Alhayali: “Sufficiently Close” Is a Tribunal Fact‑Evaluation, Not a Pure Question of Law, in Embassy Employment Immunity; Doubts Cast on Aziz and on Using s.5 to Bypass s.4

Alhayali: “Sufficiently Close” Is a Tribunal Fact‑Evaluation, Not a Pure Question of Law, in Embassy Employment Immunity; Doubts Cast on Aziz and on Using s.5 to Bypass s.4

Introduction

In Royal Embassy of Saudi Arabia (Cultural Bureau) v Alhayali [2025] EWCA Civ 1162, the Court of Appeal (Bean and Coulson LJJ and the President of the Family Division) has delivered an important judgment at the intersection of state immunity and employment law. The case concerns a former employee of the Saudi Cultural Bureau in London, Ms Abir Alhayali, who brought EU-derived discrimination claims in the Employment Tribunal (ET). The Embassy asserted immunity under the State Immunity Act 1978 (SIA).

Three preliminary issues were identified below: (i) “waiver” (whether the Embassy had submitted to the tribunal’s jurisdiction), (ii) “section 4” (whether the employment claims as a whole were barred by sovereign immunity), and (iii) “section 5” (whether a claim for psychiatric injury could proceed under the personal injury exception). The ET found for the claimant on all three. The Employment Appeal Tribunal (EAT) partially reversed, holding the ET had erred on the section 4 issue and remitting the waiver issue. On further appeal, the Court of Appeal restores the ET’s section 4 decision and, although the waiver point became academic, delivers strong obiter concerns about the Court of Appeal’s earlier decision in Republic of Yemen v Aziz on waiver. The Court also clarifies the scope of the section 5 “personal injury” exception in light of Shehabi v Bahrain, and signals that Ogbonna may be wrong to allow section 5 to operate as a workaround to the structured scheme governing embassy employment claims.

Summary of the Judgment

  • Section 4 (employment claims): The Court of Appeal allows Ms Alhayali’s appeal and restores the ET’s conclusion that the Embassy is not immune. The governing test from Benkharbouche—whether the employee’s functions were “sufficiently close” to sovereign authority—was properly applied by the ET. The EAT erred in treating the closeness determination as a single “right or wrong” question of law rather than an evaluative judgment for the ET on the established facts.
  • Appellate standard: The “sufficiently close” inquiry for administrative/technical embassy staff is an evaluative fact-assessment. The EAT’s jurisdiction is limited to errors of law; there is no free-standing right to relitigate the evaluation simply because the case is “borderline.”
  • Section 5 (personal injury): Following Shehabi, psychiatric injury falls within “personal injury” for SIA s.5. However, Bean LJ (obiter) considers Ogbonna likely wrong insofar as it allows employees who are otherwise barred by s.4/s.16 to circumvent that scheme by styling discrimination claims as “personal injury.”
  • Waiver of immunity (s.2 SIA): Although now academic, the Court expresses serious reservations about Republic of Yemen v Aziz, suggesting that deemed submission under s.2(3) is an objective inquiry into steps taken in proceedings and should not turn solely on proof of actual authority from the head of mission.
  • Outcome: The Court of Appeal sets aside the EAT’s decision on s.4 and restores the ET’s order; the waiver remittal is set aside as academic; comments on s.5 and Aziz are obiter.

Background and Procedural History

Ms Alhayali worked for the Cultural Bureau from 2013 to January 2018 in roles including Academic Adviser and later in Cultural Affairs. She assisted with student support processes (via the “Safeer” system), collating documents for approvals, preparing reports for senior officials, and practical arrangements for cultural events. She never held decision-making authority and was not in management.

In January 2018 she brought ET claims including unfair dismissal, breach of contract, unlawful deductions, and discrimination (disability, sex, belief), harassment, and victimisation. After directions, and following the Embassy’s acceptance that the tribunal had jurisdiction over EU-law derived claims (email of 9 April 2019), the claimant withdrew purely domestic claims, consistent with the scheme in Benkharbouche.

