United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellants	MR G MILLAR (of Counsel) Messrs Thompsons Solicitors Congress House Great Russell Street London WC1B 3LW
For the Respondents	MR E BARTLEY-JONES QC Messrs Bowcock Cuerden Solicitors South Cheshire House Manor Road Nantwich Cheshire CW5 5LX


 


MR JUSTICE MORISON (PRESIDENT): Prior to 1 September 1996, the applicants/appellants were each employed by the Eastbourne Hospitals NHS Trust ["the Trust"] in their payroll department. They were employed under Whitley Council terms and conditions.

Sections 45 and 46 of the Whitley terms provide as follows:

"SECTION 45.

ARRANGEMENTS FOR REDUNDANCY PAYMENTS.

SCOPE.

1. These arrangements apply to employees who, having been employed for the minimum qualifying period of reckonable service (as defined in paragraph 3.2) in the National Health Service in Great Britain (or previously in Northern Ireland), are dismissed by reason of redundancy, which expression includes events described in section 81(2) of the Employment Protection (consolidation) Act 1978, and premature retirement on organisational change under paragraphs 1(iii), 6, 7 and 8 of the agreement on Premature Payment of Superannuation and Compensation Benefits (Section 46). The minimum qualifying period is 104 weeks continuous service whole-time or part-time.

2. When considering redundancies, regard should be had to good employment practice, such as that outlined in the ACAS booklet on handling redundancies.

DEFINITIONS.

3. For the purposes of these arrangements, the following expressions have the meaning assigned below :-

3.1 "Health Service Authority" means a Regional Health Authority, a District Health Authority, the Dental Practice Board, a Special Health Authority, a Family Health Service Authority, the Public Health Laboratory Service Board, a Health Board and the Common Services Agency in Scotland, the Northern Ireland Health and Social Services Board and its Central Services Agency, and any predecessor or successor authority.

3.2 "Reckonable service", which shall be calculated up to the date on which the termination of the contract takes effect, means continuous employment as defined in 1 above with the present or any previous Health Service authority, after attaining age 18 years.

A period (which may include the aggregate or shorter periods) not exceeding 12 months beginning on or after 1 April 1985 spent as a GP trainee in the employment of a Principal GP trainer under the Trainee Practitioner scheme shall, notwithstanding that it is not employment with a Health Service authority, also count as "reckonable service".

Periods of employment prior to a break or more than 12 months at any one time in employment with a Health Service authority shall not count as "reckonable service", except that any period of employment as a GP trainee counted as "reckonable service" shall not count as part of any period of more than 12 months constituting a break in employment with a Health Service authority.

Service which qualifies under Section 58 of this Handbook shall also count as reckonable service. The following previous employment shall not so count:

3.2.1 employment which has been the subject of terminal payments under HM (60)47 or HM (62)12 (in Scotland, SHM (60)38 or SHM (62)14;

3.2.2 employment which has been the subject of a redundancy payment under this agreement or under any similar redundancy arrangements in Northern Ireland;

3.2.3 employment which has been the subject of compensation for loss of office under the National Health Service (Transfer of Officers and Compensation) Regulations 1948 and 1960, the National Health Service (Transfer and Compensation) (Scotland) regulations 1948 and 1960, the Local Government (Executive Councils) (Compensation) Regulations 1964 and 1966, the National Health Service (Compensation) Regulations 1971, the National Health Service (Compensation) (Scotland) Regulations 1971, or Regulations made under section 24 of the Superannuation Act 1972, or any orders made under sections 11(9) or 31(5) of the National Health Service Act 1946 or sections 11(10) or 32(5) of the National Health Service (Scotland) Act 1947 or sections 13(3) or 19(6) of the National Health Service (Scotland) Act 1972, or under sections 28(6) or 60 of the Health Service Act (Northern Ireland) 1948 or Article 78 of the Health and Personal Social Services (Northern Ireland) Order 1972 or regulations made under section 44 of the National Health Service Reorganisation Act 1973, or section 34A of the National Health Service (Scotland) Act 1972.

