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United Kingdom Employment Appeal Tribunal
You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> Birchall v Secretary Of State For Education & Anor [1995] UKEAT 605_95_1506 (15 June 1995)
URL: http://www.bailii.org/uk/cases/UKEAT/1995/605_95_1506.html
Cite as: [1995] UKEAT 605_95_1506
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At the Tribunal
On 9/10 May 1996
Judgment delivered on 18 September 1996
MRS T A MARSLAND
MR T C THOMAS CBE
2) THE BOARD OF GOVERNORS OF THE EUROPEAN SCHOOL
JUDGMENT
Revised
APPEARANCES
For the Appellant MISS S ASHTIANY
(Counsel)
Messrs Cole & Cole
Buxton Court
West Way
Oxford OX2
For the 1st Respondents
MR M J BELLOF QC
Mr Rabinder Singh
Queen Anne's Chambers
28 The Broadway
LONDON SW1H 9JS
For the 2nd Respondents
MR T WORMINGTON
(Counsel)
Messrs Challenor & Son
Stratton House
Bath Street, Abingdon
Oxfordshire OX14 3LA
MR JUSTICE MUMMERY (PRESIDENT) Three main questions are posed in this appeal -
(1) Who was the employer of Mr Birchall while he was a secondary school teacher at the European School?
Mr Birchall contends that he had two employers at that time: the Secretary of State for Education ("the Secretary of State") and the Board of Governors of the European School ("the Board").
The Secretary of State and the Board contend that Mr Birchall had only one employer -the Secretary of State.
The Industrial Tribunal held at Reading over a period of five days in September and November 1994 agreed with Mr Birchall. Extended Reasons, running to 88 pages, were sent to the parties on 4th May 1995.
This point is raised in a cross-appeal to this Tribunal by both the Board and the Secretary of State. It is relevant to the determination of his normal retiring age and to his right not to be unfairly dismissed.
(2) Was Mr Birchall unfairly dismissed from his employment? and
(3) Was Mr Birchall unfairly discriminated against contrary to the Race Relations Act 1976 ("the 1976 Act"), when he was compulsorily retired from his job on the ground that he had attained the age of 60?
In the Extended Reasons the Industrial Tribunal rejected Mr Birchall's contentions that -
(a) he was entitled to claim unfair dismissal. His normal retiring age was 60, not 65 as alleged by Mr Birchall;
(b) the Secretary of State and the Board were not entitled to rely on the normal retiring age of 60, as that was an infringement of his directly effective Community law rights under Article 48 of the Treaty of Rome; and
(c) he had been discriminated against on the ground of nationality contrary to the 1976 Act (Sections 4, 7 and 33).
The Appeal
On the hearing of the appeal Ms Ashtiany appeared for Mr Birchall and argued his case in detail by reference to her Skeleton Argument and also to written submissions which had been placed before the Industrial Tribunal, in particular submissions on European Community law prepared by Mr Derrick Wyatt QC (who did not appear on the appeal).
Mr Wormington appeared for the Board and Mr Michael Beloff QC and Mr Rabinder Singh for the Secretary of State. We thank them all for their valuable assistance in some unfamiliar legal terrain and for completing the arguments within the two-day estimate.
We decided, with the agreement of all the parties, to hear all the arguments from all the parties on the "employer point" in the cross-appeal before we heard any of the arguments on the other points raised by Mr Birchall's appeal. We postponed decisions on all points until we had heard all the arguments on all points.
The parties prepared arguments on the issue of a reference to the European Court of Justice under Article 177 of the Treaty on questions arising on Article 48 and on remedies. We decided that it was preferable to postpone full submissions on those topics until we had reflected on the substantive points on the cross-appeal and the appeal. For reasons set out later, we do not think that it is necessary to hear further submissions from the parties about a reference or remedies. In our judgment, Mr Birchall's appeal should be dismissed on the ground that the Industrial Tribunal's decision is legally correct, save on the question raised on the cross-appeal, which we allow.
We grant Mr Birchall leave to appeal to the Court of Appeal.
The Facts
The Industrial Tribunal incorporated into the decision under appeal the facts found by them in an earlier decision following a hearing on 5th and 6th April 1993 and resulting in a decision explained in Extended Reasons sent to the parties on 17th May 1993. That first decision on a preliminary issue was to the effect that Mr Birchall's normal retiring age was 65. The Secretary of State appealed. The Appeal Tribunal allowed that appeal for reasons given by judgment in this Tribunal on 15th March 1994. The case was remitted to the Industrial Tribunal to determine issues of fact and law identified in the judgment: See [1994] IRLR 630
The essential facts found in the first decision and in the relevant documents, to which full reference has been made at this hearing, may be summarised as follows.
(1) The European Schools were established to provide education for the children of officials and employees of the European Community, who are nationals of the contracting States. There is one such school at Woluwe, Brussels, and another at Culham near Abingdon in Oxfordshire. There are 9 such schools altogether.
(2) The parties to the international agreements for the setting up of the European Schools were the six original Member States of the European Coal and Steel Community. The United Kingdom acceded to the agreements after accession to the European Community in 1973. The relevant agreements are the statute of the European School and the Protocol on the setting up of the European Schools. It has been decided by the European Court of Justice that the agreements are Treaties, which do not form part of the general law of the Community and that the European Court of Justice has no jurisdiction to interpret them: Hurd v. Jones [1986] ECR 29 at paragraphs 20 and 37.
(3) According to the statute (Article 6) the school has the status of a public institution with legal personality and (Article 7) the main organ of the school is the Board of Governors which (Article 8) is responsible for the implementation of the statute, with power (Article 11) in educational matters to determine what studies should be undertaken and how they should be organised, and also with power in administrative matters (Article 12) to appoint the head of the school and to lay down rules governing his service and also with power (Article 12(3)) to -
"...determine each year, on a proposal from the Board, the staff requirements and settle with the government any questions concerning the assignment or secondment to the school of teaching staff for primary and secondary levels and of supervisory staff so that they retain their rights to promotion and retirement pension under their national rules and enjoy the benefits granted to officials of their category abroad.
