UK Supreme Court confirms the limited scope of state and diplomatic immunity from employment claims: Benkharbouche and Reyes

In two judgments handed down on 18 October 2017, the Supreme Court (the "Court") has allowed certain employment claims made by foreign nationals employed as domestic workers at the embassies of foreign states and a diplomat's residence to proceed despite claims of immunity. The judgments consider important aspects of state and diplomatic immunity, the differences between the two, and wider considerations of the interplay between domestic, EU and international law.

In Benkharbouche (Respondent) v Secretary of State for Foreign and Commonwealth Affairs (Appellant) and Secretary of State for Foreign and Commonwealth Affairs and Libya (Appellants) v Janah (Respondent) [2017] UKSC 62, the Court held that certain provisions of the State Immunity Act 1978 ("SIA") barring the claims were not justified by any rule of customary international law and were therefore incompatible with both Article 6 (right to a fair trial) of the European Convention on Human Rights ("ECHR") and Article 47 (right to an effective remedy and to a fair trial) of the EU Charter of Fundamental Rights (the "Charter"). The Court affirmed the Court of Appeal's decision to (i) disapply these provisions of the SIA to the extent that they conflicted with EU law (Article 47 of the Charter), thereby allowing the employment claims that derive from EU law (discrimination, harassment and holiday pay) to proceed, and (ii) to make a declaration of incompatibility in respect of the SIA provisions under Article 6 of the ECHR – this being the only remedy available in respect of the domestic claims not derived from EU law (including unpaid wages and unfair dismissal), which therefore remained barred.

In Reyes (Appellant/Cross Respondent) v Al-Malki and another (Respondents/Cross-Appellants) [2017] UKSC 61, the Court found that a diplomat's immunity after leaving his or her post is limited by Article 39 of the Vienna Convention on Diplomatic Relations 1961 (the "Vienna Convention") to acts performed in the exercise of their diplomatic functions, regardless of whether the diplomat was otherwise entitled to immunity at the time the relevant acts took place. The Court held that the employment and mistreatment of domestic staff does not fall under the category of acts performed in the exercise of diplomatic functions and allowed Ms Reyes' appeal.

Please see here for our previous blog post on both Court of Appeal decisions.

Benkharbouche - Background

The full background to the case is set out in our previous blogpost here.  In summary, Ms Benkharbouche and Ms Janah sought to bring employment claims against the embassies of Sudan and Libya in London where they respectively were employed as domestic workers. Their claims involve allegations relating to failure to pay the National Minimum Wage, breaches of the Working Time Regulations, unfair dismissal, discrimination and harassment.

In the Employment Tribunal, both Sudan and Libya successfully argued that the claims were barred under s16(1)(a) of the SIA – which gives immunity from claims brought by employees of a diplomatic mission – and Libya argued that Ms Janah’s case was also barred under s4(2)(b) of the SIA, which provides immunity from claims from any individual who is not a UK national nor habitually resident in the UK at the time of entering into her employment contract.  The Employment Appeals Tribunal (the "EAT"), however, declared that these provisions of the SIA should be disapplied so far as they prevented the claims being brought based on EU law, on the ground they were contrary to the right of access to a court guaranteed by Article 47 of the Charter. The Court of Appeal affirmed the judgment of the EAT, disapplying the relevant provisions so far as they applied to the EU law claims, and making a declaration of incompatibility affecting all the claims.

Benkharbouche – The Supreme Court's Decision on State Immunity: SIA extends immunity beyond the requirements of customary international law

The "right to a fair trial" under Article 6 of the ECHR is not absolute. Under Article 31(3)(c) of the Vienna Convention on the Law of Treaties, the ECHR is interpreted in the light of "any relevant rules of international law applicable in relations between the parties".  The proper application of the rule of state immunity is justifiable in the context of Article 6 where it is required by customary international law. The question for the Court was therefore whether the statutory provisions conferred immunity beyond that required by customary international law. If they did, such restriction would be necessarily disproportionate and in violation of Article 6 of the ECHR. It was agreed that, for the purposes of the case, a violation of Article 6 would also constitute a violation of Article 47 of the Charter.