3.2.4 employment in respect of which the employee was awarded superannuation benefits.

3.3 "Superannuation benefits" means the benefits, or part of the benefits (other than a return or contribution) payable under a superannuation scheme in respect of the period of the employee's reckonable service.

3.4 "Week's pay" means either:

3.4.1 an amount calculated in accordance with the provisions of Schedule 14, Part II of the Employment Protection (Consolidation) Act 1978 except that paragraph 8 of Schedule 14. Part II shall not apply or

3.4.2 an amount equal to 7/365 ths of the annual salary in payment at the date of termination of employment, or

3.4.3 the weekly wage calculated as at the date of termination of employment, to which the employee would be entitled under the agreements of the Ancillary Staffs Council or the Ambulance Council of the Whitley Councils for the Health Services (Great Britain) during absence on annual leave,

whichever is more beneficial to the employee.

BENEFITS

4. The redundancy payment shall take the form of a lump sum dependent on the employee's age and reckonable service at the date of ceasing to be employed. This shall be:

4.1 for all employees aged 41 or over who are not immediately after that date entitled to receive payment or benefits provided under the NHS Superannuation Scheme, the lump sum shall be assessed as follows:

4.1.1 2 weeks' pay for each complete year of reckonable service at age 18 or over with a maximum of 50 weeks' pay, PLUS

4.1.2 an additional 2 week' pay for each complete year of reckonable service at age 41 or over with a maximum of 16 weeks' pay.

(Overall maximum, 66 weeks' pay)

4.2 For other employees, a maximum of 20 years reckonable service may be counted, assessed as follows:

4.2.1 For each complete year of reckonable service at age 41 or over - 1 and half weeks' pay;

4.2.2 For each complete year of reckonable service at age 22 or over but under 41 - 1 weeks' pay;

4.2.3 For each complete year of reckonable service at age 18 or over but under 22 - half a weeks' pay.

(Overall maximum, 30 weeks' pay)

5. Fractions of a year cannot count except that they may be aggregated under 4.2.1, 4.2.2, and 4.2.3 to make complete years. These must be paid for at the lower appropriate rate for each complete year aggregated.

6. If the 64th birthday has been passed, the sum calculated under paragraph 4 above shall be reduced by one twelfth for each complete month between the date of the 64th birthday and the last day of service.

7. Redundant employees who are entitled to an enhancement of their superannuation benefits on ceasing to be employed will, if the enhancement of service is less than 10 years, be entitled to receive redundancy payments. Where the enhancement of service does not exceed 6 and two third years they will be paid in full; where the enhancement of service exceeds 6 and two third years they will be reduced by 30% in respect of each year on enhanced service over 6 and two third years with pro rata reduction for part years.

EXCLUSION FROM ELIGIBILITY.

8. Employees otherwise eligible shall not be entitled to redundancy payments under these arrangements if they :-

8.1 are dismissed for reasons of misconduct, with or without notice; or

8.2 are age 65 or over; or

8.3 have reached the normal retiring age in cases where there is a normal retiring age of less than 65 for employees holding the position which they held and the age is the same for men and women; or

8.4 at the date of the termination of the contract have obtained without a break or with a break not exceeding 4 weeks suitable alternative employment with the same or another Health Service authority in Great Britain or NHS trust in Great Britain; or

8.5 unreasonably refuse to accept or apply for suitable alternative employment with the same or another Health Service authority in Great Britain or NHS trust in Great Britain; or

8.6 leave their employment before expiry of notice except as described at paragraph 11; or

8.7 are offered a renewal of contract (with the substitution of the new employer for the previous one) where the employment is transferred to another public service employer not being a Health Service authority.

SUITABLE ALTERNATIVE EMPLOYMENT.

9. "Suitable alternative employment", for the purposes of paragraph 8, should be determined by reference to sections 82(3) and 82(5) of the Employment Protection (Consolidation) Act 1978. In considering whether a post is suitable alternative employment, regard should be had to the personal circumstances of the employee. Employees will, however, be expected to show some flexibility by adapting their domestic arrangements where possible.

