R & R Plant (Peterborough) Ltd v Bailey

This is an appeal, brought with the permission of Mummery LJ, against the decision of the Employment Appeal Tribunal (EAT) dated 18 May 2011. The appeal concerns the statutory procedure, laid down in Schedule 6 of the Employment Equality (Age) Regulations 2006 (the Age Regulations 2006), to be followed by an employer who wishes fairly to retire an employee at his or her normal retirement age. In particular, the appeal concerns the proper construction of paragraph 2(1) of those regulations. The appeal is of limited importance in that the relevant legislation has been repealed and replaced by provisions within the Equality Act 2010. However, we are told that a number of cases under the old legislation remain outstanding.

Mr Bailey was employed by R&R Plant Hire (Peterborough) Ltd from 1999. His normal retirement age was 65 and he was due to reach that age in January 2009. On 18 July 2008, his employer wrote to give him notice that he would be required to retire on his 65^th birthday. Mr Bailey did not wish to do so and by letter dated 14 August 2008 asked his employer to keep him on after that date. The employer declined to do so and dismissed Mr Bailey on his 65^th birthday. Mr Bailey brought proceedings in the employment tribunal (ET) alleging that his dismissal was unfair because his employer had discriminated against him on the ground of age and had not complied with the procedural scheme set out in Schedule 6 to the Age Regulations 2006.

The Schedule 6 scheme requires the employer to notify the employee of its intention to retire him at a particular date and gives the employee the right to request that he be kept on for a further period. The scheme provides that if such a request is made, the employer must engage in a consultation process with the employee. The employer is not bound to accede to the employee’s request but, if he does not consider it in accordance with the scheme, he is very likely to be found to have dismissed the employee unfairly.

The ET dismissed the employee’s claim holding that the employer’s letter of 18 July 2008 complied with its duty to inform the employee of his intention to retire him at age 65 and to inform him of his right to request that he be allowed to continue (the duty under paragraph 2 of the schedule). Also, as the employee’s letter of 14 August did not comply with the technical requirements imposed on him by paragraph 5 of the schedule, it was not a valid request to continue. Therefore there had been no duty on the employer to consider the request as required by the scheme under the schedule. The employer had not acted unfairly in dismissing the employee on the ground of retirement at his normal retiring age.

The employee appealed to the EAT, contending that the employer’s letter of 18 July 2008 had not complied with the procedural requirements of paragraph 2 of schedule 6. He also argued that the ET had been wrong to hold that his letter dated 14 August had not complied with the requirements of paragraph 5, although, before this court, he has accepted that it did not. He submitted to the EAT that, in all the circumstances, the dismissal was unfair. The EAT upheld the employee’s appeal. It declared that the employer had not complied with paragraph 2 and declared the dismissal unfair.

The employer appeals to this court, contending that the ET had been right in the first place.

The Age Regulations 2006 were introduced into domestic law to implement the requirements of the European Framework Directive (2000/78/EC) which established a framework for equal treatment in employment and occupation. The Directive included provisions to combat discrimination on the ground of age. The Age Regulations 2006 made general provisions relating to discrimination on the grounds of age, including a provision that an employer must not discriminate against a person on the ground of age by dismissing him. Regulation 30, however, created an exception to that general rule and provided that:

“Nothing in Part 2 or Part 3 (which parts contain the substantive provisions) 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.”

Thus, an employer who retired an employee at or over the age of 65 would not be committing an act of unlawful discrimination. Dismissal by reason of retirement at or over 65 was therefore a potentially fair reason for dismissal.

Schedule 6 to the Age Regulations 2006 is headed “Duty to consider working beyond retirement”. As explained above, it provides a procedural scheme for the handling of dismissal by retirement. Paragraph 2(1) provides:

“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.”

According to the interpretation provisions in paragraph 1(1), the ‘request’ referred to in paragraph 2(1)(a) means a request made under paragraph 5.

Paragraph 5(1) provides that the employee may make a request to his employer not to retire him on the intended date of retirement. Paragraph 5(3) provides:

“A request must be in writing and state that it is made under this paragraph”

If the employer gives valid notice under paragraph 2 and receives a valid request under paragraph 5, the employer is obliged to consider the request at a meeting and to inform the employee of the decision in writing (paragraphs 6 and 7). If the decision is to refuse the employee’s request, the employer must allow the employee to appeal against that decision (paragraph 8). The employee is entitled to be accompanied at the meeting and on the appeal (paragraph 9). The employee may initiate the procedure by making a request under paragraph 5 so as to take advantage of the consultation process.

