United States Of America v Hicks [1995] UKEAT 1021_94_1107

EAT
United States Of America v Hicks
[1995] UKEAT 1021_94_1107 · 1995-07-11
The question which arises on this appeal, is whether the hiring and firing of a bowling equipment repairer employed by US Airforce at one of their bases in this country, can be characterised as acta jure gestionis i.e. of a private or commercial law character in relation to which the US Government is not immune from suit, or acta jure imperii i.e. in the sphere of public governmental or sovereign activity, which is immune from suit. Following a preliminary hearing on 15th June 1994, the Industrial Tribunal at Bury St Edmunds decided that the US Government were not immune from suit, and therefore they had jurisdiction to hear Mr Hicks' claims of unfair dismissal and for a redundancy payment. The US Government appeal against that decision.

FACTS

The Tribunal found the following facts:
"4 The applicant was employed, in a civilian capacity, as a bowling equipment repairer at RAF Bentwaters, an American air base. The bowling centre is part of a "cantonment" separated by a public road from the highly secure military air field. The facility is (or rather was) part of the Moral Welfare and Recreation service. It was required to be self financing. Profits from one activity might be used to subsidise another activity. However, it was not commercial in the sense of being run for the purpose of profits; its function was to provide a recreation facility for American service personnel and their dependents. In practice, but contrary to regulations, it was used by many of the local inhabitants. A `blind eye' was turned by the relevant authorities, primarily one suspects in the interests of good diplomatic relations with the indigenous population. There are not many 18 lane bowling lane centres in Suffolk. The managers of the centre had been both American and British. However, the ultimate control of all activities at RAF Bentwaters rests with the U.S. Military."
Certain further information was before the Industrial Tribunal which has also been put before us. This shows that, as an employee of the Airforce, Mr Hicks was under the jurisdiction of the Airforce Morale Welfare and Recreation Board. In common with all such employees who were American nationals, his employment was subject to Airforce regulation 40-7. This regulation prescribed in detail the terms of employment for such employees which was made subject to US labour law. Mr Hicks was dismissed with effect from 1st June 1993. The letter of dismissal states that the dismissal:
"... is necessary due to mission completion, budget constraint, the corresponding reduction in staff, and closure of facilities."
The dismissal was in anticipation of closure of the base which took place in September 1993. The letter drew attention to Mr Hick's rights under the terms of his employment, including the fact that he might be entitled to receive severance pay, retirement benefits and other things.

THE LAW

Like the Industrial Tribunal we have been referred to the decision of the Court of Appeal in Littrell v United States of America [1995] 1WLR 82 , and Sengupta v Republic of India [1983] ICR 221. From these two cases the principles of law applicable to this case can be deduced. They are not in dispute. The argument is about their application to the facts of this case. Here:"... the court must consider the whole context in which the claim against the state is made, with a view to deciding whether the relevant acts upon which the claim is based, should, in that context, be considered fairly within an area of activity, trading or commercial, or otherwise of a private law character, in which the state has chosen to engage, or whether the relevant acts should be considered as having been done outside that area, and within the sphere of governmental or sovereign activity."[ Per Lord Wilberforce in Congresso Del Portido [1983] 1 AC 244 at page 267 ]The reason for conferring immunity in the latter case is to enable the foreign government to perform certain acts without undergoing the embarrassment or hindrance of defending the proprietry of such acts before foreign courts.In the Littrell case the court upheld the US Governments' claim to immunity where the claimant alleged that he had been negligently treated at the hospital of a US Air Base in England. He was serving in the U.S. Forces at the time. In his judgment at page 94 Hoffman, LJ, said:
"The context in which the act took place was the maintenance by the United States of a unit of the United States Airforce 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 could range from arrangements concerning the flight of the bombers - plainly jure imperii - to ordering milk for the base from a local dairy or careless 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 Sengupta the applicant was employed as a lowly clerk at the Indian High Commission. This Tribunal upheld the Indian Governments' claim to immunity. In considering the matter the court presided over by Browne-Wilkinson, J, asked itself 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 co-lateral 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?"

THE INDUSTRIAL TRIBUNALS' DECISION

The Industrial Tribunal set out to answer the four questions posed in Sengupta . They focused on question (b). In considering this question they contrasted the position in the instant case with the position in Sengupta saying:
"The applicant was not engaged in the discharge of the sovereign act of a foreign state; the US Airforce is not here to run bowling alleys. The applicant was not employed as an integral part of a military operation. We disagree with the proposition ... that because military personnel are ultimately in charge and that the facility is to provide recreational amenities to its personnel that therefore it is a sovereign act."
However, their reasons do not refer specifically to questions (c) and (d). This omission may be of some significance since it is clear that a court investigating a claim to immunity must consider not only the transaction upon which the claim in founded (in this case the contract of employment) but also the matters giving rise to the claim (in this case the statutory right to a redundancy payment and the statutory wrong of unfair dismissal).