10. For the purposes of this scheme any suitable alternative employment must be brought to the employee's notice in writing before the date of termination of contract and with reasonable time for the employee to consider it; the employment should be available not later than 4 weeks from that date. Where this is done, but the employee fails to make any necessary application, the employee shall be deemed to have refused suitable alternative employment. Where an employee accepts suitable alternative employment the "trial period" provisions in section 84(3) to (7) of the Employment Protection (Consolidation) Act 1978 shall apply.

EARLY RELEASE OF REDUNDANT EMPLOYEES.

11. Employees who have been notified of their cessation of employment on account of redundancy, and for whom no suitable alternative employment in the NHS is available may, during the period of notice, obtain other employment outside the NHS and wish to take this up before the period of notice of redundancy expires. In these circumstances the employing authority shall, unless there are compelling reasons to the contrary, release such employees at their request on a mutually agreeable date and that date shall become the revised date of redundancy for the purpose of calculating any entitlement to a redundancy payment under the other terms of this agreement.

CLAIM FOR REDUNDANCY PAYMENT.

12. Subject to the employee submitting a claim which satisfies the conditions and is made either before or within 6 months after cessation of employment, the redundancy payment shall be paid by the employing authority. Before payment is made, employees shall provide a certificate that at the date of termination of the contract they had not obtained or been offered or unreasonably refused to apply for or accept suitable alternative Health Service employment commencing without a break or with a break not exceeding 4 weeks from the date of termination and that they understand that the payment is made only on this condition and they undertake to refund it if this condition is not satisfied.

DISPUTES.

13. Employees who disagree with the employing authority's calculation of the amount of redundancy payment or rejection of a claim for such payment should in the first instance make representation to the employing authority via the local grievance procedures."

SECTION 46.

PAYMENT OF SUPERANNUATION AND COMPENSATION BENEFITS ON PREMATURE RETIREMENT.

SCOPE.

1. Existing arrangements provide for premature retirement with immediate payment of superannuation benefits and compensation for eligible employees :-

(i) on redundancy,

(ii) in the interests of the efficiency of the service.

This agreement provides additionally for premature retirement :-

(iii) on organisational change - where, in contemplation of furtherance of organisational change (statutory or managerial), the premature retirement would be in the interests of the service.

2. The terms of this agreement shall apply equally to premature retirement with immediate payment of superannuation and compensation benefits in any of the circumstances outlined at (i) - (iii) above.

3. The GWC NHS Reorganisation Committee has agreed that employing authorities should not, save by local agreement, introduce or vary conditions of employment relating to retirement age in a way which might adversely affect any existing member of staff.

DEFINITIONS.

4. In this agreement :-

"Retirement age" means the age at which, under any written condition of employment, an employee may be required to retire; or if there is no such condition, age 65.

"Relevant optant service" means, for any former member of an FSSN or similar scheme, service in that scheme occurring :-

- during NHS employment and within the 12 months period immediately before the beginning of their reckonable service in the NHS superannuation scheme: plus

- any such service occurring during the local government employment of any employee who, on entering the NHS, was covered by a Transfer Order.

AGE AND SERVICE QUALIFICATION.

5. In all cases the employee must be aged between 50 and retirement age and have at least 5 years' service (including any relevant optant service) within the NHS superannuation scheme.

ELIGIBILITY FOR PREMATURE RETIREMENT ON ORGANISATIONAL CHANGE.

6. In England, criteria for the selection of volunteers for premature retirement on organisational change shall be agreed at regional level between Management and Staff Side or recognised staff organisation(s). In addition, each premature retirement must be approved by the regional health authority in consultation with and on the recommendation of the employing authority. In giving such approval the regional health authority must be satisfied that the employee has consented in writing to being prematurely retired and that the premature retirement will contribute to the avoidance of redundancy and be in the general interests of the service in the region.