(4) lay down unanimously on a proposal from the Boards of Inspectors, and according to harmonised rules, the service rules of the teaching staff of the school."
(3) Under the powers contained in the statute of 12th April 1957 (in particular Article 12.2, 12.3 and 12.4) and a protocol dated 13th April 1962 (Article 3) the Board adopted regulations for members of the teaching staff of the European School. The regulations applied to members of the teaching staff, including secondary school teachers, such as Mr Birchall. The regulations covered many details affecting the teaching staff eg, basic monthly salaries for secondary school teachers (Article 14), duties (in Chapter 3, Article 32 onwards), sick leave (Article 36) and, in Chapter V, provisions for the length of secondment or assignment to the school. In Article 39 provision is made for a request to the national authorities to terminate the secondment or assignment of a teacher during his probationary year ie, the first year of appointment. It is provided in Article 43(b) that -
"...unless special arrangements to the contrary are made at the time, secondment should be for a period of four years after the probationary year. Secondment may be renewed for further four-year periods on a recommendation from the relevant Board of Inspectors following consultation with the headmaster concerned."
Article 43. (c) provides for the circumstances in which secondment may be terminated including -
"...at any time during the period of secondment, on a reasoned request from the government which arranged the secondment, the period of notice being agreed between the government concerned and the headmaster of the school."
Article 44 contains provisions about discipline. Article 44(3) provides that a secondary school teacher accused of grave misconduct -
"...shall be liable to immediate suspension by the headmaster. ...Disciplinary proceedings shall be taken by the national authorities in accordance with national regulations. Should it lead to disciplinary action more serious than a reprimand, secondment or appointment to the school shall be terminated automatically and entitlement to a resettlement allowance shall be forfeited."
(4) The teachers in the European Schools are employed by Member States. Although seconded to work in the European Schools, the teachers retain salary rights, seniority rights and pension rights in their national systems.
(5) Mr Birchall, who was then aged 50 (born 28th September 1930), was employed to work as a secondary school teacher in geography, history and English as a foreign language in the European School with effect from 1st September 1981. He had previously been employed as a secondary school teacher by Oxfordshire Local Education Authority. The conditions of service for school teachers in England and Wales, are set out in the book known as the `Burgundy Book', which contains the retirement policy for teachers, as operated by Local Education Authorities. Under those provisions (5.5.1) it is stated that -
"Provision shall be made for automatic retirement at the end of the school term in which the teacher attains his/her 65th birthday, and also for the extension of service by mutual agreement beyond the end of that term. During the period of extension agreed, service shall be terminable in the same way as ordinary service."
Mr Birchall's pension provisions were contained in the Teachers' Superannuation Scheme for England and Wales. That scheme provided, in relation to retirement benefits, that normally benefits consisting of pension and lump sum are payable, on application by the teacher, where he is aged 60 or over, has retired and has completed a specified qualifying period. There is specific provision for the case of a teacher prematurely retiring in circumstances described between the age of 50 and 65. In those circumstances a superannuation benefit may be supplemented by or at the discretion of his last employer by payments calculated by reference to notional additional years of service, which shall not exceed certain periods.
(6) For one year Mr Birchall worked for a trial period in the European School at Woluwe in Belgium. He then accepted an appointment to work there for a further four years from 1st September 1982. The conditions of service contained in letters and enclosed documents sent to him from the Department of Education and Science contained no express reference to a retiring age. On his appointment as a secondary school teacher in the European School he was sent a copy of the regulations. We have been referred to the Department's general information and conditions of service document dated January 1980 which provides that -
"(1) The appointment of UK teachers to the European Schools is made by the UK Government. Those candidates selected are expected to satisfy certain conditions of age, health, character and nationality as required by the Civil Service Commissioners; they are employed by the Department of Education and Science and have the status of civil servants on limit period appointments.
Age and length of appointment
(ii) The appointment will be for a maximum number of nine years' service. A teacher must complete a satisfactory first year; he or she will then be offered an appointment for a further four years at the end of which the appointment will normally be renewed for one further period of four years. In any event, a teacher's contract will not be renewed after he or she has attained the age of 60 years."
The formal offer of appointment made to Mr Birchall in 1981 is contained in a letter dated 9th July 1981 sent to him by the Schools Branch (European Schools) of the Department of Education and Science. It says -
"European Schools
1. I am writing to offer you formally an appointment as a secondary teacher of geography, history and English as a foreign language at the European School, Brussels II (Woluwe), for a trial period of one year from 1 September 1981 to 31 August 1982. If your service during this trial period is considered satisfactory and it is decided you should be offered a new appointment as a secondary teacher at the European School, Brussels II, that appointment will be for a period of 4 years from the date of the end of your trial period. That offer would contain no right of re-appointment at the end of that 4-year period. In any case, appointments will normally only be renewed for one further period of 4 years, making a total period of 9 years. Only in exceptional circumstances would you be considered for a further extension of 4 years, making a maximum period of 13 years' service."
Paragraph 5 of the letter stated that part of his salary would be paid by the UK Government and that the European School would pay a supplement to bring his salary up to the rate to which he would be entitled on the European School scale. In paragraph 7 of the letter this is stated -
"Service in a European School is reckonable (ie pensionable) service under the Teachers' Superannuation Acts. Employees' contributions of 6% are deducted from your salary and this Department will pay the employers' share of contributions on your behalf. Similarly, during the period of your service you are compulsorily insured under the UK National Insurance Scheme, and contributions at the standard rate are deducted from your salary, this Department paying the employers' contribution.
8. Service in the European School will also count for salary incremental purposes in the UK ..."
By letter from the Department dated 7th October 1982 Mr Birchall was informed by the Department of Education and Science that his service during the trial period was considered to have been satisfactory. The Department then made the following offer -
"I am, therefore, offering you formally an appointment as a secondary teacher at the European School, Brussels II (Woluwe) for a period of 4 years from 1st September 1982 to 31 August 1986. Your employment within the 4-year contract is subject to your satisfactory conduct and service, and to the continuing availability of the post.
