Jonathan Davies represents Spanish Embassy in diplomatic and state immunity appeal

The Employment Appeal Tribunal, Ellenbogen J presiding, has handed down its judgment in the case of Lorenzo v the Kingdom of Spain. Jonathan Davies represented the Kingdom of Spain, the appellant. Ms Lorenzo’s claim, in essence, was that she was treated less favourably by her manger because of her British nationality and harassed through comments about the differences between British and Spanish people (she does in fact have both British and Spanish nationality). 

Lorenzo v the Kingdom of Spain full judgment.

Until the seminal judgment of the Supreme Court in Benkharbouche v Secretary of State for Foreign and Commonwealth Affairs and another case 2017 ICR 1327, claims against diplomatic missions were simple affairs. Section 16(1) of the State Immunity Act 1978 expressly prevented them. However, in Benkharbouche, through the court’s application of European Law, that clear rule preventing claims became a qualified rule. There has been a slew of decisions since then which have sought to define the boundary between those claims which are now permitted and those which are still not, of which Lorenzo is the latest. The law in this area is highly technical (depending on exceptions to exceptions to exceptions to the rule) and the arguments made on both sides in Lorenzo are set out with clarity in the decision itself which is a must read for anyone who is advising in such claims. The Employment Lawyers Association has provided an excellent analysis of that detail which can be found here.

The distinguishing features of Lorenzo from other recent decisions is that:

• the argument made on behalf of the Kingdom of Spain that it should be able to rely on Diplomatic Immunity as an alternative to State Immunity;
• the Claimant had the nationality of the sending state of the diplomatic mission (which is relevant to application of State Immunity.  She also had British nationality as she was a dual national.  The application of Benkharbouche to Section 4(2)(a) of the State Immunity Act 1978 which excludes claimants who have the same nationality as the sending state from brining claims was therefore in play; 
• the consideration of whether the status of the Claimant’s employment (i.e. was the entering into the contract of employment itself a sovereign act) is the sole determinant of whether state immunity can be relied upon or whether the acts that form the subject of the claim also need to be considered, whether in alternative to the status of employment or in conjunction with it.

The rules of diplomatic immunity on the facts of this case were more favourable to the Kingdom of Spain than those of State Immunity. In very broad terms, in a case against a diplomatic mission, under State Immunity the status of the Claimant is the driving factor subject then (as confirmed in the EAT’s judgment) to the nature of the allegations made: do they impinge on things done pursuant to sovereign authority? Under diplomatic immunity the status of the person against whom the allegations are made is the driving factor subject (immunity depends on the status of the person against whom the allegation is made under the Vienna Convention) then to whether the acts were done pursuant to the sovereign authority. The EAT rejected the submission that the state, if sued, could rely on diplomatic immunity essentially limiting the plea of diplomatic immunity to claims made against a diplomat personally.   

In Benkharbouche, the Supreme Court commented on a possible exclusion of the effect of its judgment on nationals of the sending state. In paragraph 61 of Benkharbouche, Lord Sumption said: 'Section 4(2)(a) extends the immunity to claims against the employing state by its own nationals. As I have said, this may have a sound basis in customary international law, but does not arise here'. The EAT adverted to difficulties in unravelling the basis of this statement in the judgment of the Supreme Court. However, Ellenbogen J concluded that the principles the Supreme Court applied in Benkharbouche to Section 4(2)(b) should apply in this case. 

The EAT ruled that in determining whether State Immunity applies, an employment tribunal must make its decision by reference to the pleaded facts which includes considering the nature of the acts which are the subject of the claim. Of note is that with effect from 23 February 2023, Section 16 of the State Immunity Act has been amended by the State Immunity Act 1978 (Remedial) Order 2023 in effect to codify the decision in Benkharbouche. The amendment applies to a cause of action that arose on or after 18 October 2017. In such cases, Section 16 of the State Immunity Act 1978 now clarifies that in order to determine whether State Immunity applies the Employment Tribunal has not just to consider the employment status of the Claimant but also whether the conduct complained of was done in the exercise of sovereign authority.  