7. In Wales, criteria for the selection of volunteers for premature retirement on organisational change shall be agreed at Area level (after 1 April 1982 at district level). The expression "agreed at Area level" shall have the meaning assigned to it in Advance Letter (GC)(W) 9/81: NHS Reorganisation, Staffing Arrangements (Wales). A copy of the agreed criteria shall be sent to the Welsh Office. In addition, when giving approval to the premature retirement of individual employees, the employing authority must be satisfied that the employee has consented in writing to being prematurely retired and that the premature retirement will contribute to the avoidance of redundancy and be in the general interests of the service.

8. In Scotland the selection of volunteers for premature retirement on organisational change shall be approved by the Scottish Home and Health Department in consultation with and on the recommendation of the employing authority. The Department has undertaken to give each case sympathetic consideration and to notify recognised staff organisations in Scotland of all the applications received under the scheme. In giving such approval the Scottish Home and Health Department will need to be satisfied that the employee has consented in writing to being prematurely retired and that the premature retirement will contribute to the avoidance of redundancy and be in the general interests of the service in the area.

9. The terms for premature retirement on redundancy or in the interests of the efficiency of the service (paragraphs 1(i) and (ii) of this agreement) shall in no way be affected by failure to meet any of the conditions set out in paragraphs 6-8 above.

ENHANCEMENTS.

10. All employees eligible for premature payment of superannuation and compensation benefits under the terms of this agreement shall have their reckonable years in the NHS scheme doubled subject to a maximum enhancement of 10 added years. Total reckonable years (including enhancements) will in all cases be limited to the lesser of :-

- the total reckonable service that would have been attained by continuing in service to retirement age

or

- 40 years/

Provided that :-

(i) the enhancement of reckonable service for employees with relevant optant service shall be based on the aggregate of their reckonable NHS service and their relevant optant service;

(ii) any employee in the NHS superannuation scheme on the day immediately preceding the coming into operation of this agreement shall be entitled to enhancements calculated on the basis of the terms set out in SD (76)15 (SPN(HS) 11/1976 in Scotland if this results in a higher number of added years.

GENERAL.

11. The existing rules and conditions for the premature payment of superannuation and compensation benefits will, except where modified by this agreement, continue to apply.

IMPLEMENTATION.

12. The terms of this agreement will be implemented with effect from 4 November 1980 by regulations made under the Superannuation Act 1972 supplemented, as necessary, by guidance issued by Departments.

NOTE ON ELIGIBILITY FOR REDUNDANCY PAYMENTS.

13. Employees retiring prematurely under the terms of this agreement on

- redundancy (paragraph 1(i))

- organisational change (paragraph 1(iii))

will, where eligible under section 45 on the GWC Handbook, be additionally entitled to a lump sum redundancy payment under the terms of that Whitley agreement. The lump sum redundancy payment will be abated at the rate of 30% for each year by which enhancement of reckonable service exceeds 6 and two third years, with pro rata reduction for part years."

The Trust contracted out their payroll Department to the Respondents, BPS Public Sector Limited ["BPS"] and, by virtue of the provisions of TUPE there was a relevant transfer of the applicants' contracts of employment to BPS as from 1 September 1996. BPS moved their payroll business up to Glasgow and, thereupon, in 1997 the applicants were dismissed by reason of redundancy. They became entitled to payments falling due under the Whitley Council provisions in respect of redundant employees. BPS paid what was due to them under section 45, subject to one point mentioned below. The applicants claimed, but BPS denied, that they were also entitled to be paid sums falling due under section 46. If that claim is successful then the payment already made under section 45 will need to be adjusted.

Complaints were presented to the Industrial Tribunal seeking recovery of monies allegedly due under section 46, as at the date of termination of their employment.

The Industrial Tribunal concluded that the enhanced benefits under section 46 of Whitley in the event of redundancy and early retirement are pension benefits accruing due under an occupational pension scheme, and but for the redundancy event giving rise to accelerated payment, are benefits that would be payable at retirement age. Accordingly, they are benefits under an occupational pension scheme and, under Regulation 7 of TUPE, do not transfer as rights or obligations from the Trust to BPS.