...
3. This present contract of employment contains no right to re-appointment beyond the original term, including the trial period, of five years. Decisions on the renewal of a teacher's appointment for service in the schools are made by agreement between the Schools' authorities in consultation with the UK Government. Unless this appointment is terminated for misconduct or unsatisfactory service, the Department will normally give you six months' notice to expire on 31 August, 30 April or 31 December and will expect you to give a similar period of notice to the Department."
Mr Birchall signed that offer letter, subject to a point raised by him about his rights in relation to redundancy payments as mentioned in paragraph 4 of that letter.
(7) In 1985 Mr Birchall was transferred to the Secondary Section of the European School at Culham at Oxfordshire and was appointed for a further four years from 1st September 1985 ending on 31st August 1989. Confirmation of this appointment was contained in a letter from the Department of Education and Science to Mr Birchall dated 26th June 1985. The letter stated -
"Following agreement between the European Schools Authorities and the United Kingdom Government, I am writing to confirm your appointment to the secondary section of the European School, Culham, Oxfordshire as a teacher for a period of 4 years from 1 September 1985 to 31 August 1989. It is a condition of this appointment that you comply with the detailed provisions laid down by the Board of Governors of the European Schools under the regulations for members of the teaching staff of the School. Your employment within the 4-year contract is subject to your satisfactory conduct and service and to the continuing availability of the post."
It was pointed out that the contract of employment contained no right of re-appointment after the 4-year period had expired and that renewals for servicing schools are made by agreement between the Schools Authorities and the United Kingdom Government. In paragraph 4 it was pointed out that his salary would continue to be paid by the UK Government with increments and central pay increases as they fell due and that the European Schools Authorities would pay the supplement, bringing his salary up to the rate to which he was entitled on the appropriate European salary scale under the regulations for members of the teaching staff. Mr Birchall expressed reservations about the contract he was offered, as it limited his total service with the European Schools to 8 years, as opposed to 9 years for which he had originally signed on.
(8) In June 1988 the Department of Education and Science were prepared to make an offer to him of an extension for one year, which would allow him to serve at Culham until just short of his 60th birthday. A letter dated 17th June 1988 stated -
"It is a general policy throughout the Civil Service not to extend employment past the age of 60 unless there are exceptional circumstances."
This policy was explained in more detail in later letters. In correspondence Mr Birchall complained that he was being treated "selectively as a Civil Servant". It was pointed out to Mr Birchall that he had retained his membership of the Teachers' Superannuation Scheme, but it was asserted in a letter of 24th October 1988 from the Department that it is -
"...not inconsistent of us to apply the Service's own rules on retirement to you because the two schemes are very dissimilar."
It was pointed out that -
"Benefits under both the Teachers' and Civil Service Schemes are payable at the age of 60 (and incidentally are calculated in the same way). I gather that most LEAs policy is for retirement at 60 rather than 65 as suggested which is consistent with our own."
In a letter dated 16th June 1989, following a period of negotiations between Mr Birchall and the Department, the Department made a formal offer to Mr Birchall of employment as a teacher in the secondary section of the European School at Culham for a period of two years from 1st September 1989, replacing an offer which Mr Birchall had previously accepted. Under the heading of "Retirement Policy" the letter said this - "It is the Department's policy that its employees normally retire on their 60th birthday. For European School teachers, the normal retirement date is at the end of the academic year in which their 60th birthday is reached. You will not normally be offered a contract which will terminate after that date."
In July 1989 the Department circulated a Note explaining the framework in which they would consider the length of teachers' contracts in the European Schools and make decisions in individual cases. In the relevant part of that Note it is stated that -
"...within this general framework, the Department will
...
(d) in accordance with the conditions of service of British Civil Servants, retire teachers at the age of 60. Since retirement on the eve of the 60th birthday (as would normally be the case for other Civil Servants) is impracticable for teachers, they will retire at the end of the academic year in which they reach their 60th birthday."
On 17th February 1990 Mr Birchall signed a copy of the letter of 16th June 1989, but crossed out the section relating to retirement policy already quoted and wrote in manuscript "subject to appeal". In a reply letter it was noted that Mr Birchall had amended the copy of the contract offered to him and it was pointed out that it was a requirement of the offer that Mr Birchall should sign and return a disclaimer of his rights under the Employment Protection (Consolidation) Act 1978. The letter said this -
"This requirement has been included in all of the contracts offered to British teachers at Culham following our review of employment policy. I must insist that you comply with it and ask that you sign and return the disclaimer to me."
As for Mr Birchall's appeal, a letter was written to him by the Department on 4th July 1990 referring to the policy of the Department and saying -
"...Having looked carefully at the grounds of your appeal I have concluded that the Department has not acted improperly in ceasing your employment from the end of the Summer term 1991. There has been no discrimination. The contract offered to you in 1989 and to all other affected British teachers at the time, is in accord with the Department's policy. The treatment of other teachers in the European Schools by their national governments is not relevant. Nor is Article 12.3 of the Statute of the European School relevant because your right to a pension has indeed been retained during your service in the Schools by virtue of your continued membership of the Teachers' Superannuation Scheme."
The letter continued in the penultimate paragraph -
"...The position of the British teachers in relation to the Civil Service is complex and I do not think it would shed much light if I go into it in detail. The essential fact is that you are employed by the Department and, except where the regulations for membership of the teaching staff provide otherwise, you are treated accordingly. Teachers seconded to the Schools, like Civil Servants, will normally retire at age 60."
(9) Mr Birchall appealed to the Civil Service Appeal Board, but by a letter dated 11th September 1990 the Civil Service Appeal Board stated that they were unable to help him. They said -
"...Regarding your appeal to this Board, as you will be aged 60 by the effective date of termination you are not eligible to appeal."
He was referred to the provisions in the regulations in the Civil Service Pay and Conditions of Service Code, paragraph 10134(iv) which allows UK based Civil Servants under notice of dismissal to appeal to the Civil Service Appeal Board, provided that they have not reached the minimum pensionable age on or before the effective date of termination. On 28th September 1990 Mr Birchall attained the age of 60.