Where an ex-employee who has been dismissed allegedly by reason of retirement brings a claim for unfair dismissal, the first question for the tribunal is, as always, to determine what was the reason or principal reason for the dismissal. That question must be determined in accordance with sections 98ZA to 98ZF of the Employment Rights Act 1996 (ERA 1996). These sections are headed “Retirement” and were inserted into Part X of the ERA 1996 (the part which deals with unfair dismissal) in 2006. Sections 98ZA to 98ZE make for provision for determining whether a dismissal is by reason of retirement in various different situations. Section 98ZD of ERA 1996 makes provision for the dismissal of an employee who has a normal retirement age of 65 and who is to be retired on a date at or after the normal retirement age. It is the section which applied to Mr Bailey’s case. Section 98ZD(2) provides that, where an employer has notified the employee, in accordance with paragraph 2(1) of Schedule 6 of the Age Regulations 2006, of his intention to retire the employee on a particular date and the contract of employment terminates on the intended date of retirement, the retirement of the employee shall be taken to be the only reason for the dismissal by the employer and any other reason shall be disregarded. Subsections 3 and 4 deal with specific circumstances with which we are not concerned in this appeal. If the employer has failed to give a notice which complies with paragraph 2 of schedule 6, the reason for dismissal may be held to be retirement or it may not. The tribunal must determine that question by reference to section 98ZD(5) which requires it to have regard to various factors, set out in section 98ZF. In summary, they require the ET to consider the extent to which the employer has complied with the rest of the procedural scheme apart from paragraph 2.

Once an ET has determined that the reason or principal reason for a dismissal was retirement, section 98ZG provides that the employee shall be regarded as having been unfairly dismissed if and only if the employer has failed to comply with one or more of its duties under paragraphs 4, 6, 7 or 8 of Schedule 6 of the Age Regulations 2006 which deal with the remainder of the employer’s obligations under the procedural scheme apart from paragraph 2.

It will be apparent from this summary of the operation of the legislative scheme that the schedule 6 procedure has advantages for both parties. If the employer complies with its duties under the scheme, it will be proof from a claim for unfair dismissal even if it refuses the employee’s request to continue. On the employee’s side, there is an advantage in that he or she can require the employer to give proper consideration to the request to continue, which may improve his or her chances of being kept on. If the employer then fails to give proper consideration to the request and dismisses the employee, the dismissal may well be unfair. Thus there is a distinct advantage to the employee in making a request under this scheme as opposed simply to asking the employer to keep him on.

In the present case, the questions for the ET and EAT were whether the notice given by the employer in his letter of 18 July 2008 complied with the requirements of paragraph 2(1) and whether the employee’s request dated 18 August 2008 complied with the requirements of paragraph 5.

The employer’s letter of 18 July, which was intended to comply with paragraph 2(1) of schedule 6 said:

“As your employer and under current legislation we are required to write to you six months in advance of your 65^th 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.”

The employee’s reply dated 14 August 2008, which was intended to amount to a request under paragraph 5, said:

“Thank you for your letter with relevant information about the law and my approaching 65^th 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.”

I observe first that the employee’s letter did not state expressly that it was a request made under paragraph 5. As I have said, paragraph 5(3) provides that the request must specify that. As the ET and EAT held and, as is now accepted by the employee, the employee’s request did not comply with paragraph 5 so as to trigger the consultations provisions.

It follows that, if the employer’s letter of 18 July 2008 complied with paragraph 2(1), the employer had done all that was required of him. The reason for the dismissal would be taken as being retirement and the fairness of that dismissal would follow. Accordingly, the crucial question for the ET was whether the employer’s letter satisfied paragraph 2(1). The ET held that it did. It did not give reasons for that conclusion but appears to have regarded the matter as self-evident. It did not address the question of whether the letter adequately informed the claimant of his “right to make a request” meaning the right to make a request under paragraph 5 of the schedule.

The EAT took a different view. It accepted the employee’s submission that the employer’s letter did not comply with paragraph 2(1) because it did not inform the employee in writing of his right to make a request under paragraph 5 of the schedule. The EAT was concerned that, if the employer wrote the kind of letter which this employer wrote, the employee would not be alerted to the requirements with which he had to comply in making his request to stay on. At paragraph 47 of its decision, the EAT said:

“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 paragraph 5 must be in writing and must state that it is made under that paragraph.”

The EAT amplified that conclusion. First, they considered that informing the employee about his ‘right’ meant his statutory right under paragraph 5. This was distinct from the right which an employee would have in any case to ask his employer to allow to work after his normal retirement date. So in order to be told about the particular right under the schedule which would trigger the consultation process, the employee had to be told the essential conditions by which it may be exercised. Second, the EAT was of the view that, because in most cases it will be the employer who initiates the procedure, the employer would have to find out what his procedural duties were. The EAT thought that it would not have been the intention of Parliament that an employer who “had achieved familiarity with the statutory procedure should then give notice of the employee in a way which would leave the employee in ignorance of the essential features of his statutory right”.