The legislative provisions may be shortly summarised.

Article 3 of the Acquired Rights Directive provides as follows:

"(1) The transferor's rights and obligations arising from a contract of employment or from an employment relationship existing on the date of a transfer within the meaning of Article 1(1) shall, by reason of such a transfer be transferred to the transferee...

...

(3) Paragraphs 1 and 2 shall not cover employees' rights to old-age, invalidity or survivors' benefits under supplementary company or inter company pension schemes outside the statutory social security schemes in Member States."

Regulation 7(1) of TUPE disapplies Regulations 5 & 6:

"(a) to so much of a contract of employment as relates to an occupational pension scheme within the meaning of the Social security Pensions Act 1975 ... or

(b) to any rights powers duties or liabilities under or in connection with any such contract or subsisting by virtue of any such agreement and relating to such a scheme or otherwise arising in connection with that person's employment and relating to such a scheme."

Regulation 7(2) provides that:

"For the purposes of paragraph (1) above any provisions of an occupational pension scheme which do not relate to benefits for old age, invalidity or survivors shall be treated as not being part of the scheme."

For the appellants it was contended that section 45 and 46 were intended to be read together as a complete 'regime' for the determination of severance entitlements of employees in the three circumstances specified. Section 46 gives more valuable severance terms over and above the redundancy payments specified in section 45 to employees who fulfilled two basic qualifying conditions, namely:

being over 50; and

having paid more than five years worth of contributions to the NHS superannuation scheme.

The extra payments due under section 46 are, essentially, additional compensation for the loss of the job, over and above the redundancy payment. There is a contractual arrangement pursuant to which a qualifying employee who is made redundant is treated as prematurely retired, with consequent payments. The payments referred to in section 46 may reduce or extinguish the payments otherwise due under section 45, which demonstrates that the contract is providing for a single redundancy scheme, of which section 46 forms part.

Section 46 provides for the payment of pension between the date of redundancy and normal retirement age 60; an enhanced number of years of service which becomes payable from age redundancy to death, and lump sum compensation based upon the "enhanced slice". The monies to pay for the benefit under section 46 are funded by the employer; the payments are made to a redundant employee qua employee. Whilst the NHS pension scheme embraces both the 1995 Superannuation Regulations and the Compensation Regulations and is an occupational pension scheme within the meaning of the Regulation 7(1), by virtue of Regulation 7(2) the provisions of section 46 are deemed not to be part of the NHS pension scheme as section 46 makes provision for payment of redundancy payments and not benefits for age, invalidity or survivors benefit. A benefit is for those things because the person has reached old age, is an invalid or is a survivor. The fact that one of the conditions which must be fulfilled is an age requirement does not make the benefit a benefit for old age.

For the Respondents, it was argued that section 46 provides for enhanced accelerated pension payments in certain circumstances. Those specified circumstances are the trigger for the payments. Regulation 7 is compatible with Articles 3(3) of the Acquired Rights Directive: see Adams v Lancashire County Council [1996] IRLR 154 and the Court of Appeal's decision in the same case at [1997] IRLR 436 and Eidesund v Stavanger Catering [1996] IRLR 684. In no practical sense could the Respondents have assumed section 46 rights and duties. BPS were not party to the section 46 scheme; the applicants have lost the possibility of enhancement and acceleration of their rights to superannuation benefits but this is what is contemplated by Article 3(3) and Regulation 7. Effectively, the applicants are seeking to require BPS to compensate them for the loss of the possibility for enhancement and acceleration under the Superannuation Scheme; yet BPS were under no contractual obligation to replace so as to match or improve the benefits under the Scheme. In short, the Industrial Tribunal were correct to conclude that the benefits under section 46 were benefits relating to an occupational pension scheme within the meaning of TUPE Regulation 7(1)(a). Regulation 7(2) does not assist the applicants' case since section 46 clearly relates to benefits for old age invalidity or survivors (by accelerating and enhancing such benefits) but it is doubtful if section 46 represents "provisions of" an occupational pension scheme because the payments under that scheme become payable by virtue of statutory regulations rather than as a matter of contract.