The Remedial Order also gives effect to the declaration of incompatibility made in Benkharbouche. A domestic claim such as unfair dismissal or unlawful deduction of wages can now be brought against a diplomatic mission as long as the sending state is not a party to the European Convention on State Immunity (Austria, Belgium, Cyprus, Germany, Luxembourg, Netherlands, Switzerland, and the United Kingdom).  

The practical consequences of the EAT’s judgment in Lorenzo are these:

• The plea of diplomatic immunity is very unlikely to be of any practical value in an employment claim against a diplomatic mission (although the EAT rejected in terms the submission the plea was otiose).  However, it is difficult to think of a case where the employee cannot evade the effects of diplomatic immunity by naming the State, as opposed to the diplomatic mission or the employing Ambassador or High Commissioner as respondent. To those unfamiliar with the technicalities of this area of the law this statement may seem surprising; however, that is the consequence of this decision.  The only situation in which diplomatic immunity would be relevant is where in a discrimination claim the employee exercises his or her right to sue the alleged discriminator personally (see paragraph 30 of judgment).   However, the test for immunity in such a case will differ as between the sending state and the individual.   In the former case, it will depend on the status of the employee in the embassy in accordance with the Vienna Convention as interpreted by Benkharbouche or modified by the State Immunity Act 1978 (Remedial) Order 2023 (unless the sending state is a party to the European Convention on State Immunity, and then whether the acts complained of relate to something done pursuant to sovereign authority.  In the latter case, it will depend on the status of the individual respondent in accordance with the Vienna Convention (unaffected by anything said in Benkharbouche) and then whether the acts complained of relates to something done pursuant to sovereign authority.    It is entirely possible that immunity in relation to the same allegation could apply to the state, but not the individual or vice-versa;  
• The comments in Benkharbouche supporting the idea that sending states should not be sued by their own nationals cannot be relied upon.  The EAT determined that the acts complained of were of a private nature and there was no evidence before it in support of a rule of customary international law to that effect; 
• In considering the plea of State Immunity, an employment tribunal should have close regard to the nature of the allegations made in the ET1 and determine whether they question an act done pursuant to sovereign authority.   It is the pleaded case that matters. Under the statutory reversal of the burden of proof an employer can be required to prove a non-discriminatory reason for its conduct.   Diplomatic missions who are sued for discrimination should bear this in mind when drafting their defences.  It may not be apparent on the face of the allegation that a sovereign act is involved; however, it may be apparent from the non-discriminatory reason for the conduct.  If the reason relates to sovereign matters (such as restricting access to information to its own nationals for security reasons), these should be clearly pleaded.    A further consequence of this is that immunity will have to be considered by reference each allegation rather than the whole claim itself.  The question of immunity is not a question of ‘all or nothing’ but may be partial depending on the allegations made.  What the judgment does not expressly resolve is the extent to which a diplomatic mission is required to give evidence in support of its assertion that sovereign matters are involved: to require it to do so would seem to defeat the purpose of the immunity. 

Ms Lorenzo was an administrative and technical worker under the terms of the Vienna Convention. She worked ‘within the doors of the embassy’. In that regard her role was very different to that of the cook and domestic worker in Benkharbouche. What is clear from this judgment which was said to flow from Benkharbouche is British nationals who work in foreign embassies can complain they have been treated less favourably than co-workers from the sending state on the basis of their nationality. This may seem surprising given the nature and purpose of a diplomatic mission: to represent the interests of one nation state hopefully in co-operation with but potentially in conflict with the interests of the hosting state. It might be thought that the kinds of employment claim that ought to be precluded in order to enable diplomatic missions to carry out  their diplomatic functions are claims premised on differential treatment of foreign and local staff based on their nationality and those which require the foreign staff’s comments about the host nation to be aired and justified in public. Indeed, the law as it now stands may be a disincentive to employ staff who are not nationals of the sending state. Such a policy would of course of itself be subject to challenge subject to the kind of arguments made in Benkharbouche under Article 7 of the Vienna Convention which provides the embassy has a right to freely appoint its staff. 

Jonathan Davies is an experienced employment practitioner and is available to take instructions in state and diplomatic immunity cases or to provide training relating to these issues. 

18th Dec 2023

Jonathan Davies

Call 2003