HIS HONOUR JUDGE RICHARDSON
1.
This is an appeal by Mr Michael Bailey
(“the Claimant”) against a judgment of the Employment Tribunal (Employment
Judge Brian Mitchell presiding) sitting in Bury St Edmunds dated 29 April 2010. By its judgment the Tribunal dismissed his claims of unfair dismissal,
wrongful dismissal and age discrimination. He appeals only against the
dismissal of his claim of unfair dismissal.
2.
The appeal concerns Schedule 6 of the Employment
Equality (Age) Regulations 2006 (“the Age Regulations”). This Schedule has
now been repealed, as we will explain further below. We will, however, for
convenience use the present tense in describing its provisions.
3.
Sch.6 provides what is in effect a
procedural right for an employee whose employer intended to impose compulsory
retirement. Such an employer has a duty to notify the employee in writing of
“the employee’s right to make a request” under para 5: sch. 6, para 2(1)(a).
The employee can then make a request under para 5 not to retire on the intended
date of retirement. If the employee makes such a request the employer is
required to consider it by holding a meeting (para 6) and entertaining any
appeal at a further meeting (para 8).
4.
The employee’s right to make a request
under para 5 is hedged about with prescriptive requirements. This appeal is
concerned with a requirement in para 5(3) that the request must “be in writing
and state that it is made under this paragraph”. This is not a provision of
which most employees would be aware unless they are alerted to it in some way.
Two interlinking questions arise. (1) Is it the employer’s duty under para
2(1)(a) to inform the employee of the requirement? (2) Is it essential to the
validity of a request under para 5 that it must state that it was made under
that paragraph? Whether the employee was unfairly dismissed and with what
consequences will depend on the answer to these questions.
The legal context
5.
The Age Regulations were intended to give
effect to the requirements concerning age discrimination of EC Directive
2000/78 (“the Framework Directive”) which had established a general framework
for equal treatment in employment and occupation throughout the European
Union. The general effect of the Age Regulations was to prohibit
discrimination and harassment on grounds of age in the field of employment and
vocational training.
6.
However, the Age Regulations contained
what was in effect a special scheme to deal with retirement, focussing upon a
designated age of 65. We will call these “the DRA provisions”. The lawfulness
of these provisions was the subject of challenge: see R (Incorporated
Trustees of the National Council on Ageing (Age Concern England) v Secretary of
State for BERR (“Heyday”) [2009] IRLR 373 (ECJ) and R (Age UK) v
Secretary of State for Business Innovation and Skills (“Heyday”) [2009] IRLR 1017 (Blake J, Admin Ct). It was held that the scheme was lawful at the
time of its imposition; doubts were expressed as to whether a default age of 65
would survive a review.
7.
Most of the DRA provisions once contained
in the Age Regulations became incorporated into the Equality Act 2010.
However the DRA provisions have now been swept away: see the Employment
Equality (Repeal of Retirement Age Provisions) Regulations 2011, which took
effect (subject to limited transitional provisions) on 6 April 2011.
8.
The DRA provisions were summarised by
Blake J in Heyday as follows:
“The age of 65 has become a designated retirement age (“DRA”) in
the United Kingdom as opposed to a default position in the absence of a
contractual term. Employers will be able to dismiss on retirement grounds at
an earlier age but only if they can justify this measure as proportionate,
necessary and for a legitimate purpose ... Employers are not obliged to
dismiss workers at 65. They will be free to keep workers on in employment
after 65, but if they do so they may subsequently dismiss them on retirement
grounds without liability for unfair dismissal. Under new provisions
established by the Regulations employers are required to give a minimum period
of notice of an intended decision to retire employees and must listen to any
representations made by the employee against such a course under a procedure
spelt out in Schedule 6 to the Regulations.”
9.
It is the procedure under Schedule 6 to
the Regulations with which we are concerned in this case. This procedure was
one of the few parts of the Regulations to survive the passing of the Equality
Act 2010; but (as we have said) it has now been repealed.
