Precarious Employment? Varying Approaches to Foreign Sovereign Immunity in Labor Disputes

• Author: Richard Garnett
• Position: Richard Garnett is Professor of Law at the University of Melbourne, Australia and Consultant in international litigation and arbitration at Herbert Smith Freehills.
• Pages: 25-46

Precarious Employment? Varying Approaches to

Foreign Sovereign Immunity in Labor Disputes

R

ICHARD

G

ARNETT

*

I. Introduction

In 1998, I completed the first major article in the United States on the

application of the rules of foreign sovereign immunity in employment

disputes.

1

Typically, immunity is pleaded by a foreign state as a defense to a

claim for unfair dismissal, unpaid wages, or sex discrimination by an

employee of the state. A successful plea of immunity will result in the

employee’s case being dismissed without the merits being investigated.

Immunity can, therefore, be a powerful weapon in the hands of a foreign

state in thwarting the vindication of employee rights.

In the 1998 article, it was found that U.S. courts have taken varying

approaches to the question of foreign sovereign immunity with occasionally

inconsistent results on similar facts. The aim of the present article is to

review the decisions of the past two decades to assess whether a clearer

position has emerged on the rights of foreign state employees. While the

earlier article examined disputes arising from employment in all foreign

state-owned enterprises, both within and outside the United States, the

present discussion focuses predominantly on employment taking place in the

United States in embassies, consulates, and other foreign state organizations

responsible for implementing government policy. Disputes arising from

these types of employment are not only the most common but also often the

most controversial.

II. The Legislative Regime

Before considering the recent decisions, the relevant legislation must first

be examined. In the United States, foreign sovereign immunity is governed

by the Foreign Sovereign Immunities Act of 1976 (FSIA), which gives a

general grant of immunity to foreign states subject to exceptions. For the

purposes of this study, the key exception is found in Section 1605(a)(2)(1) of

the FSIA which removes immunity where the action is “based upon a

commercial activity carried on in the United States” by the foreign state.

2

* Richard Garnett is Professor of Law at the University of Melbourne, Australia and

Consultant in international litigation and arbitration at Herbert Smith Freehills.

1. Richard L. Garnett, The Perils of Working for a Foreign Government: Foreign Sovereign

Immunity and Employment, 29 C

AL

. W. I

NT

’

L

L. J. 133 (1998).

2. Foreign Sovereign Immunities Act, 28 U.S.C.A. § 1605(a)(2) (1976).

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PUBLISHED IN COOPERATION WITH

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26 THE INTERNATIONAL LAWYER [VOL. 51, NO. 1

In considering whether the commercial activity exception is satisfied in an

employment situation, U.S. courts have relied upon four approaches, which

are also noticeable in the jurisprudence of other countries.

3

The first approach involves situations where courts and legislative bodies

have focused on the context or location of the employment. Where a person

is employed in a highly sovereign context such as an embassy, regardless of

the employee’s level or capacity, the forum state should grant immunity to

the foreign sovereign. The basis for such immunity is that any inquiry into

activities at such a place necessarily would intrude upon the foreign state’s

sovereignty. By contrast, where a person is employed in an organization

whose nature and functions are identical to corporations in the private

sector, a plea of foreign sovereign immunity rarely should be available

because no sensitive governmental concerns are implicated.

A second approach to employment claims by foreign states has paid

particular attention to the status and duties of the employee. A finding of

immunity should be more likely where the plaintiff employee is in a senior,

policy-oriented position because he or she is closer to the sovereign “core”

of the foreign state. But where an employee is engaged in routine, purely

operational duties, or in work that is highly similar to that performed by

persons in private corporations, a grant of immunity would not be

appropriate. This analysis, focusing on the functions and role of the

employee, is advocated in this Article as the best method for protecting the

rights of both employer and employee and because it arguably now

represents the customary international law standard applied in the majority

of nation states.

4

A third approach to resolving immunity pleas in employment actions

focuses on the territorial connection between the forum, the employee, and

the employment contract. A number of national immunity statutes,

including the FSIA, expressly require a territorial connection between the

claim and the forum of adjudication before jurisdiction can be exercised.

5

In

3. For analyses of the position in other jurisdictions, see Julia Brower, State Practice on

Sovereign Immunity in Employment Disputes Involving Embassy and Consular Staff, C

ENTER FOR

G

LOBAL

L

EGAL

C

HALLENGES

(Dec. 19, 2015), https://law.yale.edu/system/files/

state_immunity_in_employment_disputes.pdf; Richard L. Garnett, The Precarious Position of

Embassy and Consular Employees in the United Kingdom, 54 I

NT

’

L

& C

OMP

L. Q. 705 (2005);

Richard L. Garnett, State and Diplomatic Immunity and Employment Rights: European Law to the

Rescue?, 64 I

NT

’

L

& C

OMP

. L. Q. 783 (2015); Richard L. Garnett, State Immunity in Employment

Matters, 46 I

NT

’

L

& C

OMP

. L. Q. 81 (1997); Richard L. Garnett, State Immunity and

Employment Relations in Canada, 18 C

ANADIAN

L

AB

. & E

MP

. L. J. 643 (2014), http://

heinonline.org/HOL/Page?handle=hein.journals/canlemj18&div=25&g_sent=1&casa_token=&

collection=journals. The issue has particularly attracted the attention of European scholars. See,

e.g., Philippa Webb, The Immunity of States, Diplomats and International Organisations in

Employment Disputes: The New Human Rights Dilemma?, 27 E

UROPEAN

J. I

NT

’

L

L. 745 (2016);

Andrew Sanger, State Immunity and the Right of Access to a Court under the EU Charter of

Fundamental Rights, 65 I

NT

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L

& C

OMP

. L. Q. 213 (2016).

4. See Brower, supra note 3, at 784.

5. See 28 U.S.C.A. § 1605(a)(2).

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AN ANNUAL PUBLICATION OF THE ABA/SECTION OF INTERNATIONAL LAW

PUBLISHED IN COOPERATION WITH

SMU DEDMAN SCHOOL OF LAW