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2 December 2015 0 Comments
Posted in Employment, Opinion

Collective redundancy consultation rules apply to closure of US Military base

Author headshot image Posted by , Partner

In a case which has been running for many years, USA v Nolan, the Supreme Court has ruled that the collective redundancy consultation obligations under section 188 of TULR(C)A applied to dismissals which resulted from the closure of a US military base in the UK. Although the ECJ has ruled that the EU Collective Redundancies Directive does not apply to workers of public administrative bodies, such as the civilian employees affected in this case, this was no reason to read an exemption into the clear provisions of TULR(C)A.

The crux of this case concerned the point at which the duty to collectively consult arose. The Employment Tribunal, upheld by the EAT, considered that civilian employees had not been collectively consulted with under TULR(C)A when a watercraft repair centre run by the USA was closed, resulting in redundancies. Consequently the individual concerned received a protective award. When the matter was sent to the Court of Appeal, it decided that a ruling from the ECJ was needed to clarify the point at which the consultation obligation actually arose and therefore the point at which the provisions of TULR(C)A are engaged. The question was whether the duty arose when the strategic decision to close the centre was initially proposed, in the knowledge that this would lead to redundancies, or the point at which that decision was actually taken. Helpfully, the ECJ did not answer this question, ruling only that the Directive did not cover the dismissal of staff at a foreign military base and so it was not appropriate for it to rule on a question which related to a public administrative establishment to which the Directive did not apply.

Consequently the Court of Appeal directed a further hearing on the question of when the consultation obligations arose, referring purely to the domestic provisions. This decision was appealed by the USA to the Supreme Court. This case has been rumbling on since the original dismissals for redundancy in 2006 – and now the Supreme Court has held that TULR(C)A does apply to the closure of a military base such as the one in this situation even though this situation was not something which would have been foreseen when the legislation was drafted. It considered that this factor was no reason for reading an exemption into legislation which did not distinguish between different parts of TULR(C)A within or outside the EU’s internal market competence. The legislation clearly covers redundancies in England, Wales and Scotland, and the UK was not seeking to legislate extra-territorially.

The upshot was that TULR(C)A does apply to the closure of the military base and as such the Supreme Court has remitted the case back to the Court of Appeal to decide the point at which the duty to consult arises.

No doubt this case will rumble on for another several years…

This legal update is provided for general information purposes only and should not be applied to specific circumstances without prior consultation with us.

For further details on any of the issues covered in this update please contact Gemma Ospedale, Partner in Employment on 020 7583 2222.

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