The facts
10.
The Claimant was employed by R & R
Plant Hire (Peterborough) Ltd (“the Respondent”) as a motor vehicle engineer
repairing plant and machinery. The Respondent is a small company – a family business
consisting at the relevant time of about 6 employees. It supplies plant and
machinery on hire to the building construction industry. Mr Colin Rust was its
managing director.
11.
The Claimant’s employment began on 11 October 1999. The Tribunal found, and it is not in dispute on appeal, that he had a
normal retirement age of 65. His 65th birthday was 20 January 2009. On 11 July 2008 Mr Rust met with him and told him that he would have to
retire when he was aged 65.
12.
On 18 July 2008 Mr Rust wrote to the Claimant in the following terms:
“As your employer and under current legislation we are required
to write to you six months in advance of your 65th birthday to
formally inform you that when you reach 65 years of age you have to retire from
full time work.
Should you wish to continue employment beyond this date you are
required to make this application to the company in writing”
13.
On 14 August the Claimant replied:
“Thank you for your letter with relevant information about the
law and my approaching 65th birthday. I hope for the foreseeable
future to continue working full time for R & R regardless of age.
I enjoy my job and feel I give an excellent service and
commitment to the company.
As long as my health and strength survive I hope you will
consider my employment with you as a long term certainty.”
14.
Mr Rust met the Claimant on 12
September. He told him it was company policy that he should retire at the age
of 65. He held out the possibility of part-time work but no more. The
Claimant received no written notification of any decision. In January 2009 the
Claimant was still hoping to be kept on; but Mr Rust again said that the most
he could do was offer some part-time work when it was available. This was not
acceptable to the Claimant. His employment terminated on 20 January 2009.
Relevant statutory provisions
15.
Against that background we must now delve
into the DRA provisions of the Age Regulations. These provisions adopt
drafting techniques which are complex and opaque. We think we are on safe ground
if we say that no employee could possibly be expected to understand the
provisions as a whole without the clearest of guidance; and that no ordinary
employee could be expected to locate, read and apply paragraph 5 of Schedule 6
by the use of ordinary endeavour. We will use the present tense in describing
the provisions as they were applicable to the circumstances of this case,
although as we have said many provisions have since been replaced by the Equality
Act 2010, and all the DRA provisions have now been repealed.
16.
The starting point is Reg. 30, which
provided:
“30 Exception for retirement
(1) This regulation applies in relation to an employee
within the meaning of section 230(1) of the 1996 Act, a person in Crown
employment, a relevant member of the House of Commons staff, and a relevant
member of the House of Lords staff.
(2) Nothing in Part 2 or 3 shall render unlawful the
dismissal of a person to whom this regulation applies at or over the age of 65
where the reason for the dismissal is retirement.
(3) For the purposes of this regulation, whether or not the
reason for a dismissal is retirement shall be determined in accordance with
sections 98ZA to 98ZF of the 1996 Act.”
17.
The Age Regulations inserted sections
98ZA to 88ZF into the Employment Rights Act 1996. It would overburden
this judgment to set the provisions out in full. We will content ourselves
with explaining how (as we understand it) they would apply to the case of the
Claimant, an employee with a normal retirement age of 65.
18.
In order to do so, it is first necessary
to turn to Schedule 6 of the Regulations. This is entitled “duty to consider
working beyond retirement”.
19.
Schedule 6, paragraph 2 is headed “Duty
of employer to inform employee” and provides:
“2. Duty of employer to inform employee
(1) An employer who intends to retire an employee has a duty to
notify the employee in writing of -
(a) the employee’s right to make a
request; and
(b) the date on which he intends the
employee to retire,
not more than one year and not less than six months before that
date.
(2) The duty to notify applies regardless of –
(a) whether there is any term in the
employee’s contract of employment indicating when his retirement is expected to
take place,
(b) any other notification of, or
information about, the employee’s date of retirement given to him by the
employer at any time, and
(c) any other information about the
employee’s right to make a request given to him by the employer at any time.”
