Verner, R (on the application of) v Derby City Council

I have before me three cases seeking Judicial Review which are raised as “test cases” in an attempt to obviate individual decisions in the body of disputes – already over a hundred and a number that will grow with time – of a similar kind to the three. The question raised is whether, when a teacher has applied for and accepted ill-health retirement benefit, usually a lump sum and a pension, on the ground of permanent incapacity, there exists a public law duty on his employer to dismiss the employee. The feature which is at first surprising is that it is the employees who are insisting that the employers are thus bound to dismiss them. The reason for that unusual twist lies in the form, to which I will refer, of “the Burgundy Book”, the teachers’ standard-form Conditions of Employment. I will also have to look at the pension provisions and at statutory regulations relating to teachers’ employment. There are also three decided cases in the area which will require close study. The facts, though, give rise to no dispute; the three teachers (“the Teachers”) whose cases are before me were each (and, as they urge, still are) employed under the terms of the Burgundy Book; each was subject to the regulations to which I will refer and each applied for and has accepted ill-health retirement benefit on the ground of permanent incapacity (“IHRB”).

The Teachers appear by Mr John Cavanagh Q.C. leading Mr Nicholas Randall. The employers, a different Local Education Authority or employer in each of the three cases, all appear by Mr James Goudie Q.C. leading Mr Peter Oldham.

I shall turn first to the pension provisions.

All the Teachers have become entitled to receive, have received and are continuing to receive IHRB under the provisions of the Teachers’ Pensions Regulations 1997 as amended (“the Pension Regulations”). I will need to deal later with what is said and done when IHRB is sought but first I need to refer to the Regulations themselves.

The Pension Regulations regulate a contributory scheme for teachers. A glossary is contained in Schedule 1. A teacher is taken to be “incapacitated”, so far as material, “while he is unfit by reason of illness or injury and despite appropriate medical treatment to serve as such and is likely permanently to be so”. Part B of the Regulations provides, with respect to teachers of the type with which I am dealing (erstwhile full-time teachers and at schools of the appropriate kinds), that they are to be in “pensionable employment” whilst in employment - (B 1 (1)) - but that is then cut down by B 4 (1) (b) which, so far as relevant, denies the title “pensionable employment” to a teacher whose sick pay entitlement has expired. Under the contractual provisions which I shall come on to, a teacher’s pensionable employment, in the case of teachers of 4 or more years employment such as are the cases before me, would therefore usually expire not later than the 200^th working day of his or her unbroken absence on the grounds of illness. All the Teachers satisfy that. None is therefore now in “pensionable employment”.

Section E 4 of the Pension Regulations is headed “Entitlement to payment of retirement benefits” and provides a number of “Cases” in which a person falling within the Case becomes entitled to payment of retirement benefit. Paragraph E 4 (4) provides:-

I need not refer to Case D but it is the case that with respect to every Teacher all the provisions of Case C are satisfied. In consequence the entitlement to retirement benefit has taken effect – E 4 (8) – and did so as soon as he or she fell into that Case. In practice, the Teachers thus each became entitled to IHRB, their respective 200 working days of sick benefit having expired, on the earliest date on which (i) it was accepted by the administrators of the Teachers’ Pension Scheme that each respectively was likely permanently to be unfit to serve as a teacher and (ii) that the notification by the Secretary of State as referred to in the closing words of Case C had been given.

It will have been noted, firstly, that a cesser of pensionable employment is, of itself, not necessarily a cesser of employment, nor, so far as has been there expressed, even a cesser of employment as a teacher and, secondly, that there is no part of the Pension Regulations that expressly requires a “retirement” or a “resignation” (whatever either term may mean) before IHRB may be paid and received.

All the Teachers were employed and, if their submissions succeed, are still employed on the “Conditions of Service for School Teachers in England and Wales”, revised edition August 2000, a booklet which, including the printed commentary thereon by the National Employers Organisation for School Teaching and 6 Teachers’ Organisations, is of some 70 pages. The Conditions are the fruit of negotiations between 8 bodies including the Local Government Association and a number of appropriate Unions and professional associations. The Conditions regulate the employment of literally thousands of teachers in England and Wales and are commonly referred to, as I have mentioned, as “the Burgundy Book”. Despite their 70 pages, the Conditions are not said to be exhaustive but I have not been taken to any additional terms adding to or qualifying those of the Burgundy Book.

In that Book “teachers” is a term defined, with the exceptions irrelevant for present purposes, to mean all teachers who work in schools – section 1 clause 1.1. Section 3 clause 2.1 provides for teachers resigning their appointments; they are to give the notice required by section 3 clause 4.

That clause specifies that teachers “shall be under a minimum of 2 months’ notice and in the Summer Term 3 months’, terminating at the end of a school term ….”. Longer notice is required from or to head teachers. Where a teacher shall have been continuously employed for more than 8 years, such a teacher is entitled to receive longer notice as specified in the Employment Rights Act 1996. By section 3 clause 4.4 it is provided that these terms:-

The Burgundy Book makes provision – section 3 clause 6.1 – for automatic retirement at a certain age and mentions that retirement before that age may entitle the teacher to benefits under the Regulations there specified. There is no specific reference there to retirement giving rise to any contractual benefit.