(10) On 31st August 1991, at the end of the academic year in which he attained the age of 60, Mr Birchall was retired.
(11) On 29th November 1991 Mr Birchall presented an Originating Application to the Industrial Tribunal claiming race discrimination and unfair dismissal. The claims were made against both the Secretary of State and the Board.
The Employer Point
A The Decision of the Industrial Tribunal
The reasons why the Industrial Tribunal held that Mr Birchall was employed by both the Secretary of State and the Board may be summarised as follows (see pages 76-79 of the decision, paragraphs 198-202)
(1) There was no doubt that the Secretary of State was an employer of Mr Birchall, but that did not exclude the possibility that Mr Birchall had two employers. For example, an Oxford Don might have two employers: his college and the University, who employed him as a lecturer. Consultants might have two employers, combining National Health Service work with employment elsewhere.
(2) The relationship between Mr Birchall, on the one hand, and the Secretary of State and the Board, on the other hand, should be considered separately -
(a) The Secretary of State appointed Mr Birchall to his post in the European School, paid him a salary and controlled the duration of his service in the School.
(b) As for the Board, Mr Birchall was bound by the disciplinary procedures and other stipulations laid down by the Board. The Board regulated the conditions in which he did his work, controlled how much work he did and what he taught, and controlled his conduct outside the boundaries of the School. The School had to provide him with work and Mr Birchall had to do it. Furthermore, he was paid an allowance by the Board of a sum which exceeded the amount of the salary paid to him by the Secretary of State.
In reaching their decision, the Industrial Tribunal relied on the principles and guidance in a lengthy quotation from the judgment in Ready Mixed Concrete (South East) Ltd v. Minister of Pensions and National Insurance [1968] 1 All ER 433 at 439H - 440A and on what was said in the later case of Nethermere (St Neots) Ltd v. Gardiner and Taverna [1984] IRLR 240.
B Submissions of Mr Birchall
The principal argument advanced by Ms Ashtiany for dismissing the cross-appeal on this point was that the decision whether the relationship between the Board and Mr Birchall was one of employment was a decision of fact for the Tribunal, which could not be disturbed on appeal to this Tribunal. The Industrial Tribunal addressed the issue correctly, relied on the appropriate precedents and made no error of law in reaching their conclusion.
Ms Ashtiany made the following detailed points.
(1) The essential characteristics of employment were present in the relationship between Mr Birchall and the Board. There was mutuality of obligation between them. Mr Birchall was integrated into the establishment of the Board and was under their control.
(2) Mr Birchall was paid by the Board and was under an obligation to work. The larger part of his salary and his allowances were settled by the Board and paid directly by them to him.
(3) Rights and obligations were entered into directly between the School and the Board. The Secretary of State was not party to their contract. In the case of disagreement between the Board and Mr Birchall about the allowance which the Board refused to pay, the Secretary of State could do no more than make representations on his behalf.
(4) On no possible view of the matter was Mr Birchall in business on his own account (see Lee v. Cheung [1990] AC 409 at 412C). The Board's regulations for teaching staff contained, as already quoted, a wealth of rules and conditions, with which Mr Birchall had to comply and, in addition, there were grievance and disciplinary procedures which he could invoke against the Board.
C Conclusions
In our judgment, the Industrial Tribunal erred in law in holding that Mr Birchall was employed at the European School by the Board, as well as by the Secretary of State. We accept the submissions made by Mr Wormington on the Board's behalf, and supported by Mr Beloff QC.
It is common ground that, if the Board succeeds on this point, as we think it does, the remainder of the case against the Board fails.
The reasons for allowing the cross-appeal are these -
(1) Mr Birchall claims, and the Secretary of State accepts, that the Secretary of State is Mr Birchall's employer. The Secretary of State offered him written terms and conditions of employment as set out in the initial letter of 9th July 1981, which Mr Birchall accepted. The Secretary of State paid him the national salary of a teacher and controlled the duration of his service with the School. The extensions to his service were granted on the terms and conditions, as amended from time-to-time down to the expiration of the final two-year period on 31st August 1991.
(2) There never was an express contract of employment, either orally or in writing, between the Board and Mr Birchall. Mr Birchall therefore had to rely on the implication of a contract of service from the conduct of the parties. The Tribunal failed to apply the correct test for the implication of a contract of service. The Tribunal's reliance on the cases of Ready Mixed Concrete and Nethermere (supra) was misplaced. In those cases there was an express contract and the issue was whether it was a contract of service or a contract for services. In this case Mr Birchall undoubtedly had a contract of service in relation to his job as a secondary school teacher at the European School. That contract was with the Secretary of State. The critical question is whether a second contract of service in respect of the same employment at the same school should be implied as between him and the Board. Why should such a contract be implied between Mr Birchall and the Board in respect of the same job? In our view, there was no reason for implying a second employment contract, especially when the position was that both the power of appointment and of dismissal was with the Secretary of State, as the national authority, and not with the Board.
(3) As for the regulations made by the Board for members of the teaching staff of the European School, the position was that Mr Birchall's contract with the Secretary of State expressly incorporated the detailed terms relating to the duties of teachers which were required by the Board, as the body entrusted, under the statute of the European School and the protocol, to operate the European School. It was not necessary for Mr Birchall to have a contract of service with the Board.
(4) The obligations of the Board to provide work and to pay an allowance to Mr Birchall flowed, not from the existence of an implied contract of service, but from the provisions of the international treaty which established the European Schools and provided for the establishment of the Board to operate them. The right to the allowance from the Board arose from his contract with the Secretary of State, which incorporated the regulations providing for payment of teachers, in particular Articles 14 and 18 to 38.
(5) The regulations were made by the Board and are part of the international agreement. The obligations which arise from the statute, the protocol and the regulations exist in international law between the contracting Member States. The obligation to pay allowances to Mr Birchall under Regulation 13(1) is an obligation in international law as between the parties to the treaty rather than a private contractual obligation existing between Mr Birchall and the Board. The payment of the allowance, rather than forming the basis for implying a contract of service between Mr Birchall and the Board, is explicable by reference to the terms and framework of international agreements.
