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When is exploitation a “commercial activity”? Supreme Court decides Basfar v Wong
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Does exploiting a domestic worker through human trafficking and modern slavery constitute “exercising” a “commercial activity” for the purposes of the Vienna Convention on Diplomatic Relations 1961 such that it falls within the exception to a diplomat’s immunity from civil suit? When this arose several years ago in Al-Malki v Reyes  UKSC 61, the Supreme Court did not find it necessary to decide the question. Basfar v Wong  UKSC 20, decided today, raised the issue again.
Ms Wong, a migrant domestic worker, brought an employment tribunal claim for wages and breaches of employment rights against Mr Basfar, a member of the diplomatic staff of the mission of the Kingdom of Saudi Arabia. He applied to have the claim struck out on the ground that he is immune from civil suit because of his diplomatic status; she countered that her alleged exploitation fell within the exception to immunity set out in article 31(1)(c) of the 1961 Convention:
A diplomatic agent shall enjoy… immunity from [the receiving State’s] civil and administrative jurisdiction, except in the case of:
an action relating to any professional or commercial activity exercised by the diplomatic agent in the receiving State outside his official functions.
The court held that employing a domestic worker does not itself constitute the exercise of a “commercial activity” by a diplomatic agent within the meaning of the exception [paragraph 27]. But the majority (Lord Briggs and Lord Leggatt in a joint opinion, with which Lord Stephens agreed) held that keeping a person in circumstances of “modern slavery” could not reasonably be equated with the ordinary hiring of a domestic employee. It represents an abuse of the diplomat’s presence in the receiving state . They allowed the appeal and reinstated the judgment of the employment tribunal refusing to strike out the claim. Lord Hamblen and Lady Rose dissented.
Whether the employment tribunal will decide that Ms Wong was trafficked or a victim of modern slavery remains to be seen. Since the court heard oral argument, the Home Office has issued a “conclusive grounds” decision finding that Ms Wong was a victim of modern slavery .
Exploitation of domestic worker a “commercial activity”
The three judges in the majority highlighted Article 42 of the 1961 Convention: “A diplomatic agent shall not in the receiving state practise for personal profit any professional or commercial activity”. They were satisfied that, on the assumed facts, Mr Basfar’s exploitation of Ms Wong was undertaken for his personal profit, and held:
On the assumed facts, Mr Basfar and his family enjoyed the benefit of Ms Wong’s services for almost two years, initially for a fraction of her contractual entitlement to wages and latterly for no pay at all. That was a substantial financial benefit. The deliberate and continuing course of conduct by which that benefit was gained is in our view properly characterised as the exercise of a commercial activity. 
The majority distinguished ordinary domestic employment arrangements which are incidental to the daily life of a diplomat in the receiving state from the exploitation of a domestic worker for profit, holding that the latter amounts to a “commercial activity” when practised by a diplomatic agent. On the assumed facts, Mr Basfar had saved the difference between the pittance Ms Wong received and what he would have had to pay her on the open market, adopting the approach used by the International Labour Organization. Rejecting Marx’s theory of the appropriation of “surplus value”, the majority focused on the distinction between the voluntary exchange of labour for reward and work exacted through coercion [paragraph 63]. It held:
On any view there is a fundamental factual as well as moral difference between voluntary employment and slavery and between ordinary domestic service and domestic servitude… to draw the distinction in interpreting and applying an international convention, it is appropriate to derive those criteria from rules of international law applicable in the relations between the parties. This is the respect, and in our view the only respect, in which rules of international law relating to trafficking and other contemporary forms of slavery are relevant. 
Lord Hamblen and Lady Rose took issue with this at paragraph 163 of their dissenting opinion:
Many people in the UK and elsewhere work long, anti-social hours in unpleasant conditions doing menial work for low pay and having to put up with rude, bullying employers. They cannot afford to leave their jobs; they have families to feed and bills to pay and the alternatives open to them are very limited and unlikely to be much better. But they are not generally regarded as ‘slaves’ or as working in ‘forced servitude’.
Lord Hamblen and Lady Rose agreed with Lord Sumption in Al-Malki v Reyes at paragraph 51 that “there is no sense which can reasonably be given to article 31(1)(c) which would make the consumption of goods and services the exercise of a commercial activity”. They contended that the conditions under which a person is employed or how they came to be employed cannot convert employment which is not of itself a “commercial activity” into such an activity falling within the exception . They also warned of practical difficulties with the opinion of the majority: in defining trafficking and the breadth of the definition, in the intrusive nature of the fact-finding enquiry to determine whether the exemption applied, the scope of the exemption, and the risk to UK diplomats if the exception were expanded.
Special vulnerability of migrant workers
At paragraphs 44 to 51, the court gave careful consideration to the factors which make migrant domestic workers especially vulnerable to abuse. In doing so, it drew on evidence submitted for the first intervenor, Kalayaan (of which I am chair of trustees, and which also intervened in Reyes) and by the second intervenor, the United Nations Special Rapporteur on Trafficking in Persons especially Women and Children. Both the majority and the dissenting opinions gave detailed consideration to jurisprudence from the United States, Canada and Australia and to academic work, including Eileen Denza’s Diplomatic Law: Commentary on the Vienna Convention on Diplomatic Relations, 4th ed (2016). The opinions also tackle principles of treaty interpretation, and the distinctions between slavery, servitude, forced labour and trafficking, (the majority succinctly summarising the debate between Dr Gallagher and Dr Stoyanova at paragraphs 94-95).
The court recalled that an activity’s being illegal under international law or violating human rights does not make it a “commercial activity” [paragraph 71]. Counsel for Ms Wong did not pursue the arguments based on UK domestic law principles of statutory interpretation, or on Articles 4 and 6 of the European Convention on Human Rights, which were rejected in Reyes. The second intervenor, the Special Rapporteur, did so in her written intervention; the court gave this short shrift, affirming Reyes .
The court heard that Ms Reyes has been unable to enforce the judgment she obtained against Mr Al-Malki and accepted that even if Ms Wong succeeds in her tribunal claim, there will be nothing she can do to enforce the judgment against Mr Basfar.
Many of the lawyers involved in Reyes were assembled again in Basfar v Wong. Kalayaan intervened in both cases, represented again in Wong by Tom Hickman QC and Flora Robertson, instructed by Deighton Pierce Glynn. Professor Webb, who had been part of Kalayaan’s team in Reyes, joined Timothy Otty QC, Paul Luckhurst, who had acted for Ms Reyes, and Ishaani Shrivastava, all instructed by Wilsons LLP, to represent Ms Wong. Meanwhile Mohinderpal Sethi QC, Sophia Berry, and Bláthnaid Breslin, instructed by Reynolds Porter Chamberlain LLP, represented Mr Basfar while Professor Chandran, instructed by Duncan Lewis, represented the Special Rapporteur.