legislation and subordinate legislation

must be read and given effect in a way which is compatible with the Convention rights”.

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30. Having conducted a thorough enquiry into the scope of State immunity under

international law, including treaty law and state practice, the Court of Appeal

concluded that the blanket immunity provided by s. 16(1)(a) and s. 4(2)(b) SIA

exceeded the breadth of the immunity required by international law and were not

within the range of tenable views of what is required by international law. In

particular, the Court of Appeal found that international law did not require that

States be afforded immunity in respect of employment claims (other than for

recruitment, renewal or reinstatement) by members of service staff whose work did

not relate to the sovereign functions of embassy staff and who were not nationals

of the State concerned. In effect, ss. 4(2)(b) and 16(1)(a) SIA conferred unqualified

immunity whereas international law required only restrictive immunity.

31. Accordingly, neither provision in its application to the claims of Ms Janah and Ms

Benkharbouche was a proportionate restriction on the right of access to a court and

both were found to be incompatible with Article 6 ECHR. The Court of Appeal

found that s. 4(2)(b) SIA additionally infringed Article 14 ECHR because it was

discriminatory on grounds of nationality.

32. The Court of Appeal agreed with President Langstaff that the infringing provisions

of the SIA could not be read consistently with Article 6 and Article 14 ECHR as

“any attempt to read down these provisions so as to remove immunity would be to

adopt meanings inconsistent with fundamental features of the legislative scheme”.3

The Court of Appeal proposed to issue a declaration pursuant to s. 4(2) HRA4 in

respect of the application of both provisions to the claims of Ms Benkharbouche

and Ms Janah.

33. It was common ground between the parties that, insofar as was relevant to the

Claimants’ cases, the content of Article 47 EU Charter was identical to that of

Article 6 ECHR. It therefore followed that ss. 4(2)(b) and 16(1)(a) SIA also

violated Article 47.

34. The effect of the Court of Appeal’s finding that Article 47 EU Charter has been

breached was more significant in the immediate sense for Ms Janah and Ms

Benkharbouche than its declaration of incompatibility with Article 6 ECHR. The

declaration of incompatibility had no practical effect on the outcome of the

Claimants’ cases, since it does not affect the operation or validity of the SIA unless

and until Parliament legislates to amend or repeal the offending provisions.

However, insofar as ss. 4(2)(b) and 16(1)(a) SIA prevented the Claimants from

accessing a court to bring claims falling within the scope of EU law, the remedy

for breach of Article 47 EU Charter was to disapply those provisions of the SIA,

pursuant to s. 2(1) European Communities Act 1972.5

3 Benkharbouche and Janah, paragraph 67. 4 S. 4(2) HRA provides: “If the court is satisfied that the provision is incompatible with a Convention

right, it may make a declaration of that incompatibility”. 5 S. 2(1) European Communities Act 1972 provides: “All such rights, powers, liabilities, obligations

and restrictions from time to time creates or arising by or under the Treaties, and all such remedies

from time to time provided for by or under the Treaties, as in accordance with the Treaties are without

further enactment to be given legal effect or used in the United Kingdom shall be recognised and

available in law, and be enforced, allowed and followed accordingly and the expression “enforceable

EU right” and similar expressions shall be read as referring to one to which this subsection applies”.

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35. Although both Claimants had brought claims that did not fall within the scope of

EU law, such as unfair dismissal, their claims under the Working Time Regulations

and for race discrimination and harassment were derived from EU legislation. The

Court of Appeal therefore ordered that ss. 4(2)(b) and 16(1)(a) SIA be disapplied

to the extent necessary to enable employment claims (other than for recruitment,

renewal or reinstatement), falling within the scope of EU law by members of the

service staff whose work does not relate to the sovereign functions of the mission

staff, to proceed.

36. The effect of the Court of Appeal’s ruling is to disapply s. 16(1)(a) and s. 4(2)(b)

only in so far they confer absolute, rather than restrictive, immunity in employment

disputes. To this extent, the Court of Appeal’s decision is consistent with the

modern approach to State immunity.