(6) Renewals of the contracts of service from time-to-time were a matter solely between Mr Birchall and the Secretary of State. The Board was not a party to the offers made by the Secretary of State or to the acceptances by Mr Birchall. The Board's power was limited to requests and suggestions in relation to the termination or renewal of a secondment or assignment.
(7) The policy on the retirement age of staff was determined solely by reference to national rules of the contracting parties. The Board did not have any control over the contents of the national rules.
(8) It was not suggested that Mr Birchall had more than one post at the School.
(9) It appears from uncontradicted evidence before the Tribunal (in the form of the statement of Mr Bidewell) that service in the European School continued to be pensionable under the Teachers' Superannuation Scheme for England and Wales of which Mr Birchall was a member. He was also covered by the UK insurance scheme. Employers' contributions were made only by the Secretary of State and were paid on the basis of Mr Birchall's national salary only.
In brief, there could be no contract of service implied between Mr Birchall and the Board because, in all the circumstances, the parties would have acted in exactly the same way as they did in the absence of such a contract. There were no grounds on which the Tribunal could properly imply the contract.
The Appeal
Normal Retiring Age
A The Decision of the Industrial Tribunal
The Industrial Tribunal decided that the normal retiring age applicable to Mr Birchall was 60. Their reasons for that conclusion may be summarised as follows (pages 80 -82 of the Extended Reasons).
(1) Mr Birchall was employed in the undertaking of the European Schools.
(2) He was so employed by both the Secretary of State and the Board.
(3) He held the position of a secondary school teacher appointed by the Secretary of State.
(4) The normal age for an employee holding that position in the European School was 60. The answer was supplied in a Memorandum attached to the letter dated 6th July 1989 written on behalf of the Secretary of State to the Directors of all European Schools. That Memorandum made it clear that teachers at the European Schools retire at the age of 60 "in accordance with the conditions of service of British Civil Servants". When Mr Birchall was made an offer for a period of two years from 1st September 1989 he returned the formal offer letter striking out the paragraph under the heading "Retirement Policy" and initialled it and marked it "Subject to appeal". The Industrial Tribunal held that, on receipt of that Memorandum
"...Employees of all age groups in Mr Birchall's position would reasonably regard 60 as the age of retirement applicable to that group. The Department policy statement clearly laid down the retiring age for teachers in the European Schools in Mr Birchall's position. In it the first respondent [Secretary of State] purported to lay down a new policy, by which for the first time a retirement age for such teachers was specified."
The Industrial Tribunal noted that Mr Birchall did not accept "what he saw as a unilateral change to his contractual terms", but the Tribunal went on to hold that, in specifying the retirement age, the Secretary of State was not in breach of any term of Mr Bichall's contract of service. Before 6th July 1989 there had not been any age which Mr Birchall could reasonably regard as a normal age of retirement applicable to the group of which he was a member. What happened was a change in policy communicated to relevant employees and that was sufficient to establish the normal retiring age at 60: see DHSS v. Hughes [1985] IRLR 263 at 267, paragraph 23.
B Submissions of Mr Birchall
Ms Ashtiany on behalf of Mr Birchall made the following submissions in support of the appeal on this point.
(1) Although Mr Birchall was not employed on terms which included an express retiring age when he took up the post at the European School, he was appointed on the basis of his existing rights, in particular the right to a retirement pension which would be protected. That was required by Article 12.3 of the Statute of the European School quoted above.
(2) The terms of appointment were subject to Article 12.3 of the Statute. Under the regulations Mr Birchall was assigned or seconded to the European School "in accordance with Article 12.2 and 12.3 of the Statute of the European School".
(3) Prior to his appointment to the European School Mr Birchall was employed as a teacher with Oxfordshire County Council. His retirement age had clearly been 65. He continued to be a member of the Teachers' Superannuation Scheme after his appointment as a teacher at the European School and service at that School was reckonable service within the meaning of the Scheme.
(4) In those circumstances the effect of Article 12.3 of the Statute was that the Secretary of State and the Board were under a specific implied duty to Mr Birchall not to act in breach of Article 12. There was an implicit contractual retirement age the same as for his Local Authority employment ie, 65. Alternatively, Mr Birchall was entitled to rely on a general expectation that the Secretary of State and the Board would act in good faith so as to abide by their own voluntarily accepted rules.
(5) If there was an implied contractual retiring age of 65, then that was the normal retiring age. There was no finding or evidence of regular departure from that age: see Waite v. Government Communications HQ [1983] ICR 653.
(6) Even if there was no implied contractual retiring age of 65, the Secretary of State was not entitled to rely on a purported introduction of a retirement age by a unilateral announcement of the new policy which Mr Birchall did not accept. It was ineffective to create a normal retiring age. As a matter of law the employer was not entitled, by unilateral decision, to announce an event which, when it arrived, would terminate employment and disentitle the employee from protection for unfair dismissal. There was either an implied contractual retiring age of 65 or, if there was not, the statutory "default" provision in S.64(1)(b)(ii) applied and Mr Birchall's normal retiring age would be 65. The announcement of a policy was not effective to establish a normal retiring age, as it was an attempt by the Secretary of State to make a detrimental variation of Mr Birchall's rights to his retirement pension. He would lose his right to his retirement pension on terms previously enjoyed, which included the capacity to build up his entitlement to the age of 65 (the Teachers' Superannuation Pension Scheme, unlike the Civil Service Scheme, was a contributory Scheme).
C Conclusion
In our judgment, there is no error of law in the decision of the Industrial Tribunal. On this point we accept the submissions of Mr Michael Beloff QC.
In our view, the legal position is as follows.
(1) There is no liability for unfair dismissal to Mr Birchall if his normal retiring age was 60. The Industrial Tribunal would have no jurisdiction to entertain his claim for unfair dismissal: S.64(1)(b)(i) of the 1978 Act.
(2) The Industrial Tribunal found as a fact that the normal retiring age was 60.
