If you work for an embassy in London and are not a UK national, you cannot sue your employing state when you get unfairly dismissed. But if you enter a commercial contract with the same embassy, you can sue them.
This is the conundrum which faced the Supreme Court, who decided that the former result, although laid down by statute, was incompatible with Article 6 of the ECHR.
The SC’s sole judgment was by Lord Sumption, with whom the other justices agreed. It is a tour de force of international (rather than human rights) law, because therein lay the key issue.
Ms Benkharbouche and Ms Janah brought employment law claims against, respectively, the Sudanese and Libyan embassies. They claimed for unfair dismissal and for failure to pay the minimum wage, relying on domestic law. They also relied on the Working Time Regulations 1998, derived from EU law. The embassies relied upon state immunity under the State Immunity Act 1978.
The decisions below
Both employment tribunals found that there was immunity from the claims. The Employment Appeal Tribunal, Langstaff J (see Rosalind’s post here), reversed both ET decisions, and held that the absolute immunity provided by the State Immunity Act 1978 breached the claimants’ rights of access to justice under Article 6 of the Convention.He felt unable to interpret the Act so as to render it compatible with the Convention, in line with s.3 HRA, and, because he sat in a tribunal, he lacked jurisdiction to make a declaration of incompatibility under s.4 HRA. He went on to find that Article 47 of the EU Charter (the Charter’s equivalent of Article 6) required him to disapply the Act with respect to the EU law claims, which could therefore proceed.
Section 1(1) of the State Immunity Act 1978 provides foreign states with a general immunity from suit before the UK courts. Section 3 and 4 provided exceptions, with s.3 for ordinary commercial transactions and section for contracts of employment – but s.4(2)(b) provides an exception to the general immunity whereby the employee of a foreign state cannot bring a claim in the UK if they are neither (1) a UK national, nor (2) habitually resident in the UK at the time the contract was formed.
Ms. Janah did not satisfy the second criterion in s.4(2)(b), while Ms. Benkharbouche’s status in this regard had not been determined by the EAT.
Both their claims were blocked by s.16(1)(a) of the 1978 Act. This affords a foreign state immunity in respect of employment law claims brought by any member of the staff of its diplomatic mission to the UK, including service staff who unlike, say, diplomats, cannot be said to participate in the foreign state’s sovereign functions.
The Court of Appeal agreed with Langstaff J, and also granted a declaration of incompatibility: see Diarmuid Laffan’s post here. It found a breach of the EU Charter upon which the employees could rely.
The Supreme Court
Curiously, neither state appeared before the Supreme Court. Sudan had ducked out before the Court of Appeal, and Libya did not comply with an order for security for costs, so it was not allowed to pursue the appeal. But the baton was taken up by the Foreign Office, arguing for state immunity.
At  to , Lord Sumption summarises the Strasbourg case law which says that Article 6 is engaged in the case of procedural bars, but does not overcome the substantive law of a country. He points out the difficulties with this supposedly neat dichotomy, touching on concepts such as limitation, foreign act of state, lack of jurisdiction, lack of a duty of care and the like.
But these are not refinements with which the Strasbourg court has traditionally been concerned. What the Strasbourg court means by a procedural rule is a rule which, whether technically procedural or substantive in character, has the effect of barring a claim for reasons which do not go to its legal merits; that is to say, rules which do not define the existence or extent of any legal obligation.
Strasbourg has decided that state immunity is procedural, and thus Article 6 is engaged.
But that is not the end of it, as the Strasbourg Court has grappled with a number of employee/embassy disputes over the years, upholding some immunity pleas and overriding others.
Lord Sumption’s summary is at : the ECtHR
has always held that the proper application of the rule of state immunity was justifiable because it was derived from a fundamental principle of international law. The only cases in which it has ever held article 6 to have been violated are those in which it has found that a claim to state immunity was unfounded in international law.
It has held that in the absence of a recognised rule of customary international law, Article 6 is satisfied if the rule applied by a Convention state lies within the range of possible rules consistent with current international standards.
Hence Lord Sumption’s review of customary international law, starting at ; for such a rule, one needs to establish that there is a
widespread, representative and consistent practice of states
on the point in question, which is accepted by those states on the footing that it is a legal obligation.
The Secretary of State argued that there is no sufficient consensus on the application of state immunity in this field so as to found such a rule of customary international law.
Lord Sumption disagreed; unless international law requires the UK to treat these claims as immune, the denial of the claims violates Article 6: .
The review encompasses existing UN and European Conventions, and decisions in US, Germany, France, Belgium, Spain, Portugal, and Japan – briefly Russia, and absolutist China, and a historical view of shifting perspectives away from absolute immunity towards restricted immunity. The reason for the shift over time is not surprising: 
What has happened is that governments, courts and writers of authority have been prompted by the widening scope of state operations and their extension into commerce and industry, to re-examine the true basis of a doctrine originally formulated at a time when states by and large confined their operations in other countries to the classic exercises of sovereign authority. The true basis of the doctrine was and is the equality of sovereigns, and that never did warrant immunity extending beyond what sovereigns did in their capacity as such.