IV. HARRINGTON v USA

37. Harrington v USA, decided in March 2015, related to the exception to the general

statutory immunity contained in s. 16(2) SIA:

(2) This Part of this Act does not apply to proceedings relating to anything

done by or in relation to the armed forces of a State while present in the

United Kingdom and, in particular has effect subject to the Visiting Forces

Act 1952

38. The effect of s. 16(2) is that where the proceedings relate to anything done by or

in relation to the armed forces of a State, both the general statutory immunity and

the exceptions to that immunity under the SIA are disapplied and the issue of

whether a State is immune falls to be determined according to the common law.

The Facts

39. Mr Harrington was engaged by the US Army and Air Force Exchange Service

(“AAFES”), an instrumentality of the US Department of Defence, on a US Air

Force base at Menwith Hill, UK, as a computer technician. AAFES operates a

worldwide system of exchange stores that sell food and other merchandise, duty

free, to members of the US armed forces on active duty and to their dependents.

40. AAFES employs two categories of civilian personnel; the civilian component and

members of the local labour force. The civilian component is comprised of civilian

personnel who accompany the armed forces and is a category defined under the

NATO Status of Forces Agreement (“NATO SOFA”); a member of the civilian

component of the armed forces of a foreign State cannot, pursuant to the NATO

SOFA, be a national or resident of the UK. According to the NATO SOFA and the

Visiting Forces Act 1952 (“VFA”), members of the civilian component are

afforced certain privileges and immunities. Civilian component employees of

AAFES are paid in US Dollars, pay taxes in the US and are subject to US labour

laws. Their terms and conditions of employment are, in material respects, different

from those of the local labour force who are paid in Sterling, pay taxes in the UK

and are subject to UK labour laws.

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41. Mr Harrington, a UK national, was employed as a member of the local labour force.

He brought claims against the USA for direct and indirect discrimination on

grounds of race (nationality). Mr Harrington alleged that he had been subjected to

less favourable treatment than members of the civilian component because of his

nationality and that the dual system of employment put him at a particular

disadvantage when compared with his American colleagues who were members of

the civilian component.

42. The difficulty for the USA in asserting immunity was that the claims arose out of

Mr Harrington’s contract of employment, which had been made in the UK, and the

work done under the contract was to be wholly or partly performed there. The

exception under s. 4(1) SIA to the general statutory immunity was therefore prima

facie engaged. Further, since Mr Harrington was not a national of the USA, was a

national of the UK and the parties had not agreed in writing that the general

statutory immunity would apply, none of the exceptions under s. 4(2) SIA to the

employment exclusion were engaged. On the face of the SIA, the USA was

therefore not immune from suit.

43. However, the USA contended that Mr Harrington’s claims related to acts done by

or in relation to the armed forces of the USA and that as such s. 16(2) SIA was

engaged. Accordingly, it was contended that the issue of immunity fell to be

determined according to the common law rather than the SIA.

Proceedings relating to anything done by or in relation to the armed forces

44. In order for s. 16(2) SIA to bite, the proceedings must relate to anything done by

or in relation to the armed forces. It has been held that s. 16(2) should be interpreted

expansively in this regard:

It is clear that the expression “armed forces” in section 16(2) cannot be

regarded as meaning only military personnel or servicemen and women who

handle weapons and equipment and are in uniform. Regard must be had to the

fact that it is a matter for each state to decide how best to organise its own

armed forces and related services. Holland v Lampen-Wolfe [2000] 1 WLR

1573 per Lord Hope at 1576C

45. The s. 16(2) gateway to the common law is wide and any proceedings concerning

the employment of a person whose work relates to the armed forces will fall within

this provision. Although Mr Harrington’s counsel initially sought to argue that the

work done by AAFES was not something done in relation to the armed forces, this

point was all but conceded in oral submissions. The issue of immunity therefore

fell to be determined according to the common law.

Common law State immunity

46. The common law provides for restrictive State immunity, which distinguishes

between acts carried out in the exercise of a State’s sovereign authority and non-

sovereign (usually commercial) acts of a State. According to the doctrine of

restrictive immunity, a State is afforded immunity only in respect of sovereign acts:

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When therefore a claim is brought against a state […] and state immunity is

claimed, it is necessary to consider what is the relevant act which forms the

basis of the claim: is this, under the old terminology, an act “jure gestionis”

or is it an act “jure imperii”: is it […] a “private act” or is it a “sovereign or

public act”, a private act meaning in this context an act of a private law

character such as a private citizen might have entered into?