(Schedule 6, paragraph 1 provides that “request” means a request
under paragraph 5, to which we shall turn in a moment).
20.
Compliance with this duty has important
consequences. In the case of the Claimant, if the Respondent’s letter dated
18 July was a sufficient compliance, it would follow (since he was dismissed on
the intended date) that his retirement must be taken to be the only reason for
the dismissal by the Respondent and that any other reason must be disregarded:
see section 98ZD(2). The dismissal would not be unlawful age discrimination:
see reg. 30(2), quoted above.
21.
There will also be important consequences
for the law of unfair dismissal. Section 98ZG would apply (see section 98(3A)).
Section 98ZG provides:
“98ZG Retirement dismissals: fairness
(1) This section applies if the reason (or principal reason) for
a dismissal is retirement of the employee.
(2) The employee shall be regarded as unfairly dismissed if, and
only if, there has been a failure on the part of the employer to comply with an
obligation imposed on him by any of the following provisions of Schedule 6 to
the 2006 Regulations –
(a) paragraph 4 (notification of
retirement, if not already given under paragraph 12),
(b) paragraphs 6 and 7 (duty to
consider employee’s request not to be retired),
(c) paragraph 8 (duty to consider
appeal against decision to refuse request not to be retired).”
22.
Conversely, if the Respondent’s letter
dated 18 July was not a sufficient compliance, it would follow that the reason
for dismissal was open for determination by the Tribunal.
23.
The Tribunal could still find that
retirement was the reason for dismissal: see section 98ZD(5) and section 98ZF.
But it would not be bound to do so. It might find that the Respondent had not
established the principal reason for dismissal, in which case the dismissal
would be unfair: see section 98. Or it might find that the principal reason
for dismissal was some other reason falling within section 98(1) and (2), in
which case the Tribunal would have to assess whether the dismissal was fair,
applying section 98(4) of the Act.
24.
Moreover, in the event of non-compliance
with paragraph 2, an employee may make a complaint to the Tribunal; and if it
is well founded the Tribunal may make an award of up to 8 weeks’ pay: see
Schedule 6, paragraph 10.
25.
We turn next to paragraph 5 of Schedule
6. This provides:
“5. Statutory right to request not to retire
(1) An employee may make a request to his employer not to retire
on the intended date of retirement.
(2) In his request the employee must propose that his employment
should continue, following the intended date of retirement –
(a) indefinitely,
(b) for a stated period, or
(c) until a stated date;
and, if the request is made at a time when it is no longer
possible for the employer to notify in accordance with paragraph 2 and the
employer has not yet notified in accordance with paragraph 4, must identify the
date on which he believes that the employer intends to retire him.
(3) A request must be in writing and state that it is made under
this paragraph.
(4) An employee may only make one request under this paragraph
in relation to any one intended date of retirement and may not make a request
in relation to a date that supersedes a different date as the intended date of
retirement by virtue of paragraph 3(3) or 10(3)(b).
(5) A request is only a request made under this paragraph if it
is made –
(a) in a case where the employer has
complied with paragraph 2, more than three months but not more than six months
before the intended date of retirement, or
(b) in a case where the employer has
not complied with paragraph 2, before, but not more than six months before, the
intended date of retirement.”
26.
The making of such a request again has
important consequences. It triggers a duty on the employer to consider the
request by complying with paragraphs 7 and 8. These paragraphs, in summary,
require the employer to hold a meeting, give notice in writing of his decision
and (if the employee appeals) hold an appeal and give notice of the decision on
appeal. As we have seen, where the reason for the dismissal is retirement the
question whether the employer has complied with these provisions is central to
the question whether the dismissal is unfair: section 98ZG.
The Tribunal’s reasons
27.