Accordingly, the EAT concluded that the employer’s letter had not complied with paragraph 2(1) of schedule 6. That being so, the employee’s dismissal was not deemed to be by reason of retirement pursuant to section 98ZD(5) of ERA 1996. However, that could have been the reason for the dismissal. The ET had not made a decision on that point. The EAT held that it was entirely plain from the ET’s findings, taken as a whole, that the reason for dismissal was retirement. That being so, it was necessary to decide whether that dismissal was fair, applying section 98ZG. The EAT considered that the outcome was plain. The employer had not complied with the statutory procedures under schedule 6 and the dismissal was unfair. The parties agreed compensation.

On this appeal, the only issue was whether the EAT was right to hold that the employer’s letter did not comply with paragraph 2(1) of the schedule. It was accepted that, if the EAT had been right about that, its subsequent reasoning and its conclusion that the dismissal was unfair could not be faulted.

Mr Changez Khan for the employer appellant and Mr Jason Galbraith-Marten for the employee respondent made succinct submissions, for which we were most grateful. The point is a short one.

Mr Khan submitted that the EAT had imposed a duty on the employer to tell the employee of the technical requirements for his request which paragraph 2(1) did not envisage. The EAT had imposed a gloss on the clear words of the paragraph. Paragraph 2(1) required the employer to tell the employee only that the employer intended to retire him on a particular date and that he was entitled to make a request not to retire on that date. There was nothing in the paragraph which required the employer to identify the statutory provision under which the notice was being given; still less was there any requirement to tell the employee what he had to do when making his request to stay on. Mr Khan accepted that it might be quite difficult for an employee to find the relevant statutory provisions so as to ensure that his request to stay on was in proper form. He accepted that an employee might well need help and advice for such a task but submitted that this would not mean consulting a solicitor. An advice centre would suffice. He pointed out that, if an employee wished to initiate the schedule 6 process himself (as he was entitled to do) he would have to find out how to go about it and that would mean finding out about the statutory provisions. Moreover, there were other types of process which an employee might wish to invoke which would be similarly difficult for him. For example, an employee might wish to apply for time off for training or trade union duties; he might wish to apply for flexible working.

Mr Galbraith-Marten did not seek to support the exact wording of the EAT’s decision. It will be recalled that the EAT had held that the paragraph 2(1) duty required the employer to tell the employee of the essential requirements for making a request to stay on. Mr Galbraith-Marten did not go so far. He submitted that the plain and ordinary meaning of paragraph 2(1) was to impose on the employer the duty to tell the employee that he had a right to make a request under paragraph 5 of schedule 6 of the Employment Equality (Age) Regulations 2006. That was because, if paragraph 2(1)(a) was read with the interpretation section, it was clear that the word ‘request’ meant a request under paragraph 5 of schedule 6. The words of the paragraph meant no more and no less. With that information, the employee would be alerted to the need to find out what he was required to do to make his request.

I accept the submissions of Mr Galbraith-Marten. In my judgment, the words of paragraph 2(1), read with the interpretations section, as they should be, require the employer to tell the employee that he has a right to make a request not to retire pursuant to paragraph 5 of schedule 6 of the Employment Equality (Age) Regulations 2006. Parliament had set up a statutory scheme which, if followed, had potential advantages to both employer and employee, over and above the consequences of the mere communication between the parties of a decision to retire the employee and the employee’s request to stay on. It is important, in my view, that the employee should be told that the employer is invoking a statutory procedure and not merely writing to terminate the employment. The way in which Parliament has provided for that information to be imparted is by requiring the employer to tell the employee that he has a right to make a request not to be retired under paragraph 5 of the schedule.

I would accept that Mr Galbraith-Marten was right not to seek to uphold the very words of the EAT. There is, in my judgment, no requirement under paragraph 2(1) for the employer to tell the employee what the requirements of his request will be when he comes to make it. It need tell him only that he has a right under paragraph 5 of the schedule. I would add that it might be said to be good practice for an employer to go the extra distance and advise the employee of the technical requirements he will have to comply with. However, there is no statutory requirement to do so. The intention of Parliament appears to be that, once the employee has been told of his statutory right to make a request, it can properly be left to him to him to find out how to go about making it.

It follows from what I have said that the EAT reached the right conclusion when it held that the employer’s letter of 18 July 2008 did not comply with paragraph 2(1) of schedule 6. I would therefore dismiss the appeal and add only an expression of satisfaction that this unnecessarily complex piece of legislation is no longer on the statute book.

I agree

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