I Congreso del Partido [1983] 1 A.C. 244 per Lord Wilberforce at 262F

In relation to the common law as it has now developed the distinction has to

be made between claims arising out of acts done in the exercise of a State’s

sovereign authority and claims not so arising, that is typically claims arising

out of commercial transactions such as might be undertaken by private

individuals […] The “restrictive” theory which through the decisions in The

Philippine Admiral [1977] A.C. 373 and I Congresso del Partido [1983] 1 A.C.

244 has been adopted into the laws of the United Kingdom calls for this

distinction to be made, but it is one which in some cases may be subtle and

delicate to define …

Holland v Lampen-Wolfe, per Lord Clyde at 1579F

47. Where s. 16(2) applies, the key question is therefore whether the act(s) in relation

to which the proceedings are brought can be said to be sovereign acts (acts jure

imperii) or whether they are properly characterised as non-sovereign acts to which

immunity does not attach (acts jure gestionis). In the context of employment

proceedings, this is not a straightforward distinction.

48. In determining whether the act upon which the proceedings are based is jure

imperii or jure gestionis, the Tribunal should have regard to the whole context in

which the case arises, rather than attempting to fit the case within established

categories:

… The solution in any particular case where the question of state immunity

arises at common law has to be one of the analysis of the particular facts

against the whole context in which the have occurred. There is little if anything

to be gained by trying to fit the case into a particular precedent or to devise

categories of situations which may or may not fall on the one side of the line

or the other. It is the nature and character of the activity on which the claim

is based which has to be studied, rather than the motive or purpose of it. The

solution will turn upon an assessment of the particular facts. The line between

sovereign and non-sovereign state activities may sometimes be clear, but in

other cases may well be difficult to draw. In some cases, as was noticed in

United States v Public Service Alliance of Canada 94 ILR 264, 263, even when

the relevant activity has been identified it may have a double aspect, being at

once sovereign and commercial, so that it may then have to be determined

precisely to which aspect the proceedings in question relate. Holland v

Lampen-Wolfe, per Lord Clyde at 1580G

49. The matters relevant to context were considered by Lord Hope in Holland v

Lampen-Wolfe at 1577E:

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Regard must be had to the place where the programme was being provided

and to the persons by whom it was being provided and who it was designed to

benefit – where did it happen and whom did it involve? The provision of the

programme on the base at Menwith Hill was designed to serve the needs of

US personnel on the base, and was provided by US citizens who were working

there on behalf of a US university. The whole activity was designed as part of

the process of maintaining forces and associated civilians on the base by US

personnel to serve the needs of the US military authorities. [Underlining

added]

50. There is no single test or “bright line” for determining what is a sovereign act; a

number of factors may be relevant. In Littrell v United States of America (No 2)

[1995] 1 WLR 82, Lord Hoffman said at 94H-95D:

The context in which the act took place was the maintenance by the United

States of a unit of the United States Air Force in the United Kingdom. This

looks about as imperial an activity as could be imagined. But it would be facile

to regard this context as determinative of the question. Acts done within that

context range from arrangements concerning the flights of the bombers –

plainly jure imperii – to ordering milk for the base from a local dairy or

careless duty driving by off-duty airmen on the roads of Suffolk. Both of the

latter would seem to me to be jure gestionis, fairly within an area of private

law activity. I do not think that there is a single test or ‘bright line’ by which

cases on either side can be distinguished. Rather, there are a number of factors

which may characterise the act as nearer to or further from the central

military activity … In the present case I think that the most important factors

are the answers to the following questions. First, where did it happen? In cases

in which foreign troops are occupying a defined and self-contained area, the

authorities on customary international law attach importance to whether or

not the act was done within the “lines” or “the rayon [radius] of the fortress”

… Secondly, whom did it involve? Acts involving only members of the visiting

forces are less likely to be within the jurisdiction of local municipal courts

than acts involving its own citizens as well. Thirdly, what kind of act was it?