Litigation progressed for over two years. In August 2021 the Embassy sought to reassert immunity, contending no valid submission to jurisdiction had been authorised under SIA s.2(7). After a two-day preliminary hearing, the ET found: (i) the Embassy had submitted to jurisdiction; (ii) the employment claims were not barred by immunity under s.4 (applying Benkharbouche); and (iii) the psychiatric injury claim could proceed under s.5.

The EAT permitted a full appeal on multiple grounds. Ultimately, it (i) remitted the waiver issue for re-determination, (ii) held the ET had erred on s.4 (finding some functions were sufficiently close to sovereign authority), and (iii) affirmed the ET on s.5, following Ogbonna. Both parties appealed to the Court of Appeal. Bean LJ’s leading judgment addresses s.4 and s.5, with the waiver issue becoming academic once s.4 was resolved against the Embassy.

Detailed Analysis

1) Precedents and Authorities Cited

  • Benkharbouche v Embassy of the Republic of Sudan; Janah v Libya [2017] UKSC 62; [2019] AC 277
    • Supreme Court’s foundational decision: State immunity for employment claims is compatible with Article 6 ECHR only insofar as it reflects customary international law. For embassy staff, the dividing line is between acts jure imperii (sovereign/governmental) and jure gestionis (private/commercial).
    • Lord Sumption’s structured framework:
      • Diplomatic agents: inherently sovereign; employment claims likely immune.
      • Administrative/technical staff: generally ancillary/supportive; immunity only where functions are “sufficiently close” to sovereign functions (e.g., cipher clerks; confidential secretaries).
      • Domestic staff: almost never sovereign; claims typically not immune.
    • Two additional points: some sovereign interests (e.g., national security dismissals) may confer immunity even if the employment contract itself is non-sovereign; territorial connections can also matter in the broader analysis.
  • Constantine v Royal Embassy of Saudi Arabia (Cultural Bureau) [2025] UKSC 9; [2025] 1 WLR 1207
    • Supreme Court reaffirmed that Benkharbouche governs embassy employment immunity issues and approved an ET decision by the same employment judge in this case (EJ Brown). The case also addressed how the Court of Appeal should proceed when a state appellant does not appear, but did not depart from Benkharbouche’s substantive principles.
  • Cudak v Lithuania (ECtHR)
    • Administrative tasks such as operating a switchboard, typing, faxing, and basic event assistance were not shown to be related to sovereign interests; no immunity. The CA cautions against using Cudak as a mechanical precedent, yet its functional analysis remains instructive.
  • Governor of Pitcairn and Associated Islands v Sutton [1995] 1 NZLR 426 (NZ CA)
    • Confidential secretarial services intimately connected to governmental communications (typing instructions between senior government officials) may be sufficiently close to sovereign authority; an oft-cited example of where admin/technical staff fall on the immunity side of the line.
  • Saudi Arabia v Nelson 507 US 349 (1993) and El-Hadad v UAE 216 F 3d 29 (DC Cir, 2000)
    • US jurisprudence, addressing the commercial activity exception and focusing on whether the employment relationship entails an exercise of sovereign authority. Nationality is not determinative; functions are.
  • Jurisdictional Immunities of the State (ICJ)
    • Emphasises the territorial sovereignty of the forum state and the exceptional nature of state immunity as a departure from ordinary jurisdictional principles.
  • Mahamdia v Algeria (CJEU, Case C‑154/11)
    • No immunity where the employee’s functions do not entail the exercise of public powers; supports the functional approach in Benkharbouche.
  • Federal Republic of Nigeria v Ogbonna [2012] 1 WLR 139 (EAT)
    • Held that s.4 (employment) and s.5 (personal injury) are separable exceptions and that “personal injury” includes psychiatric injury. The present Court accepts the latter post-Shehabi, but Bean LJ doubts (obiter) the separability analysis insofar as it allows s.5 to bypass s.4/s.16 for embassy staff.
  • Shehabi v Kingdom of Bahrain [2024] EWCA Civ 1158; [2025] 2 WLR 467
    • Court of Appeal confirms that psychiatric injury is “personal injury” under s.5 SIA, even as a standalone injury. Ogbonna’s reading on this point is endorsed; however, Shehabi was not an employment case and thus does not resolve the s.4/s.5 interaction for embassy employment disputes.
  • Republic of Yemen v Aziz [2005] ICR 1391; [2005] EWCA Civ 745
    • Suggests waiver requires actual authority from the head of mission (or someone he/she has authorised). The present Court voices concerns, indicating that deemed submission under s.2(3) is an objective analysis of steps taken in proceedings and should not be defeated by ex post assertions of lack of internal authority.
  • Webster v USA [2022] EAT 92; [2022] IRLR 836
    • EAT (Tayler J) recognised that identifying where an admin/technical employee sits on the “sovereign/non-sovereign” line is an inherently factual assessment for the ET—an approach endorsed by the Court of Appeal in the present case.

