Introduction

The case Kingdom of Spain v Lorenzo ([2024] EWCA Civ 1602) marks a significant development in the intersection of state immunity and employment discrimination law within the United Kingdom. The dispute revolves around Lydia Lorenzo, a dual national (British and Spanish), who worked for the Spanish Embassy in London. After her resignation in 2015, Ms. Lorenzo filed an employment tribunal claim alleging constructive unfair dismissal, failure to provide a written statement of her employment contract, direct racial discrimination based on nationality, and harassment on similar grounds. The central legal contention was whether the Kingdom of Spain could invoke state or diplomatic immunity to shield itself from these claims under the Equality Act 2010. This commentary delves into the comprehensive judgment delivered by the Court of Appeal, exploring its implications for state immunity and employment law.

Summary of the Judgment

The Employment Tribunal initially ruled that while the Kingdom of Spain was entitled to immunity under the Employment Rights Act 1996 and Employment Act 2002, it could not claim sovereign or diplomatic immunity under the Equality Act 2010. Spain appealed this decision to the Employment Appeal Tribunal (EAT), which dismissed their appeal, affirming the Tribunal's stance. Subsequently, Spain escalated the matter to the Court of Appeal. The Court of Appeal, reinforcing the EAT's decision, held that Section 4(2)(a) of the State Immunity Act 1978 does not apply to Ms. Lorenzo's claims under the Equality Act 2010. This decision aligns with the Supreme Court's precedent set in Benkharbouche v Embassy of the Republic of Sudan; Janah v Libya, which curtailed the scope of state immunity in employment-related claims.

Analysis

Precedents Cited

The judgment extensively references the landmark Supreme Court decision in Benkharbouche v Embassy of the Republic of Sudan; Janah v Libya [2017] UKSC 62. In Benkharbouche, the Supreme Court determined that customary international law does not support broad state immunity in employment contexts, especially where claims pertain to discrimination and harassment. This case emphasized that state immunity should be restricted to acts of a sovereign or governmental nature, excluding private law matters such as employment disputes. Additionally, the judgment cites the Vienna Convention on Diplomatic Relations (1961), particularly distinguishing between diplomatic agents, administrative and technical staff, and domestic service staff, establishing boundaries for immunity claims based on employment roles.

Legal Reasoning

The Court of Appeal's reasoning hinges on the differentiation between acts jure imperii (sovereign acts) and acts jure gestionis (private law acts). The court affirmed that unless the employment-related claims arise from sovereign functions, state immunity should not be automatically invoked. In Ms. Lorenzo's case, her role as an Administrative Assistant and Protocol Officer did not entail direct involvement in the Spanish state's sovereign functions. The court also noted the significance of her dual nationality and permanent residency in the UK, aligning with international opinions that immunity should not extend to locally recruited staff serving in non-sovereign capacities.

Furthermore, the court examined the 2023 Remedial Order, which amended the State Immunity Act 1978 in response to the Benkharbouche decision. The Order clarified that immunity does not apply to employment-related disputes unless they stem from sovereign activities. Applying this to Ms. Lorenzo's claims under the Equality Act 2010, the court determined that such discrimination and harassment claims do not fall within the scope of state immunity.

Impact

This judgment has profound implications for the application of state immunity in the UK, particularly concerning employment and discrimination law. It reinforces the precedent that state immunity is not a blanket shield for all employment-related claims, especially those under the Equality Act 2010. Future cases involving employment disputes with foreign states will likely follow this precedent, limiting the scope of immunity and enhancing the enforceability of employment rights against state entities. Additionally, this decision underscores the importance of distinguishing between different categories of embassy staff when considering immunity claims.

Complex Concepts Simplified

State Immunity

State immunity refers to the legal doctrine that a sovereign state cannot be sued in the courts of another sovereign state without its consent. It distinguishes between acts that are governmental (sovereign) and those that are of a private or commercial nature.

Acts Jure Imperii vs. Acts Jure Gestionis

- Acts jure imperii: These are acts performed by a state in its sovereign capacity, such as legislation, military actions, or diplomatic negotiations. These acts are generally protected under state immunity.
- Acts jure gestionis: These are acts of a private or commercial nature, like contractual agreements, employment disputes, or business transactions. These acts are not protected under state immunity and can be subject to litigation.

Equality Act 2010

The Equality Act 2010 is a comprehensive piece of legislation in the UK aimed at eliminating discrimination and promoting equality across various protected characteristics, including race, nationality, gender, disability, and more.

Conclusion

The Court of Appeal's decision in Kingdom of Spain v Lorenzo marks a pivotal moment in UK law concerning state immunity and employment discrimination. By affirming that state immunity does not extend to employment-related discrimination claims under the Equality Act 2010, the court has narrowed the scope of state immunity, thereby enhancing the protective mechanisms available to employees against discriminatory practices by foreign state employers. This judgment not only fortifies the rights enshrined in the Equality Act but also aligns UK law with evolving international norms regarding state immunity and employment rights. Consequently, this case serves as a crucial precedent for future litigation, ensuring that state entities cannot evade accountability in matters of discrimination and unfair employment practices.