Some acts are wholly military in character, some almost entirely private or

commercial and some in between. [Underlining added]

51. In the context of employment contracts, the nature of the work being performed by

the employee is of particular importance to the issue of immunity:

In a commercial transaction for the sale of goods or for work and materials

the entry into the contract and the performance of it does not involve any

public act by the state and it is irrelevant that the goods supplied or the product

of the work and materials may be used for a public purpose. But it does not

follow that all contracts are necessarily private acts of the state. There may be

cases, particularly in relation to contracts of employment, where the

performance of the contract is itself part of the performance by the state of an

essentially public or sovereign act. In our view it is necessary in each case to

look at what is to be done under the contract in order to decide whether the

entry into, and the performance of, that contract is a private act of the state or

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involves a necessary participation by the other contracting party in a public

act of the state. [Underlining added]

Sengupta v Republic of India [1983] ICR 221 (EAT), per Brown-Wilkinson J

at 226H-227B

52. In addition to the nature of the contract of employment, it is also relevant to

examine the nature of the alleged breach:

… in categorising the nature of this claim it is not enough simply to look at the

underlying contract: one must look also at the nature of the later acts of the

foreign state which give rise to the claim. Sengupta, per Brown-Wilkinson J

at 227G

53. In Sengupta, the EAT set out four key questions to be asked by the Tribunal in

determining whether an act is properly characterised as sovereign:

In our judgment, in seeking to decide whether the claim in this case is excluded

by the doctrine of sovereign immunity, we must ask the following questions:

(a) Was the contract of a kind which a private individual could enter into? (b)

Did the performance of the contract involve the participation of both parties

in the public functions of the foreign state, or was it purely collateral to such

functions? (c) What was the nature of the breach of contract or other act of

the sovereign state giving rise to the proceedings? (d) Will the investigation of

the claim by the tribunal involve investigation into the public or sovereign acts

of the foreign state? [Underlining added]

Sengupta, per Brown-Wilkinson J at 227G-228E

54. In the context of employment disputes relating to work done on foreign military

bases in the UK, the Courts have tended to take a generous approach to what

constitutes the sovereign function:

a. In Holland v Lampen-Wolfe, the Claimant was a US citizen engaged to

teach educational courses for military personnel at a US base in the UK.

She brought a claim in libel against another US citizen, also engaged in the

provision of education to military personnel on the base, in respect of

comments he had made in relation to her professional skills. The USA

asserted immunity on his behalf. The House of Lords held that the provision

of services with the purpose of sustaining morale or promoting mental or

physical well-being amongst the armed forces is an activity on which the

state is engaged in the exercise of its sovereign authority; per Lord Hope at

1576.

b. In Littrel v USA, a US airman who was given medical treatment for asthma

on an US air base in the UK sued the USA in clinical negligence. It was

held that the provision of medical treatment to its service personnel was a

sovereign function of the State.

c. Perhaps most surprisingly, in Hicks v USA 120 ILR 606, a person engaged

to carry out repairs to a bowling alley on a US air base in the UK was said

to be engaged in the sovereign functions of the State because he was

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responsible for ensuring the proper functioning of a leisure facility used by

service personnel.

55. The rationale underlying these decisions is that operating and maintaining an

armed forces is an inherently sovereign act, and education, medical care and leisure

activities are all necessary for the effective operation of a State’s armed forces.

The Tribunal’s Judgment

56. Applying the questions set out in Sengupta at paragraph 54 above to Mr

Harrington’s claim, the Tribunal found against the USA on questions (a), (c) and

(d):

a. The contract of employment with Mr Harrington, as a member of the local

labour force, was of a kind that a private party could enter into. Had he been

employed as a member of the civilian component, the answer to this

question would likely have been different since only a foreign state is able

to employ such persons on the terms set out in the NATO SOFA and VFA;

c. The nature of the alleged breach was a failure to ensure that the terms of

employment for the civilian component and local labour force were

comparable. This was held not to be a sovereign act:

The claim is not that the Claimant should be subject to specific benefits

of US law as well as being subject to UK law. It is accepted that he

cannot be employed under the same type of contract as a member of the

civilian component. The act in question is the alleged failure, within two

separate and distinct contractual regimes, to ensure that the terms of

those contracts are comparable. It is a sovereign act of the legislature

to determine the labour law rights of a state’s own nationals but that

does not mean that the agreement of the individual terms, not prescribed

by that national employment legislation but subject to the ordinary

principles of contract law, is also a sovereign act even where the

contracting employer is the state.