(3) There was no legal misdirection by the Tribunal in reaching that conclusion. The policy of the Secretary of State was that teachers seconded to the European School would have a normal retiring age of 60.
(4) The Secretary of State was entitled to rely on a policy, even though the subject matter of the policy was not incorporated as a term in the contract of employment. The policy was not itself a breach of any existing contractual term. The policy was made known to Mr Birchall. He could not have had any reasonable expectation or understanding other than that persons in his position would be retired at the age of 60.
(5) The fact that the contract was for a fixed term is irrelevant to the issue. What matters is whether the dismissal is on the ground that a certain age has been reached. That age might be expressly specified in a contract. If it is not (and it was not in this case) it was a matter of fact. The existence of a declared policy as to retirement was evidence on which the Industrial Tribunal was entitled to make a finding of fact that 60 was the normal retiring age.
For these reasons we dismiss the appeal on this point.
European Community Law - Article 48 of the Treaty of Rome
Article 48 of the Treaty is in these terms -
"1. Freedom of movement for workers shall be secured within the Community by the end of the transitional period at the latest.
2. Such freedom of movement shall entail the abolition of any discrimination based on nationality between workers of the Member States as regards employment, remuneration and other conditions of work and employment.
3. It shall entail the right, subject to limitations justified on grounds of public policy, public security or public health:
(a) to accept offers of employment actually made;
(b) to move freely within the territory of Member States for this purpose;
(c) to stay in a Member State for the purpose of employment in accordance with the provisions governing the employment of nationals of the State laid down by law, regulation or administrative action;
(d) to remain in the territory of a Member State having been employed in that State ..."
Article 7 of the Treaty, prior to its amendment by the Treaty of the European Union, was in these terms -
"Within the scope of the application of this Treaty, and without prejudice to any special provisions contained therein, any discrimination on the ground of nationality shall be prohibited."
See also Article 5 (fulfilment of obligations of the Treaty). Article 48 has direct effect, but Articles 5 and 7 do not.
A The Decision of the Industrial Tribunal
The Industrial Tribunal rejected Mr Birchall's contention that the application of the retiring age of 60 (even if it was the normal retiring age for the purposes of S.64(1)(b)(i) of the 1978 Act) was contrary to European Community law, in particular Article 48, and applied so as to render unfair the decision not to renew his contract and to dismiss him by reason of attaining that age.
Mr Birchall's claim was that -
(a) he had exercised his right of free movement pursuant to Article 48 of the Treaty in order to take up his post in Brussels and also upon his return to the United Kingdom to take up his post at Culham; and
(b) the Secretary of State had infringed that right by secondment on terms which constituted an obstacle to the free movement of workers and by then dismissing him on the termination of his secondment. He had been subjected to an earlier retirement age than that applicable to him in his employment as a teacher prior to secondment. Those terms had been approved or acquiesced in at the time of secondment. The Secretary of State had failed to extend his secondment and had dismissed him instead.
The Industrial Tribunal rejected these submissions for the following reasons:-
(1) The prohibition in Article 48 of the Treaty is against Member States applying their law differently on the grounds of nationality.
(2) There was no evidence that the Secretary of State would have treated, for example, a French national seconded by the Secretary of State to the European School, any differently from the way in which he had treated Mr Birchall.
(3) The retirement age of 60 under the policy in England and Wales on secondment to the European School was without regard to nationality and was in accordance with objective criteria.
(4) Teachers in England and Wales were not employed by the State or by the Secretary of State. They were employed by Local Education Authorities or governing bodies in the public sector or by governing bodies of private schools. Teachers had different retiring ages.
(5) The Industrial Tribunal accepted the contentions of the Secretary of State that, in order to rely on Article 48, Mr Birchall had to show a causal connection or nexus between the denial of the right or benefit in question and the right of free movement. Mr Birchall was not complaining that his movement across frontiers was impeded by any disadvantage associated with such movement, but rather that his movement between jobs was impeded. This was not a case of the Secretary of State discriminating as between the nationals of two different states. The complaint was that the Secretary of State had treated a UK national less favourably than another state had treated or would have treated its nationals. That complaint fell outside Article 48. Discrimination was not the same as disparity of treatment, which may result from divergencies existing between the laws of member states, provided that those laws affect all persons subject to them in accordance with objective criteria and without regard to their nationality.
B Mr Birchall's Submissions on the Appeal
Ms Ashtiany, on behalf of Mr Birchall, submitted that there was an error of law in the Tribunal's decision, because the Tribunal had failed to hold that there was a breach of Article 48. It was argued that the correct legal position was that the Secretary of State's purported introduction of a retiring age by unilateral announcement of a new policy, not accepted by Mr Birchall, was ineffective to create a normal retirement age of 60, because it impeded his right to exercise free movement under Article 48.
We have found it difficult to understand the application of this argument to the facts of this case. In their essentials, Ms Ashtiany's submissions may be summarised as follows:-
(1) Article 48 confers a free-standing, directly effective justiciable right of freedom of movement for workers in the field of employment and freedom from discrimination based on nationality: Commission v. French Republic [1974] ECR 359; Van Duyn [1974] ECR 1337.
(2) The right was breached when Mr Birchall was dismissed from his employment at the European School following the introduction by the Secretary of State of a policy of retiring teachers seconded to the School at the age of 60. The termination of his employment at 60 caused a diminution of his retirement pension rights.
(3) Section 64 of the 1978 Act had to be read subject to the directly effective, superior law of Article 48.
(4) In breach of Article 48 he was discriminated against on the grounds of his nationality in that, unlike nationals of other Member States, he was not permitted to retain the retiring age which he had enjoyed prior to his joining the European School.
(5) He had entered into an agreement to work as a secondary school teacher, initially at Woluwe and then at Culham, on the basis that his rights to promotion and pension entitlement would be protected under Article 12.3 of the Statute.
(6) Unlike nationals of other states also working as teachers in various European Schools, his rights had not been protected. He had been prematurely dismissed at 60.