It seems to us that:

1. The NHS Superannuation Scheme [the Scheme] is an occupational pension scheme within the meaning of the Social Security Pensions Act 1975 [subsequently repealed and replaced], and this was common ground.
2. As such, the Scheme is a pension scheme which is outside the statutory social security scheme, and this was also common ground.
3. Eligibility for benefits under the Scheme is governed by Whitley Council agreements which are incorporated into NHS employees' contracts of employment, again, common ground.
4. By virtue of section 45 paragraph 12, the employer was under a contractual obligation to pay to his employees the redundancy payment falling due under that section.
5. Under section 46 paragraph 12, its provisions were to be implemented by regulations made pursuant to statute, supplemented, as necessary, by guidance issued by Departments. The employers did not undertake any express obligation to make payment to their employees.
6. The benefits payable under section 46 of Whitley Council, provides both for the premature payment of superannuation and 'compensation benefits':

(1) the premature payment of superannuation is an annual 'pension' payment from the date of redundancy to normal retirement age pursuant to paragraph E 3 of the NHS Superannuation Scheme Regulations 1995. Part E is headed "benefits for members" and the amount of the pension is calculated in the traditional way by applying a fraction [1/80] in respect of each year of reckonable service to the pensionable pay. This is precisely the same calculation as is made when calculating 'normal retirement pension'.

(2) compensation benefits are calculated and payable by virtue of the 1981 NHS (Compensation for Premature Retirement) Regulations. Under paragraph 4 of these Regulations the premature retiree is entitled to receive a lump sum and an addition to his years of reckonable service.

7. The cost of making these payments under the Superannuation and Compensation Regulations falls on the employer. The rationale for this is that employing authorities should bear the cost of their own management decisions rather than these costs falling on the Pension Scheme.
8. By virtue of article 3 and regulation 7 an employee whose contract of employment is transferred is not entitled to demand from the transferee the same or similar pension rights as he previously enjoyed; nor does he have a right to join the transferee's own pension scheme. This represents a substantial lacuna in the protection afforded to employees affected by a relevant transfer: see the Adams decisions at first instance and in the Court of Appeal.

An NHS employee who is redundant, is treated for section 46 purposes as a premature retiree, entitled [if he qualifies] to receive from the Scheme, pursuant to the Regulations, a lump sum payment and annual payments. Unlike a section 45 payment, the employer does not promise the employee that he will pay these sums. There is a tripartite arrangement under which the employee is entitled under statute to receive the payments from the scheme, which is under a correlative duty to pay them. The employers owe to the scheme an obligation to provide the necessary funds, which is an obligation enforceable under the regulations. There is, plainly, we think, scope for arguing that as between employer and employee the employer is under a contractual obligation to make the payments to the scheme to enable the eligible employee to receive payment of the benefits. But we are not persuaded that there is any scope for implying a term in the collective agreement to the effect that the employer is under an obligation, owed to the employee, to pay the benefits. Such a term is not necessary, because employees have statutory rights to them. Further we are not persuaded that there is room for the implication of such a term having regard to the express obligation contained in section 45 which is missing in section 46, and to paragraph 12 of section 46 which expressly provides that its terms "will be implemented ... by regulations".

It occurred to the Court, during the course of admirable arguments presented to us that before considering the effect of Regulation 7 and Article 3(3) it was necessary first to identify the transferor's rights powers duties or liabilities "under or in connection with any" transferred contract of employment which were said to be transferred by Regulations 5 or 6. It appears that the applicants are not saying that the transferee has 'inherited' the same obligation as the transferor was under; but rather was saying that they were entitled to receive the same sums from BPS which they would have received under the Regulations had they remained in NHS service. Effectively, therefore, what the appellants are seeking is an annuity payment from BPS which would give them the 'missing' benefits. Such a payment would have to reflect the possibility that one of them might die in benefit and a survivor become entitled to payment. From a legal and practical point of view the transferee was not able to make payments to the Scheme so as to enable the Scheme to make the payments to the applicants. Thus, the obligation on the transferor to make payments to the Scheme has been converted into an obligation on the transferee to make payments to their redundant employees. On this analysis, we are of the view that the transferor was not under a contractual liability to make any payment directly to his staff in connection with section 46 and therefore there was no such obligation to be transferred under Regulation 5 or 6. On this basis, there would be no need to resort to regulation 7 because regulations 5 and 6 did not apply to make the transferee liable.