The act giving rise to these proceedings is therefore a private act of the

state, just as was the initial entering into the contract of employment

with the Claimant. [Underlining added]

d. The investigation of Mr Harrington’s claim by the Tribunal would not, in

the Tribunal’s judgment, involve an investigation into the public or

sovereign acts of the USA. This was not an unfair dismissal claim, which

would have required an investigation of the reasonableness of the State’s

decision:

What would be involved in investigating the acts relied upon as giving

rise to this complaint of less favourable treatment does not obviously

involve any enquiry into the operational management of Menwith Hill

which would amount to a threat to the dignity of, nor an interference

with the sovereign function of the USA. The decision as to what should

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or should not be the terms of an employment contract of an essentially

private character and which are not derived from the distinction

between local labour and the civilian component so as to be directly

referable in any way to the NATO SOFA which contemplated that

differentiation, does not impinge on the political character of a state’s

actions simply because that state happens to be a party to the contract.

57. However, question (b) from Sengupta – whether the performance of the contract

involved the participation of both parties in the public functions of the foreign state

or was purely collateral to such functions – was the focus of the Tribunal’s analysis.

58. Firstly, the Tribunal examined the work of AAFES. The Claimant submitted that

the operation of a retail outlet looks like about as commercial an activity as can be

imagined. However, adopting the approach in Holland, Littrell and Hicks (above),

the Tribunal held that although “neither beer nor skittles can be said to be close to

the central military activity of a base”, they were not merely collateral to the

maintenance of the base and were “in conjunction with all other ancillary services,

part of the overall welfare provision.”

59. The Tribunal was also influenced by considerations of security; E J Lancaster held

that if the base at which Mr Harrington was stationed had been in Afghanistan, he

would have had “no hesitation” in concluding that the work done by AAFES was

within the sovereign functions of the State. He went on to acknowledge that

“obviously the situation in North Yorkshire is very different”, but found that the

desire of the USA to make the military base as self-contained as possible, including

by the provision of internal retail facilities, was nevertheless a consideration:

The maintenance of military bases which have the potential to be securely self-

contained when necessary, in which the provision of AAFES facilities within the

perimeter plays a part, however small, is a sovereign activity of the state.

60. On that basis, the Tribunal was satisfied that “the provision and maintenance by

the USA of an AAFES store at Menwith Hill was an act de jure imperii”. The

Tribunal then went on to consider the specific role performed by the Claimant

within AAFES. In Benkharbouche and Janah, the ancillary nature of the role

performed by the claimants was an important factor for the Court of Appeal in

determining that the relevant provisions of the SIA conferred a wider immunity

than that required by international law; the blanket statutory immunity under s.

16(1)(a) SIA did not permit a distinction to be drawn between key embassy staff

and support staff such as cooks or cleaners. In contrast, under the common law, the

Tribunal in Harrington was required to consider the nature of the Claimant’s role

in determining whether the USA was immune from proceedings relating to his

employment.

61. In this regard, it was pertinent that under cross-examination the Claimant accepted

that he had managerial responsibilities within AAFES and was trained to use

software that was central to AAFES’s operation. His duties also extended to

overseeing staff time keeping and recording at other AAFES facilities across the

UK. In light of those facts, and in particular the Claimant’s supervisory

responsibilities, the Tribunal found that “the Claimant was himself engaged in the

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public function of AAFES in a more than purely collateral way” and was “fully

integrated into the nationwide operation of US visiting forces and was in a position

of some trust and confidence.”

62. Although none of the factors in Sengupta are determinative of sovereignty, the

Tribunal found that the fact that the Claimant was himself engaged in the public

functions of the US military was “just sufficient” to warrant a claim of immunity

by the USA. However, EJ Lancaster considered his decision to be “at the very

margins of what is or is not an act jure imperii”.

Distinguishing Benkharbouche

63. Mr Harrington initially sought to argue that the Court of Appeal’s decision in

Benkharbouche and Janah in relation to the immunity conferred under s. 16(1)(a)

SIA could be applied equally to the immunity conferred under s. 16(2) SIA and

that the Tribunal ought accordingly to disapply s. 16(2) and allow his claims to

proceed. The USA successfully defeated this argument on two grounds.