2) The Court’s Legal Reasoning

(a) Section 4 SIA: Applying Benkharbouche’s “Sufficiently Close” Test to Actual Job Functions

The Court of Appeal places the Benkharbouche framework at the centre of the analysis. For administrative/technical staff, the key inquiry is whether the employee’s functions were “sufficiently close” to sovereign authority. The tribunal’s primary findings (unchallenged on appeal) established that:

  • The claimant was not in a leadership or management role; she had no decision-making power.
  • Her tasks were practical, clerical, and supportive: checking documentation, forwarding requests to decision-makers, preparing summaries, proof-reading, and assisting with event logistics and notifications.
  • Her correspondence externally was confined to practical arrangements concerning students and universities; she was not privy to confidential communications between senior officials.

On those facts, the ET concluded the work was ancillary/supportive and not “sufficiently close” to the exercise of sovereign authority. Bean LJ endorses that approach as precisely aligned with Lord Sumption’s guidance. Importantly, the Court rejects an expansive view (adopted by the EAT) that the mere fact the department itself discharges Vienna Convention functions (e.g., protecting nationals, promoting culture) is enough; placing a non-decision-making employee within such a department does not itself prove closeness to sovereign authority.

The Court also rejects the EAT’s proposition that there can only ever be “one correct legal outcome” on closeness once facts are found. In a “borderline and difficult” case, closeness is a multi-factor evaluative judgment for the ET. The EAT’s jurisdiction does not permit substituting its own evaluation absent a demonstrable error of law or perversity in the tribunal’s reasoning.

(b) Appellate Standard: Closeness Is an Evaluative Judgment, Not a Binary Question of Law

Echoing Webster v USA, the Court stresses that determining whether an admin/technical employee is sufficiently close to sovereign activity is an evaluative fact-assessment. The EAT therefore erred by treating the tribunal’s conclusion as if it were a pure question of law with a single “right” answer. The Court emphasises:

  • Primary findings of fact by the ET are not to be disturbed on appeal unless perverse (no suggestion of that here).
  • Where a tribunal applies the correct legal test to those primary facts, its evaluative conclusion will stand absent an identifiable error of law.

(c) Section 5 SIA (Personal Injury): Psychiatric Injury Qualifies, but s.5 Is Cause-of-Action Based (Obiter)

Two points emerge:

  • Following Shehabi, a standalone psychiatric injury is “personal injury” under s.5. The Court records the Embassy’s recognition that this point is authoritatively settled at Court of Appeal level.
  • However, the Court is sceptical (obiter) of Ogbonna’s effect of allowing s.5 to work as a bypass of the structured employment immunity regime (s.4 read with s.16) for embassy staff. Bean LJ reasons that s.5 is properly tied to the cause of action (e.g., negligence causing a chandelier to fall), not the type of damage pleaded within an employment discrimination claim. Allowing a discrimination claim by mission staff to proceed simply because it includes psychiatric harm would “drive a coach and horses” through the SIA’s carefully calibrated scheme.