The Court held that, as a matter of customary international law, states are immune in respect of employment claims only if the claim "arises out of an inherently sovereign or governmental act of the foreign state" [53]. There is "no basis in customary international law for the application of state immunity in an employment context to acts of a private law character" [63]. The Court acknowledged that it is not always easy to determine which aspects of the facts giving rise to the claim "are decisive of its correct categorisation" as an act in exercise of sovereign authority or a private act, and provided detailed analysis of the circumstances that would be relevant to such a determination.

The provisions of the SIA went further than required by customary international law, by extending immunity to claims brought by (i) nationals or habitual residents of a third country (section 4(2)(b)) and (ii) any employee of a diplomatic mission (section 16(1)(a)), irrespective of the sovereign (or otherwise) character of the act complained of [64, 69]. Following a detailed review of the basis and extent of state immunity in customary international law, the Court held that both sections, having no basis in customary international law, are incompatible with the right to a fair trial provided by Article 6 of the ECHR and the similar right provided by Article 47 of the Charter.

Given that "a conflict between EU law and English domestic law must be resolved in favour of the former", the relevant provisions of the SIA had to be disapplied in order to permit the claims derived from EU law to proceed.  In contrast, the claims based on domestic law were barred, as the remedy for a breach of Article 6 is simply a declaration of incompatibility under the Human Rights Act 1998 [78].

Benkharbouche – Comment

The judgment of the Court contains a welcome and clear review of relevant English, other national and international authorities on the law of state immunity in this context.  The decision in relation to EU law claims is the more practically significant for the parties, as it means that the Sudanese and Libyan embassies are not able to take advantage of the immunity granted to them by the SIA. However, there is no direct impact on the parties of the declaration of incompatibility. There are two ways in which the incompatibility could be addressed. The first is by amending the SIA under s10 and schedule 2 of the HRA to remove the incompatibility. The second is by a wholesale review of the SIA by Parliament to ascertain whether the scope of the immunity it grants is consistent with international law. Such a review could also facilitate ratification by the UK of the UN Convention on Jurisdictional Immunities of States and their Property (2004), as noted by the Court [12]. The consequences of the EU Withdrawal Bill, providing that the Charter will no longer have effect in UK law post-Brexit (see s5(4) EU Withdrawal Bill), will also need to be considered.

Reyes – Background

In Reyes, Ms Reyes, a Philippine national who worked as a domestic servant for Mr and Mrs Al-Malki, sought to bring employment claims against the couple alleging discrimination, unlawful deduction from wages and failure to pay the national wage. Mr Al-Malki was, at the time the claim was first brought, a diplomat at the embassy of Saudi Arabia in London. He claimed diplomatic immunity under Article 31 of the Vienna Convention and his wife claimed immunity as a family member under Article 37. Article 31 provides immunity while the diplomat is in post; this immunity does not extend to "professional or commercial activity".  Mr Al-Malki left his diplomatic posting on 29 August 2014, and therefore the focus in the Court (the point was not taken in the courts below) was the scope of the residual immunity under Article 39 once the posting had ended.  Article 39 provides that, after the posting has ended, immunity is only retained in respect of acts which had been performed in the exercise of functions as a member of the mission.

Reyes – The Court's Decision on Diplomatic Immunity

• Residual immunity after leaving post under Article 39(2) of the Vienna Convention did not extend to employment of domestic staff for household tasks and childcare

Pursuant to Article 39(2) of the Vienna Convention,the Court held that Mr Al-Malki – no longer being in post – enjoyed residual immunity only in respect of acts undertaken in the exercise of his official functions. These were held not to include “the employment of domestic staff to do the cleaning, help in the kitchen and look after his children”, which were activities which were not done on behalf of Saudi Arabia [48]. It did not matter that Mr Al-Malki and his wife were in post and therefore entitled to the wider Article 31 immunity when the relevant acts took place and when the proceedings were commenced, because diplomatic immunity is a procedural immunity falling to be determined at the time of the hearing – it does not affect the merits of the underlying claim [49].