64. Firstly, the immunity conferred by s. 16(2) SIA is much narrower than that of s.

16(1)(a). Unlike s. 16(1)(a), s. 16(2) does not confer blanket, or absolute, immunity

in the category of cases to which it applies. By bringing proceedings within the

common law on State immunity, s. 16(2) SIA confers restrictive immunity that

applies only in cases relating to sovereign acts. As such, the Tribunal accepted that

the Court of Appeal’s ruling in Benkharbouche and Janah in relation to the blanket

immunity under s. 16(1)(a) SIA does not touch upon the compliance with Article

47 EU Charter of the more limited immunity conferred by s. 16(2) SIA.

65. Secondly, Article 47 EU Charter provides for the right to an effective remedy for

violations of rights and freedoms guaranteed by EU law. The Court of Appeal in

Benkharbouche and Janah therefore disapplied ss. 4(2)(b) and 16(1)(a) SIA only

insofar as they related to those parts of the Claimants’ claims that fell within the

scope of EU law. This was limited to the claims of both Claimants under the

Working Time Regulations 1998 and Ms Janah’s claim in respect of racial

discrimination and harassment.

66. Mr Harrington’s claims were in respect of race discrimination on grounds of

nationality. Race discrimination falls within the scope of EU law: Article 3 of

Council Directive 2000/43/EC of 29 June 2009 (“the Racial Equality Directive”)

establishes a general prohibition on grounds of race in relation to, inter alia

employment. However, the Racial Equality Directive expressly excludes from the

prohibition on race discrimination, in employment and other areas within its scope,

discrimination on grounds of nationality6. The Tribunal therefore accepted that Mr

Harrington’s claims did not in any event fall within the scope of EU law and that

consequently there could be no infringement of Article 47 EU Charter in applying

s.16(2) SIA to his claims.

6 Article 3(2) of the Racial Equality Directive provides: “This Directive does not cover difference of

treatment based on nationality...”

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V. CONCLUSION

67. The decision in Benkharbouche and Janah is undoubtedly a significant

development in the law of State immunity in employment disputes. However,

unless and until Parliament legislates to amend the offending provisions of the SIA

they will remain on the statute book. However, Tribunals will be obliged to follow

the Court of Appeal’s lead in disapplying ss. 4(2)(b) and 16(1)(a) SIA to the extent

that they infringe a claimant’s right to access to a court under Article 47 EU

Charter.

68. In practice, this will mean that a State will not enjoy immunity in employment

proceedings unless:

a. At the time when the proceedings are brought the claimant is a national of

the State concerned (s. 4(2)(a) SIA); or

b. At the time when the contract was made the claimant was neither a national

of the United Kingdom nor habitually resident there (s. 4(2)(b) SIA) and

the claimant’s claims do not fall within the scope of EU law; or

c. At the time when the contract was made the claimant was neither a national

of the United Kingdom nor habitually resident there (s. 4(2)(b) SIA) and

the claimant’s claims fall within the scope of EU law; and

i. The claimant’s work relates to the sovereign functions of members of

embassy staff; and/or

ii. The proceedings relate to recruitment, retention or renewal; or

d. The parties to the contract have otherwise agreed in writing (s. 4(2)(c) SIA);

or

e. The claimant is employed within the State’s embassy (s. 16(1)(a) SIA) and

the claimant’s claims do not fall within the scope of EU law: or

f. The claimant is employed within the State’s embassy (s. 16(1)(a) SIA) and

the claimant’s claims fall within the scope of EU law: and

i. The claimant’s work relates to the sovereign functions of members of

embassy staff; and/or

ii. The proceedings relate to recruitment, retention or renewal; or

g. The proceedings relate to something done by or in relation to the armed

forces, in which case the State will only be immune if immunity is conferred

under the common law (s. 16(2) SIA).

69. Where the issue of immunity falls to be determined according to the common law,

because the proceedings relate to anything done by or in relation to the armed

forces, the State will only be afforded immunity where the proceedings relate to a

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sovereign act. This will require an examination of the full context of the

proceedings. In particular:

i. Was the contract of a kind which a private individual could enter

into;

ii. Did the performance of the contract involve the participation of

both parties in the public functions of the foreign state, or was it

purely collateral to such functions;

iii. What was the nature of the breach of contract or other act of the

sovereign state giving rise to the proceedings; and

iv. Will the investigation of the claim by the tribunal involve

investigation into the public or sovereign acts of the foreign

state?