The Court’s hypothetical is striking: if an embassy chandelier falls and injures a person (employee or visitor), s.5 applies straightforwardly—no immunity. But if the core complaint is discrimination or other employment wrongs by a mission against its staff, then the s.4/s.16 scheme governs; labelling the injury as psychiatric does not convert the claim into a s.5 case. While obiter, this signals a likely future alignment limiting Ogbonna’s reach on the interaction between s.4 and s.5.

(d) Waiver of Immunity Under s.2 SIA: Aziz Questioned (Obiter)

Although the waiver issue became academic once the claimant succeeded on s.4, the Court addresses the Embassy’s late assertion that its solicitors lacked authority to submit to jurisdiction in 2019:

  • Aziz suggests a step taken by solicitors only amounts to waiver if authorised by the head of mission (or authorised delegate), rejecting ostensible authority/estoppel against the state.
  • The Court expresses unease with this approach. Bean LJ highlights the practical unfairness of allowing a state to litigate for years only to disown its solicitors’ acts. Coulson LJ adds that deemed submission under s.2(3) is an objective test—akin to s.4 of the Arbitration Act 1950—asking whether the state has taken steps in the proceedings that impliedly affirm litigation in the forum, not whether the head of mission subjectively authorised them.
  • The panel (including the President) agrees that Aziz warrants reconsideration. The Court also notes that states wishing to avoid intrusive scrutiny of their internal authorisation processes should ensure clear, “readily ascertainable” procedures for waiver, echoing Aziz itself.

While obiter, this reorientation—from subjective authority to objective conduct—could have far-reaching consequences for procedural fairness and efficiency in cases involving foreign states.

3) Why the Claimant’s Functions Were Not “Sufficiently Close”

The Court underscores the narrowness of the Benkharbouche “close to sovereign functions” category for admin/technical staff. Classic examples (cipher clerks; confidential secretaries) share features absent here:

  • Direct handling of sensitive or confidential diplomatic communications;
  • Proximity to the decision-making core of sovereign acts;
  • Trusted participation in the formation or execution of governmental policy or instructions.

By contrast, Ms Alhayali:

  • Performed routine clerical and logistical tasks;
  • Did not draft or transmit confidential policy communications;
  • Had no authority to decide funding or approvals; she collated, summarized, and forwarded information to those who did.

The EAT’s suggestion that “outward-facing” activities (e.g., discussing art exhibits) suffice would, the Court warns, cast the immunity net “very widely indeed,” inconsistent with the careful limits articulated in Benkharbouche and the Strasbourg jurisprudence.

Impact and Implications

A) For Employment Tribunals and Appellate Courts

  • The “sufficiently close” inquiry for admin/technical embassy staff is a fact-sensitive evaluation for the tribunal. Appellate bodies must respect that role and intervene only for identifiable errors of law.
  • Tribunals should make clear, granular findings on:
    • Decision-making authority (or absence thereof);
    • Access to and handling of confidential diplomatic materials;
    • Proximity to sovereign functions (e.g., security, policy formation, confidential communications);
    • Whether the employee’s tasks are routine, clerical, logistical, or “private administration.”
  • Placing an employee within a department that advances Vienna Convention functions (protecting nationals, promoting culture) is not determinative; what matters is what the employee actually did.

B) For Foreign Missions and Their Legal Advisors

  • Routine, non-confidential, non-decision-making roles are unlikely to attract immunity; missions should calibrate expectations accordingly and manage litigation risk for such staff.
  • On waiver, the Court’s obiter signals that Aziz may be revisited. Missions should:
    • Implement and document clear, internal authorisation protocols for solicitors engaging with UK proceedings;
    • Raise immunity promptly and unambiguously, avoiding conduct consistent with submission;
    • Recognise that years of participation may be viewed as “steps in the proceedings” under s.2(3) irrespective of internal authorisation disputes.

C) For Practitioners Advancing or Resisting Immunity

  • Evidence is king. Detail the employee’s actual tasks, decision-making latitude, confidentiality, and any involvement in core diplomatic functions. Avoid abstractions tied solely to departmental labels or Vienna Convention headings.
  • Where immunity is asserted based on “sovereign interests” (e.g., national security dismissals), explain and evidence the nexus; the mere context of an embassy is insufficient.
  • On s.5, pleadings and causes of action matter. After Shehabi, psychiatric injury is “personal injury,” but the Court’s obiter here cautions against using s.5 to repackage employment discrimination claims by mission staff.