(7) Article 48 was applicable because, by accepting employment in a Member State (Belgium) and then transferring to another Member State (the United Kingdom), he was exercising the right of free movement under Article 48. He was therefore entitled to protection from direct or indirect discrimination on the grounds of his nationality under Article 48. He was not limited to exercising those rights against other States. He could rely on those rights as against his own state, the United Kingdom: R v. Immigration Appeal Tribunal and Surinder Singh ex parte Secretary of State for Home Department [1992] 3 All ER 798.
(8) That right to exercise free movement was impeded by his premature retirement and the diminution of pension rights in circumstances in which nationals seconded or assigned by other member states did not suffer such a disadvantage.
(9) Mr Birchall, as a teacher at the European School, was a "worker" within the meaning of Article 48: Hurd v. Jones (supra). As such he was protected from indirect, as well as direct, discrimination on the grounds of nationality: Scholz v. Opera Universitaria [1994] 1 CMLR 873 at 885.
The insistent theme of these submissions was that, once the right of free movement had been exercised, the person who had exercised it was entitled to the protection of Article 48. Mr Birchall exercised it by taking up employment in Belgium and subsequently returning to the United Kingdom. The right to exercise free movement was impeded by the reduction of his retiring age by five years, with a significant reduction for all time in his right to a retirement pension. Nationals seconded by other Member States did not suffer this detriment. The policy of retirement at 60 therefore impeded the Community right and that policy could not be invoked for the purpose of escaping liability for unfair dismissal. Section 64(1)(b)(i) should be disapplied.
C Conclusion
In our judgment, the Industrial Tribunal's conclusion in rejecting Mr Birchall's Article 48 argument was legally correct. We accept the submission of Mr Michael Beloff QC on this point. The correct legal position is as follows:-
(1) The principal focus of Article 48 is on the removal of obstacles to free movement of workers created by discrimination, as between nationals of different states, by one of those states.
(2) Article 48 is not normally concerned with the relationship between a member state and one of its own nationals Morson [1982] ECR 3723 at paragraphs 12 - 17 and pages 3735 - 3736. Even in the cases where Community law is invoked by a national against his own state, it is concerned with situations where it is claimed that the state cannot discriminate between its own nationals and those of another state. Neither Article 48 nor the decisions on it require a state to treat its own nationals no less favourably than another state treats its own nationals. It was rightly accepted on behalf of Mr Birchall at the Industrial Tribunal that an employee of a British employer in the United Kingdom cannot invoke any principle on European Community law to complain of his treatment, as compared with the treatment of employees of another Member State in that state. (Ms Ashtiany made it clear on the appeal that Mr Birchall was not seeking to assert that he was entitled to the same terms and conditions of employment as the nationals of other states.)
(3) The emphasis which Mr Birchall places on the fact that he moved from the United Kingdom to Belgium and then back from Belgium to the United Kingdom in exercise of his right of free movement is misplaced. He seeks to attach those particular facts to the denial to him of the right to retire at 65 and the benefit of a pension at that age. But Mr Birchall is unable to show that there is any causal connection or nexus between, on the one hand, the denial of that right and of those benefits and, on the other hand, the exercise of his right of free movement. The denial of a right or benefit is only objectionable under Article 48 in so far as it is any impediment to the right of free movement conferred by that Article: see Surinder Singh (supra) [1992] 3 All ER 798 at 812, paragraph 5 of the Opinion of the Advocate General.
(4) In this case, Mr Birchall's legal position was no different because he went to the School in Belgium and then returned to the United Kingdom than it would have been if he had gone at the outset to either Brussels or Culham and had stayed there throughout the remainder of his teaching career. His rights and benefits were not affected by the movement from one country to another or even within one country.
(5) The essence of Mr Birchall's complaint is not concerned with freedom of movement at all. There was no disadvantage associated with his movement between Member States. The disadvantage was in connection with the change of jobs. Mr Birchall went from being a teacher employed by a Local Education Authority in a State secondary school to being a teacher employed by the Secretary of State in the European School. He was paid a higher salary, but he had to retire at an earlier age. Neither the change in salary nor in retirement age constituted an infringement of his rights under European Community law. The reduction in the age of retirement was not an impediment to free movement between Member States.
In our view, the authorities cited to us support these conclusions, not those proposed on behalf of Mr Birchall. In particular, the case of Surinder Singh (supra) concerned a situation where a State gave fewer rights as to residence to returning nationals of its own than it gave to nationals of another state. See paragraphs 15 - 23 at pages 818 - 819. That is a case of discrimination between nationals in relation to freedom of movement. That is not this case. It is true that Mr Birchall was worse off in relation to age of retirement, as an employee of the Secretary of State in the European School, than he would have been if he were employed by the French Government in the European School (or employed by a Local Education Authority in a UK secondary school). The disadvantage is in being in the service of the Crown. But there is no barrier to freedom of movement within the Community. His position on retirement is exactly the same whether he is working as a teacher for the Secretary of State in the European School in Brussels or in Colham.
Reference under Article 177
It was submitted on behalf of Mr Birchall that -
(1) His Community law claim under Article 48 in relation to his claim for unfair dismissal is at the forefront of his case.
(2) It is necessary to decide the Article 48 point in order to determine whether the statutory retiring age in the 1978 Act may be applied. His success on the Article 48 point will answer the point under S.64(1)(b), if he fails in his domestic law argument that his normal retiring age is 65.
(3) An early reference is desirable in a case where the Tribunal cannot, with complete confidence, resolve the issue itself. There is a real doubt in this case about the correct interpretation of Article 48.
(4) Costs and time would be saved by a reference now. It would be in the interests of justice and the equitable disposal of Mr Birchall's claims to take that course.
We agree with Mr Beloff QC that reference by the Tribunal to the European Court of Justice under Article 177 is not necessary for the resolution of this case because -
(1) There is no real doubt in our minds that Article 48 is inapplicable to the facts of this case. There is no arguable question of European Community law to refer to the European Court of Justice.
(2) It is within the jurisdiction and competence of this Appeal Tribunal to adjudicate upon the issue whether a question of interpretation in the Treaty has been raised. If there is no such question, it is within the jurisdiction of this Tribunal to decide whether the Industrial Tribunal were correct in holding that Article 48 was not applicable.
