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

The post below was first published on our PIL blog

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.
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EU releases notice for stakeholders to prepare for company law changes post-Brexit

The EU has released a Notice to Stakeholders that warns EU company law will no longer apply in the UK after Brexit. The main points it raises are:

  • UK incorporated companies will become third country companies and branches in EU-27 Member States of UK incorporated companies will become branches of third country companies
  • Member States may not be obliged to recognise the legal personality (and the protections that flow from it) of companies which are incorporated in the UK but have their central administration or principal place of business in the EU
  • EU law on disclosure, incorporation, capital maintenance and alteration, and cross-border mergers will no longer apply. However as these are currently enshrined in UK company law, there would be no change on exit unless and until those UK provisions are amended.
  • The UK business register will not be connected to the business registers interconnection system and the way information is obtained will be different.

If you think these company law changes may have consequences for your business, get in touch and we can guide you through these issues.

New Taxation (Cross-border Trade) Bill introduced in UK Parliament

The UK Government introduced the Taxation (Cross-border Trade) Bill, previously known as the Customs Bill, to Parliament yesterday, in order to provide for the creation of a standalone UK customs regime. Negotiations between the UK and the EU are still focused on withdrawal and have not yet moved onto trade.  However, this new Bill, once passed, will allow the UK Government to charge customs on specified goods and set preferential or additional duties in certain circumstances, e.g. to provide protection against unfair trade or to support developing countries by offering preferential treatment.  The Bill complements the Trade Bill which was introduced to Parliament on 7 November and which will put in place the necessary framework for an independent trade policy for the UK outside the EU.

Read the full news story here.

UK Government announces new key Bill relating to Withdrawal Agreement

The UK Government has announced that a new Bill will be released which will, once passed, enshrine the Withdrawal Agreement between the UK and the EU into UK law. This new Bill will ensure that the major policy decisions made in the Withdrawal Agreement are scrutinised by parliament before being made UK law. Before this announcement it was unclear as to whether the Withdrawal Agreement would be made into UK law via secondary legislation using the European Union (Withdrawal) Bill 2017-19. The Bill is expected to include major policy issues such as financial settlements, citizens’ rights and the implementation period.

Click here to read the full press release made by the UK Government regarding this new Bill.

New Trade Bill published

The UK Government has published a new Trade Bill which aims to ensure that the UK has the necessary tools in place to operate its own trade policy once it leaves the EU.  The Bill includes provisions for the UK to implement existing EU trade agreements in order to provide continuity for businesses and consumers, by preserving the non-tariff elements of existing EU trade agreements to which the UK is currently party as an EU Member State.  It also provides for the UK to become an independent member of the Agreement on Government Procurement (GPA) which will continue to give UK businesses access to tenders for government contracts in 47 countries.  A new independent trade remedies body,  the Trade Remedies Authority (TRA), is being created to protect UK businesses from unfair trade practices such as dumping by other countries. The Bill will be complemented by a new Customs Bill, due to be published shortly, which will allow the Government to create a standalone customs regime and amend the VAT and excise regimes.

Banks, Brexit and what’s next?

The global financial crisis in 2008 and the slump that followed were predicted to change the face of international banking, mark a retreat from globalism and result in much tighter regulation of institutions.

The last is undoubtedly true, particularly in the European Union, as this region still struggles to deal with an overhang of bad debt and ailing banks. Overall, however, the reality is that international financial activity, fuelled by technological advances, trade movements and the flows of capital produced by “quantitative easing” policies of central banks, has continued apace as the US economy has recovered and Asian banks have taken more international positions.

Will this change in the foreseeable future? What are the key drivers and, in particular, how will the UK’s decision to leave the EU – Brexit – affect the sector both in the UK, the rest of Europe and elsewhere?

As the EU’s avalanche of banking regulation continues a pace and the US talks about dismantling parts of Dodd-Frank, we question whether the overall impact will strengthen the EU’s financial centres or result in more banking activity elsewhere. Continue reading

The Brexit negotiations – the view from Brussels on developments in October

The Brexit debate often looks different viewed from Brussels rather than from London. It is however important for businesses to also keep in mind the Brussels perspective and therefore we publish a monthly view from our Brussels office on recent developments and the state of the negotiations.

In this second issue of ‘The view from Brussels’, we focus on the outcome of the recent European Council meeting and also take a closer look at the issues relating to the financial settlement, which is currently the main obstacle to progress in the first phase of the negotiations.

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