The Court also confirmed that service of a claim form by post does not violate a diplomat's immunity, either as to their person or premises. This is because it neither "detains him, impedes his movement or subjects him to any personal restriction or indignity" nor does it involve "an agent of the state [entering his premises] without consent" or impede "access to or from the premises or normal use of them" [16].

• Was employment of an allegedly trafficked individual a "professional or commercial activity" such that immunity would have been denied while in post under Art 31(1)(c) of the Vienna Convention?

As the appeal was decided on the basis of Article 39(2) of the Vienna Convention, the Court was not required to rule on whether the exception to immunity in Article 31(1)(c), for "professional and commercial activity" outside of official functions, applied . The Court of Appeal had ruled that it did not, rejecting the argument that if, as claimed (but disputed), Ms Reyes had been the victim of human trafficking, Mr Al-Malki's act of employing a trafficked individual could constitute a "professional or commercial activity".

The Court nevertheless provided certain views on the Court of Appeal's finding, emphasising that they were obiter and non-binding. The Court noted that a professional or commercial activity connoted a course of business rather than a one-off purchase or act, in effect someone "setting up shop." Two of the five judges were of the opinion that Mr Al-Malki would have been immune notwithstanding Ms Reyes having been trafficked. Lords Sumption and Neuberger acknowledged the "growing concern of international law with human trafficking" [41] but did not consider that the wording of Article 31(1)(c) could be interpreted to include 'customers' of human trafficking, in part because the history of negotiations in drawing up the Convention showed the narrow scope of activities intended to be captured [43].They emphasised that procedural immunity does not impinge upon the wrongfulness or illegality of the underlying actions, and cited examples of immunity being available in cases involving torture and crimes against humanity [44]. Conversely, the remaining three judges (Lord Wilson, Lady Hale and Lord Clarke) doubted that the 'customer' of human trafficking could so easily be separated from the overall activity of human trafficking [62], or that the Vienna Convention could not be interpreted according to "the natural development of the meaning of an article in accordance with the development of international law" [67].  The precise scope of diplomatic immunity in post in this regard, in particular whether trafficked domestic workers may still be able to bring a claim, therefore remains a grey area.

Reyes – Comment

The Court's judgment in Reyes serves as an important reminder that the scope of immunities may be construed narrowly, and therefore careful consideration must be given as to whether particular acts truly constitute the exercise of diplomatic functions. It is now clear that the employment and treatment of a domestic worker, with tasks such as Ms Reyes had, do not. However, the same may not be true of other employment relationships and, as the Court acknowledged, "[d]ifficult questions of fact may arise when a private servant is employed in a diplomat's residence for purposes connected with the work of the mission." [48].

The decision in this case also reflects an important difference between state immunity and diplomatic immunity: diplomatic immunity is a practical necessity to allow the proper functioning of diplomatic missions, whereas state immunity is grounded in the inherent equality of sovereign states. This has two practical implications: (1) diplomats enjoy a greater scope of immunity while in post than after leaving, and (2) the scope of diplomatic immunity while in post is wider than the equivalent immunities granted to states. For example, whereas a state is not immune under customary international law in respect of private, rather than sovereign, acts (see Benkharbouche), a diplomat in post is immune under Article 31 of the Vienna Convention in respect of private acts outside his or her official functions provided that such acts do not relate to any professional or commercial activity (or relate to the other two narrowly prescribed exceptions of immovable property or succession set out in Article 31(1)(a) and (b)).

For further information, please contact Andrew Cannon, Partner, Joel Halliday, Associate, Hannah Ambrose, Professional Support Consultant, Anna Henderson, Professional Support Consultant, Vanessa Naish, Professional Support Consultant, or your usual Herbert Smith Freehills contact.