However, the burden of the argument concentrated on Regulation 7(2) and Article 3(3) and in deference to the able arguments we received and because the case may go further, it is right that we should give our decision on the issues raised.

There can be no doubt, we think, that section 46 of the collective agreement 'relates to an occupational pension scheme' within the meaning of Regulation 7(1). The words 'relates to' are wide enough to make the link between the agreement and the Scheme. Thus Regulation 7(1) applies. The question is then whether Regulation 7(2) disapplies 7(1).

On this question, the arguments were more neatly balanced. Regulation 7(1) is linking the terms of the contract of employment or collective agreement to the scheme. Regulation 7(2) concentrates on the provisions [in the sense of 'terms'] of the Scheme and asks whether they 'relate to' benefits for old age, invalidity or survivors. The provisions of the scheme in relation to superannuation benefits to redundant employees are 'triggered' by the redundancy dismissal, and not by the age of the employee. But provisions of a pension scheme do not, we think, cease to relate to benefits for old age merely because the employee has taken early retirement. Old age is not being used in the sense that 65 and over counts whereas less than 65 does not. 'Benefits for old age' are, we think, retirement benefits, or benefits which come from retirement [whether compulsory or voluntary, whether at normal retirement age or earlier]. These appellants, were, in order to give them benefits under the statutory scheme, treated as retirees; their benefits were calculated by reference to age and years of service; the benefits were transmissible to survivors on death. It seems to us that Mr Bartley Jones was right when he submitted that a benefit does not change its character or identity merely because it is enhanced or accelerated. Accordingly, although the benefits falling due to redundant employees was triggered by redundancy, the benefits retained their character as retirement benefits although accelerated and enhanced. We can see nothing inconsistent between this interpretation of Regulation 7(2) and Article 3(3) which speaks of "rights to old age benefits". We accept that it would be possible for there to be two schemes in existence: under one of which redundancy payments, akin to pension benefits, were calculated, and which would fall outwith the provisions of Regulation 7(1).

What has caused us more concern is what room there is for the application of Regulation 7(2) in the light of our ruling in this case. We invited Mr Bartley Jones to give us an example of what would be covered by Regulation 7(2). He could not do so, and we have been unable to think of one. The problem is that it is difficult to understand how any benefit payable under a pension scheme will not have the character of a pension benefit. In this case, payments under section 46 of Whitley would be effected on the basis that the recipient was a retiree. If, compatibly with the statutory controls over pension schemes, it were possible for redundant employees to be paid benefits from under the scheme without becoming retirees, then that might be a case where Regulation 7(2) could apply. However, on the facts of this case, the benefits were, in our judgment properly to be described as for old age.

Mr Millar for the appellants invited us to the view that it would be unfair to deprive the applicants of their benefits, which they had earned from their past membership of the scheme. We have some sympathy with that submission, but it should be kept well in mind that they did not have accrued rights to the redundancy scheme in the same way as they enjoyed accrued rights to their pension. The employers were required to fund the redundancy exercise as and when it occurred. There was no right to a benefit unless and until redundancy occurred. Having ceased to be employees in the Health service, they carried with them their accrued pension rights which they had earned. But having ceased to be in the service, their membership of the scheme came to an end in respect of rights which had not, as at that date accrued due to them. In order to have a benefit under section 46, it is necessary to be a member of the scheme at the date of the redundancy.

Accordingly, we are of the view that the learned Industrial Tribunal Chairman reached the right conclusion and we would wish to pay tribute to the careful and clear way he expressed his reasons.

The appeal is dismissed.