D) Doctrinal Trajectory

  • Benkharbouche remains the touchstone; Constantine confirms no retrenchment at Supreme Court level.
  • The Remedial Order 2023 (which removes s.4(6) in amended form) “makes no difference” to the applicable law here, but future cases will likely continue to implement Benkharbouche’s functional, fact-specific approach.
  • Expect a future appellate opportunity to reconsider Aziz. The Court’s unanimity in questioning it indicates a likely shift toward an objective, conduct-based analysis of deemed submission under s.2(3).
  • Ogbonna’s interaction between s.4 and s.5 is likely to be refined so that s.5 cannot undermine the employment-specific scheme where s.16 exclusions apply to mission staff.

Complex Concepts Simplified

  • State immunity (SIA 1978 s.1): Default rule that foreign states are immune from UK court jurisdiction, subject to statutory exceptions.
  • jure imperii vs jure gestionis: Acts done in the exercise of sovereign/governmental authority (immunity) versus private/commercial acts (no immunity).
  • Section 4 (contracts of employment): Generally removes immunity for employment claims, but in the embassy context the courts superimpose Benkharbouche’s customary international law filter: immunity persists if the employee’s functions are “sufficiently close” to sovereign authority (especially for diplomatic agents; sometimes for admin/technical staff).
  • Section 5 (personal injury): No immunity for claims “in respect of death or personal injury” caused by acts/omissions in the UK. After Shehabi, this includes standalone psychiatric injury. The present Court indicates s.5 is cause-of-action based, not a device to sidestep employment immunities.
  • Section 16(1)(a): Preserves diplomatic privileges. In practice, this interacts with s.4 for embassy employment claims involving “members of a mission.”
  • “Sufficiently close” test: For admin/technical staff, ask whether the employee’s actual functions closely engage sovereign authority (e.g., handling confidential diplomatic communications; policy formation; security-sensitive tasks). Routine clerical/logistical support is usually not enough.
  • Submission to jurisdiction (s.2): A state may waive immunity expressly, or be deemed to have submitted if it takes steps in proceedings (other than steps solely to claim immunity). The Court questions Aziz’s strict requirement for proof of the head of mission’s actual authority for all such steps.
  • Evaluative judgment: A fact-sensitive determination made by the tribunal (here, whether functions are “sufficiently close”). Appellate interference is limited to legal error.

Conclusion

Alhayali delivers two central messages. First, and most importantly, it reaffirms that the Benkharbouche “sufficiently close” inquiry is a granular, function-by-function evaluation for the ET to perform on the concrete facts of the employee’s work. The EAT erred in transforming that multifactor analysis into a single, binary question of law. On the tribunal’s careful findings here—routine, clerical, and logistical support with no decision-making and no confidential diplomatic communications—the Embassy’s immunity defence failed.

Second, the Court provides consequential guidance with prospective significance. It accepts, following Shehabi, that psychiatric injury falls within s.5, but cautions (obiter) against using s.5 to circumvent the structured scheme governing embassy employment claims. And while leaving the waiver issue academic in this case, the Court’s collective doubts about Aziz signal an important potential realignment: deemed submission under s.2(3) should be an objective assessment of conduct in proceedings, not a shield behind which a state can later disavow its own apparent participation through technical assertions of internal lack of authority.

In the broader landscape, Alhayali consolidates Benkharbouche’s functional approach, protects tribunals’ evaluative role, and promotes procedural fairness in cases involving foreign states. For missions, practitioners, and tribunals alike, it sharpens the focus on what embassy employees actually do—and cautions that routine administrative support, however “outward-facing,” will rarely suffice to cloak employment disputes with sovereign immunity.

Case Details

Year: 2025
Court: England and Wales Court of Appeal (Civil Division)

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