Lord Sumption drew three conclusions from his review.
1. There has never been sufficient consensus in favour of the absolute doctrine.
2. The only consensus in recent times has been in favour of a restrictive doctrine.
3. The adoption of the restrictive doctrine has not been by accumulating exceptions to the absolute doctrine, as distinct from a more fundamental re-examination of the rationale as the scope of state operations widened.
He considered the problem posed by two conventions which adopted a rule close to s.4(2)(b) of the 1978 Act. The 2004 UN Convention on Jurisdictional Immunities for States and their Properties 2004 is broadly consistent with the 1978 Act. The UK signed but not ratified it. Only 28 states (not including Libya or Sudan) have signed it, of which 21 have ratified it. It does not come into force until 30 states have ratified it. The Convention contains an analogue of s.4(2)(b) of the 1978 Act in Article 11(2)(e).
But this Convention did not override the underlying customary law.
The starting point for this conclusion was the retreat from nineteenth century absolute state immunity to a more restrictive doctrine emerging, in the UK, in the 1970s. The distinction was between sovereign acts (in the latin, jure imperii), and private acts (jure gestionis). And you might think that employing a cleaner or housekeeper would intuitively fall into the latter rather than the former.
The nub of the point was articulated by Lord Sumption at 
The rule of customary international law is that a state is entitled to immunity only in respect of acts done in the exercise of sovereign authority. In the absence of a special rule to some different effect applicable to employees in the position of Ms Janah and Ms Benkharbouche, that is the default position.
He then () moved to contracts of employment at the international level. Diplomatic agents are fundamentally governmental; administrative staff may be ancillary, unless, possibly, they were cypher clerks or confidential members of staff. But he could not see how domestic staff could be anything other than private acts. The recent Strasbourg cases turned on whether the applicant’s employment called for a personal involvement in the diplomatic or political operations of the mission, or only in such activities as might be carried on by private persons.
After this excursus, he turned to the 1978 Act. Consistently with the above, he concluded that it
can be regarded as giving effect to customary international law only so far as it distinguishes between exercises of sovereign authority and acts of a private law character, and requires immunity to be conferred on the former but not the latter. 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.
He was not swayed by the European Convention on State Immunity. Whilst 8 parties including the UK are party to it, and other nations have similar legislation, its adoption was not sufficiently widespread, representative and consistent. Unlike the Convention, the general practice of states is to apply the classic distinction between sovereign and private acts, irrespective of the nationality or residence of the claimant.
Indeed, the courts of a significant number of jurisdictions have refused to apply the immunity as between states which are not both party to the Convention, unless they performed functions directly related to the exercise of the state’s sovereign authority, on the ground that the requirements of general international law differed on this point from those of the Convention:
and he cited Austrian, Italian, Belgian, Swiss, German, Norwegian and Dutch cases to that effect: .
I conclude that section 4(2)(b) of the State Immunity Act 1978 is not justified by any binding principle of international law.
Hence, s.4(2)(b) was a violation of Article 6.
A similar conclusion was reached about s.16(1)(a) of the 1978 Act, in the light of Article 11 of the UN Convention referred to above. The fact of Article 11 (set out at ) did not establish an international consensus capable of amounting to a rule of customary international law corresponding to s.16(1)(a): 
Hence the employment of our cleaner and housekeeper: 
were clearly not exercises of sovereign authority, and nothing about their alleged treatment engaged the sovereign interests of their employers. Nor are they seeking reinstatement in a way that would restrict the right of their employers to decide who is to be employed in their diplomatic missions. As a matter of customary international law, therefore, their employers are not entitled to immunity as regards these claims.
So both provisions in the 1978 Act were incompatible with Article 6.
After this expansive treatment of the relevant international law, Lord Sumption was very brisk with the rest of the case. Discrimination under Article 14 added nothing to the Article 6 case (), nor did Article 47 of the EU Charter (over which the Court of Appeal had laboured long and hard): 
But readers tackling these cases for the first time should not overlook the overall effect of EU law. EU law displaced automatically the statutory immunity bars on the claims for discrimination, harassment and breach of the Working Time Regulations. Failure to pay the minimum wage and unfair dismissal were incompatible with the ECHR.
The result was that both cases were remitted to the Employment Tribunal to determine the claims based on EU law on their merits: 
A declaration of incompatibility under the HRA cannot get money for a claimant, though it may lead to a change in the law. But an EU claim overriding a domestic statute can do so, whether directly because of some EU overriding law or, as here, because international law operated through EU law.
Brexit will bring a new twist to this – in the present circumstances, a human rights breach without a remedy for the particular claimants, unless the politicians step in. Don’t somehow think that this will be high on the governmental list of deficiencies to be resolved by exercise of the Henry VIII clause in the Withdrawal Bill: see my post here.
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