(3) If a reference is to be made in this case, we conclude that it would be better made at a later stage after further argument on the domestic law points on appeal.
(4) A reference would add to the delay and costs and should not be made unless it is necessary. It is not.
Claims under the Race Relations Act 1976
Mr Birchall's final clutch of claims was made under the 1976 Act.
A Decision of the Industrial Tribunal
The Industrial Tribunal dismissed claims against the Secretary of State under the 1976 Act both as
(a) principal under S.4; and
(b) as a secondary party under S.33 (ie, on the ground that the Secretary of State had aided and abetted an act of unlawful racial discrimination by the Board).
For reasons already given, the claim against the Board fails as they were not an employer of Mr Birchall. As the Tribunal considered that the Board was also an employer of Mr Birchall, they gave reasons for dismissing claims against both of them in these terms.
(1) There was no liability on the part of the Secretary of State under S.33, as there was no discrimination by the Board as Mr Birchall's employer.
(2) There was no claim against the Secretary of State under S.4, as there was no discrimination against Mr Birchall on the ground of race.
(3) There was no claim against the Secretary of State under S.33. Mr Birchall argued that the Secretary of State acted in a dual role, as employer and through a representative member of the Board. The Tribunal accepted the contention of the Secretary of State that there was a difference between a body corporate, such as the Board, and the position of the Secretary of State, as a member of the Board. It was legally incorrect to treat the Board as the principal aided and abetted by the Secretary of State through membership of the Board.
B Mr Birchall's Submissions
Ms Ashtiany, on behalf of Mr Birchall, argued that there was unlawful race discrimination against him by setting terms and conditions for secondment which were less favourable than those settled for teachers seconded by other national authorities. That was less favourable treatment within the meaning of S.1(1)(a) of the 1976 Act or indirect discrimination within the meaning of S.1(1)(b).
There was a relevant condition with which fewer British nationals could comply and which was to Mr Birchall's detriment, because he could not comply with it. The condition was that, in order to become and/or remain a teacher at the European School on terms which fully preserved the right to a retirement pension, he should have been assigned or seconded to the European School by a national authority other than the United Kingdom government. No justification had been put forward for that indirect discrimination.
Further, the Board discriminated against him under S.4 in the terms of employment and by subjecting him to the detriment already mentioned.
C Conclusions
In our judgment, there was no error of law in the decision of the Industrial Tribunal. We dismiss Mr Birchall's appeal on this point.
The correct legal position is as follows:-
(1) There is disparity in the treatment of teachers in the European School as regards ages of retirement. A teacher employed by the French government retires at 65; one employed by the UK government retires at 60.
(2) In order to show that disparate treatment constitutes unlawful discrimination on the grounds of race or nationality, it is necessary to identify a discriminator, who is alleged to have treated the applicant less favourably than he treats or would treat others on the ground of race or nationality. The submission of Mr Birchall confuses discrimination with disadvantage. Mr Beloff QC gave an example that there would be a disadvantage, but no discrimination, where, in two adjoining factories run by different employers, and one employer paid his workforce 90% of the wages paid to the counterpart employees in the other factory. There would be disadvantage, but no discrimination and no discriminator.
(3) That fundamental conceptual confusion in Mr Birchall's submissions has caused Mr Birchall to allege discrimination by the Secretary of State. The position is that the Secretary of State treats all teachers in that employment at the European School in the same way on the matter of retirement ages. Mr Birchall is in fact seeking to be treated more favourably than other employees of the Secretary of State. The critical point on discrimination is that Mr Birchall cannot point to anyone of another nationality (eg French) who is employed by the Secretary of State and is treated more favourably than him. There is no evidence that, if the Secretary of State did employ a French national in the European School, the French national would be treated more favourably than he would be treated.
(4) So far as secondary liability is concerned, that depends, first, on whether there is any unlawful discrimination by the Board. For reasons already given there is no such liability, as there was no employment relationship between the Board and Mr Birchall. Even if there was an employment relationship, in the extended sense contained in the 1976 Act, the only act complained of (dismissal in accordance with normal retirement age) is not one over which the Board had any control. It was a matter solely for the national authority, ie, the Secretary of State. If a teacher employed by the French authorities is enabled to stay until he is 65, that would not be the result of racial discrimination by the Board. It would be the result of the different policy of the French employer. Mr Birchall's retirement at the age of 60 is similarly the result of the policy of the United Kingdom employer, the Secretary of State. The Board is not responsible for the differential retiring ages of teachers employed to teach in the European School by different national authorities.
(5) Even if there was discrimination by the Board, S.33 does not make the Secretary of State liable as an aider and abetter. The Secretary of State would not be liable for that as an employer. He could only be liable as a member of the Board of Governors. There is a crucial difference between the Board, as a body corporate, with distinct legal capacity, and the members of the Board. Membership of the Board does not on its own make the Secretary of State an aider and abetter of liability under S.33.
The Result
The result of the decisions on the various points is this.
(1) The cross-appeal is allowed. Mr Birchall had only one employer at the relevant time - the Secretary of State.
(2) Mr Birchall's appeal is dismissed. Mr Birchall was not unfairly dismissed by the Board, because they did not employ him and so could not dismiss him. Mr Birchall was not unfairly dismissed by the Secretary of State, because he was retired at 60, which was the normal retiring age for teachers employed at the European School by the Secretary of State. He cannot therefore bring a claim for unfair dismissal: S.54 and S.64(1)(b)(i) of the 1978 Act.
(3) There are no grounds for disapplying those provisions in this case, because the provisions of Article 48 are not applicable and there is, therefore, no incompatibility between those statutory provisions of domestic law and Article 48 of the Treaty of Rome. Nor is there any question of interpretation for reference to the European Court of Justice on a possible breach of the right of free movement conferred by Article 48.
(4) Finally, there was no discrimination against Mr Birchall on the grounds of nationality, either by the Board or the Secretary of State, either as principal or by way of secondary liability.