THE ARGUMENT

The appellant argues that the Tribunal took too narrow a view of the nature of the applicants employment. He was engaged, albeit at a lowly level, to provide recreation facilities for United States forces stationed on the base. The disposition of those forces and the recreation facilities available for them in the United Kingdom were part of the sovereign function of the United States. Furthermore the applicant as a United States national was employed subject to Airforce regulations and US labour law. If he is to be given the benefit of United Kingdom labour law as well that will embarrass the United States who might find themselves having to give the benefits of US Labour Law, for example to UK nationals whom they employ on their bases. The decision of the Tribunal interferes with the way in which a sovereign state is required under its own laws to employ its own nationals.On behalf of the respondent it was contended that the applicants' employment was farremoved from the central military activity. The recreational facility did not physically form part of the highly secure military air field, it was self-financing and used by local people. The applicants job was not reserved for American nationals.

DISCUSSION

As in Littrell the context in which the applicants employment took place was the maintenance by the United States of a unit of the United States Airforce in the United Kingdom. The primary purpose of providing recreational facilities for such a unit at its base must be to sustain the effectiveness of its central military activity or capability. The fact that the facilities were intended to be self-financing does not, in our view, mean that their purpose was primarily commercial. By simply saying "the US Airforce is not here to run bowling alleys", we think the Industrial Tribunal underrated these points. Moreover, as we have already pointed out, the Industrial Tribunal do not appear to have considered what would be involved in their investigation of, in particular, the claim of unfair dismissal. On the basis that it was accepted that the reason for the dismissal was that the applicant was redundant, the Tribunal would have had to investigate the question of reasonableness under Section 57(3) of 1978 Act. Should there have been consultation; was the applicant fairly selected for redundancy at the time he was; what possibilities were there for employment on other US bases? Such investigations could well intrude into the public or sovereign acts of the US Government in a way which would be embarrassing. To use the language of the cases: it would amount to a threat to their dignity and an interference with their sovereign function.Of course any private individual can enter into a contract of employment. And there is nothing exceptional about a contract of employment to repair bowling alley equipment. But here, as the contract was between the United States Airforce and a US national, it was subject to the airforce regulations and other US labour laws. To this extent the position of the US Airforce is different from any private contractor.We very much bear in mind that the applicant's role in the provision of recreation facilities for the base was a minor one and this of course does have the effect of distancing him further from the central military activity.We agree with Hoffman, LJ, that there is no "bright line" in these cases. Even if there is, it is not one which is plainly visible in this case. For the reasons which we have attempted to set out above however, we are unanimously of the view that the Industrial Tribunal put this case the wrong side of that line. They did so, we think, because the case was argued before them on too narrow a basis. They focused on the nature of the contract of employment and what was required to perform it without being asked to consider fully what was involved in investigating the acts relied on as giving rise to the claims. So we conclude that this was a case in which the Tribunal did not have jurisdiction because the appellants were immune from suit.We should add that the respondents' fall-back position was that it was only the investigation of the unfair dismissal claim which might cause embarrassment, so the claim for a redundancy payment should be allowed to proceed. We do not agree. Potential embarrassment is not the only reason for our decision. In any event we think it would be undesirable for an Industrial Tribunal to have to pick and choose between claims in cases such as this. Either they have jurisdiction to hear the whole claim or they do not.Like this Tribunal in Sengupta we have considered whether the conclusion we have reached accords with international law/consensus on these matters. Our State Immunity Act 1978 does not apply to the instant case, since the proceedings relate to something done "in relation to the armed forces of" the United States. (Ibid S. 16(2)). But for this exception, the act would confer immunity on the United States since the contract of employment was made with one of their nationals and the base or even its recreational facilities were not maintained for commercial purposes (Ibid S. 4(1), (2) and (3)), These provisions are reflected in the European Convention on State Immunity (Articles 5 and 7) and the draft articles on Jurisdictional Immunities of States and their Properties submitted to the 43rd Session of the International Law Commission after being adopted by its drafting committee (Article 11).

CONCLUSION

This appeal is allowed. The Industrial Tribunal has no jurisdiction over this claim.