The Tribunal’s reasons do not contain any
analysis of the question whether the Respondent’s letter dated 18 July 2008 was a sufficient compliance with Schedule 6, paragraph 2 of the Regulations.
28.
The Tribunal said (paragraph 16):
“16. Considering the matter under Section 98ZD therefore we are
satisfied that the date of termination fell on 20 January being the Claimant’s
birthday and that the employer complied with the requirement to notify the
employee six months before that date by his letter of 18 July informing him
that the would have to retire on his 65th birthday.”
29.
The Tribunal does not appear to have
considered expressly whether the letter complied with the duty to inform the
Claimant in writing of his right to make a request under paragraph 5.
30.
The Tribunal went on to consider whether
the Claimant had made a request complying with paragraph 5. The Tribunal
accepted the Respondent’s argument that the request was defective because it
did not state in terms that the request was made under paragraph 5 of the
Regulations.
31.
The Tribunal first quoted and followed an
earlier decision of an Employment Tribunal in Holmes v Active Sensors.
This passage read:
“19. The wording of the Section appears clear and was considered
in the Holmes v Active Sensors case. We adopt the rationale given in
the case as follows:
‘Paragraph 5(3) of Schedule 6 states ‘A request must be in
writing and state that it is made under this paragraph.’ These words are very
clear and the only interpretation is that ‘For any notice under paragraph 5 to
be valid it must state that it is pursuant to that paragraph. The Tribunal
note that a single stringent requirement is not placed on any notices that need
to be served by the employer. It is therefore quite clear that when the
Regulations were drafted the intention was that an employee should be placed
under this obligation when serving a request not to retire…While the Tribunal
find it surprising that the Regulation should place such an onerous burden on
the Claimant to refer specifically to the Regulations, it is nevertheless not
open to the Tribunal to do anything other than to follow the clear wording of
the Regulation.’”
32.
The Tribunal rejected an argument by the
Claimant that the language of paragraph 5 should be construed purposively so as
to accord with the Framework Directive. The Tribunal “reluctantly” concluded
that the words of paragraph 5 were clear and that the Claimant had not made a
request complying with that paragraph.
33.
It followed from these conclusions that
the Claimant’s claims for age discrimination and unfair dismissal failed.
34.
The Tribunal said, in parting from the
case:
“If our conclusion concerning the strict obligation in paragraph
5 of Schedule 6 is found to be incorrect, it may assist the parties to know
that we would have concluded that the dismissal was unfair by reason of the
failure of the employer to notify the Claimant as provided by paragraph 7 of a
result of the meeting, but that the employment would still have come to an end
at the Claimant’s 65th birthday if the correct procedure had been
adopted.”
Submissions
35.
On behalf of the Claimant Mr Young
submitted that the Tribunal erred in law in holding that the Respondent’s
letter dated 18 July was a sufficient compliance with para.2 of sch.6. The
letter should have referred to para.5 and its requirements expressly. He
relied on para.1(1), which states that a “request” means a request under
para.5. He submitted that the employer’s duty was to inform the employee of
the essential requirements of a para.5 request.
36.
Further, Mr Young submitted that the
Tribunal erred in holding that the Claimant’s letter dated 14 August was not a
valid request under para.5. He submitted that para.5(3) could be interpreted
so that the only essential requirement was for writing. A literal construction
of para.5(3) would, he argued, place a substantial and unjustified obstacle in
the way of an employee seeking to exercise the rights given to him by the Age
Regulations. He submitted that there were features within Sch.6 which
suggested that para.5(3) should be given a purposive construction. He contrasted
the wording of para.5(3) with para.5(5): only the latter expressly says that a
request is “only a request under this paragraph” if its requirements are not
met. Mr Young also suggested that consideration of para.5(2) alongside
para.1(2)(c) might lead to a similar conclusion.
37.
Mr Young further submitted that, since
the Age Regulations were introduced to give effect to the Framework Directive
it was appropriate to apply principles of construction laid down in such cases
as Pickstone v Freemans plc [1989] AC 66 Litster and ors v
Forth Dry Dock and ors [1990] 1 AC 546 and more recently EBR
Attridge Law LLP v Coleman [2010] 1 CMLR 28. These principles allowed
national courts to read down the words of a statute, or read words into a
statute, in order to ensure that the statute gave effect to the underlying
Directive.
38.
Mr Young accepted that the DRA provisions
were in effect a derogation from the Framework Directive and had been held
compatible; but he submitted that even so the words of para.5.3 should be read
down so as to ensure that the employee’s limited rights in connection with
retirement were not the subject of a technical obstacle of the kind which a
literal construction would place in the way of an employee. He placed
particular reliance on the approach of Blake J in the Heyday case
at paragraph 88:
“... Whilst the Directive permits the member state to make
derogations from the equal treatment principle in pursuit of legitimate social
aims, I conclude that the Regulations must spell out what derogations have been
made. The legislative context needs to identify the social policy aims that
have led to the derogation. The court needs to ensure that the aims are
legitimate and the means for giving effect to them are reasonable, necessary
and appropriate.”
39.
On behalf of the Respondent Mr Sims
submitted that para.2(1)(a) required an employer to do no more than place an
employee on notice that he had a right to request the employer to not to retire
him. Any other construction effectively read into para.2(1)(a) words which
were not there. If Parliament had wished to impose any greater requirement on
an employer it would have said so. Moreover he submitted that the Tribunal was
correct to read para.5(3) literally. He submitted that the words were too clear
to admit of any other meaning. Further he submitted that any other
construction would place an intolerable burden on an employer. By contrast,
all an employee would have to do to comply was read and follow the “clear
words” of Sch.6.
40.
Mr Sims did not accept that paras.2 and
5, read in the way for which he contended, placed any real obstacle in the way
of an employee. He submitted that, so long as an employee appreciated he had a
right to make a request, the primary purpose of the Schedule would have been
met. While Mr Sims accepted that the employee would lose any remedy or
sanction if he did not comply with the technical requirements of para.5, this
was a secondary matter.
41.
Mr Sims did not accept that there was any
validity in the argument that the Age Regulations should be interpreted in line
with the Framework Directive. The setting of a retirement age and the wide
discretion allowed in implementation of the Directive was emphasised in the Heyday
case both by the European Court and the High Court: see especially
paragraphs 18 and 34 of the judgment of Blake J.
Conclusions
42.
The right which Sch.6 of the Age
Regulations affords to an employee is called (in the heading to para.5) a
“statutory right to request not to retire”. Quite apart from Sch.6, an employee
is of course free to ask his employer not to retire him; but the statutory
right is more than this. Once the right is exercised, the employer is placed
under a duty to consider the request in accordance with a set procedure which
involves a hearing for the employee (with a right to be accompanied) and if
necessary a second hearing by way of appeal. It is true that the employer is
not required by Sch.6 to apply any particular criteria in making a decision
upon the request; nor is the employer required to give any reasons for the
decision notified to the employee. The right is essentially procedural in
nature.
43.
Since the right is intended to be
procedural in nature, we do not find it surprising that there are some
conditions attached to its exercise. An employer must be able to discern when
the right has been exercised. We therefore do not find it surprising that the
right must be exercised by the making of a request in writing, and that it must
be exercised sufficiently prior to the intended date of retirement for the
employer to consider the request in accordance with the statutory procedure.
44.
Speaking for ourselves, we find some of
the provisions of para.5 surprising. We do not see why there is any need to
provide that a request is “only made under this paragraph” if it is made not
more than six months before the intended date of retirement. This means that
an employee who immediately responds to a notice given under para.2 by giving
notice under para.5 may find that his notice is premature. Likewise we do not
see why there is any need to provide that a request must state that it is made
under para.5. In the vast majority of cases the employee’s request will be
consequent upon a notice under para.2 from the employer. The employer ought to
be ready to deal with a written request in accordance with the legislation.
45.
Nevertheless, we consider that the words
of para.5 are clear in their meaning. In particular, we have no doubt that the
requirements of para.5(3) are mandatory. A request under para.5 must be in
writing and must state that it is made under this paragraph.
46.
How, then, is an employee to know that
his request must comply with this requirement? As we have said, an employee is
not likely to discover the requirements of para.5 unless alerted to them in
some way.
47.
In our judgment the answer lies in
para.2(1)(a). The employer’s duty to notify the employee in writing of the
employee’s right to make a request places upon the employer a duty to inform
the employee of the conditions which are essential if a valid request is to be
made. Thus, for example, the employer must notify the employee that a request
under para.5 must be in writing and must state that it is made under that
paragraph.
48.
We reach this conclusion for two reasons.
49.
Firstly, as we have said, the right
afforded by para.5 is essentially a statutory procedural right. It is the
statutory procedural right about which the employer must notify the employee
under para 2(1)(a); see para 1(1)(b). In our judgment an employee is not informed
of the statutory procedural right merely by being told that he may make a
request not to retire – after all, an employee may always make a request not to
retire. He is informed of the statutory procedural right only if he is told
the essential conditions by which it may be exercised.
50.
Secondly, Sch.6 contemplates that in the
general run of cases it will be for the employer to initiate the procedure
which results in retirement. Para.2(1) imposes a duty on him to do so. It is
true that an employee may still serve a request under para.5 even if an
employer has not given him notification (see para.5(2)), but this is an
additional protection for an employee whose employer has not complied with his
duty. Since the employer must generally initiate the procedure, the employer
must inform himself about the requirements of Sch.6. It was surely not the
intention of the Regulations that an employer, having achieved familiarity with
the statutory procedure, should then give notice to the employee in a way which
would leave the employee in ignorance of the essential features of his
statutory right.
51.
We do not think this construction places
an impossible burden on an employer. An employer can comply with it in more
ways than one. He can copy the relevant provisions for the employee. He can
summarise them. He can provide the employee with an application form for a
statutory request designed to ensure that the request is compliant.
52.
We read the provisions of Sch.6 in this
way by adopting ordinary, common law, principles of statutory construction. We
have not found it necessary to resort to any special interpretive technique by
reason of the European background to the legislation. We therefore need
express no view concerning the interesting arguments which we heard on that
question.
53.
It follows from our conclusions that the Respondent’s letter dated 18
July did not comply with the duty set out in para.2 of Sch.6.
54.
This being so, section 98ZD(2) is inapplicable. The Claimant’s
dismissal is not deemed to be by reason of retirement. But it remains open to
the Tribunal to find that the reason is retirement: see section 98(2)(ba),
section 98ZD(5) and section 98ZF.
55.
The Tribunal did not have to make a finding on this question. But it is
entirely plain from the Tribunal’s findings taken as a whole that the reason
for dismissal was retirement.
56.
Since retirement was the reason for dismissal, the fairness of the
dismissal was to be assessed applying section 98ZG. Again the outcome is
plain. The Respondent never complied with the duty under para.2 and para.4.
Accordingly the dismissal was unfair: see section 98ZG(2)(a).
57.
We discussed with the parties what should happen if this were to be our
conclusion. The parties addressed us on remedy. The Claimant seeks
compensation – in particular a basic award. We will make such an award. In
the light of the Tribunal’s findings it is not just and equitable to award
compensation after the date of retirement: see paragraph 25. We asked the
parties to agree the amount of the basic award and they have done so. We have
been asked by letter to make a modest award for loss of statutory rights; but
on the Tribunal’s findings these statutory rights would in any event have been
lost at the same time.
58.
For these reasons we will allow the appeal; we will declare that the
Claimant was unfairly dismissed; and we will award a basic award in the sum
(agreed by the parties) of £4455.