Section 5 of the Burgundy Book is as to the sick pay scheme; clause 2.1 provides, for example, that, in general, a teacher absent from duty because of illness in his fourth or subsequent years of employment is to be entitled to full pay for up to 100 working days and half pay thereafter for a further 100 days. The employer is given a discretion to exceed the minimum specified. Section 5 clause 6 (which I shall call “Clause 6.1”) is very relevant and needs to be set out in full:-

Crucial to the cases before me is the “and” in the second line. The Commentary to which I have referred mentions that this Clause 6.1 is nothing new but is merely “a slight redraft” of the provision in the earlier edition of the Book. There is no express provision whereby the employer has to give the notice referred in Clause 6.1 or whereunder the employee whose sickpay has been exhausted or who chooses to apply for or accept IHRB is required to give or is deemed to have given any notice, nor any provision such as provides that thereafter his employment shall be ended. In such circumstances and in the light of the case, to which I shall return, of R. on the application of Dorling –v- Sheffield City Council and the Governing Body of Woodthorpe Primary School [2002] ELR 367 (“Dorling No. 1”), it is common ground that teachers otherwise falling within the description in Clause 6.1 but who have not been given the notice of termination there referred to have no contractual right to insist upon service of such a notice upon them.

However, it is the hope and expectation of the Teachers that if notices of termination of contract can be extracted from their employers, so far unwilling to serve them, then the employees will, without more, become liable to be paid “their full salary for the notice period with normal deductions only” as Clause 6.1 contemplates. I must emphasise that I have not been concerned with whether those hopes and expectations are well founded. Mr Goudie says in passing that they are not but the question has not been argued and nothing I say is intended to deal with it. The questions before me are, rather, whether there is firstly, in Clause 6.1 cases, some obligation upon the employer to serve notice of termination on the employee, a duty arising other than under contract? Secondly, if there is, is Judicial Review an appropriate way of procuring performance of that duty? It is the Teachers’ case that there is such an obligation, that it arises under the legislative provisions to which I will now turn and that it is a public duty as to which Judicial Review is the appropriate way in which performance of the duty is to be obtained.

It should cause no surprise that the legislature has thought it right to regulate entry into and continued employment in the teaching professions. The relevant regulations with which I am concerned begin with those made under section 218 of the Education Reform Act 1988 which are entitled “The Education (Teachers’ Qualifications and Health Standards) (England) Regulations 1999 SI 1999 No. 2166 (“the 1999 Regulations”). I have not been told of any corresponding Regulations applicable in Wales so that it will be for consideration whether the “test cases” I am dealing with provide a conclusion applicable in Wales even if my conclusion as to the English position is right.

Regulations 3 and 5 together of the 1999 Regulations define “relevant employment” as, broadly speaking, employment as a teacher but, to ensure that the requirements of the Regulations are not escaped by way of some device such as the supply of services by way of, say, a service company or self employment under a contract of services, Regulation 5 (3) provides:-

It is apparent from that, especially from the words “otherwise than ….”, that the 1999 Regulations contemplate that even where there is a contract of employment it will, if it is to be relevant employment, be a contract that is for or includes a provision of services as a teacher. Regulation 6 makes express provision for persons in continuing receipt of IHRB; they are in general – Regulation 6 (4) - not to be appointed to employment as teachers. Then, in Regulation 7 (“Reg. 7”), is the provision the effect of which is very much in issue in these proceedings. It provides:-

It is common ground that the reference in Reg 7 to the duty of the employer under Part II of the Disability Discrimination Act does no more than to provide that the Court will contemplate, where relevant, that the employer has complied or will be required to comply with his duty to make adjustments under the DDA, but that the teacher nonetheless does not have the capacity for employment as such. It is also common ground that all the Teachers do not have the capacity to which Reg 7 refers.

Further current regulation of teachers is to be found in the Education (Restriction of Employment) Regulations 2000 (“the 2000 Regulations”). Again “relevant employment” is defined, so far as is material, as employment “as a teacher” although, again, employment is similarly widened to include, for example, teaching by way of a contract for services. Under the provisions of 2000 Regulation 5 the Secretary of State is given discretionary powers exercisable, inter alia, on medical grounds and subject to such qualifications as he may might specify:-

There is yet further statutory regulation, concerning the manner in which teachers’ employment may be ended. The provisions – in the School Standards and Framework Act 1998 – vary according to the type of school concerned.

As for Foundation, Voluntary and Foundation Special Schools, the governing body is not to dismiss any teacher without the consent of the local education authority – section 55(4) – and Schedule 17 paragraph 24 to the 1998 Act provides a sequence whereunder the Governing Body, the teacher’s employer, is to provide the employee with an opportunity to make representations, for appeal and for the giving of notice by the employer. There is, though, express provision that where the termination:-

As for Community, Voluntary Controlled and Community Special schools, Schedule 16 of the 1998 Act provides that there (where the LEA is the employer) the rather involved specified dismissal process includes the governing body giving an opportunity to be heard to the person proposed to be dismissed, for notices, for appeals, for the governing body coming to a determination, for the LEA to be notified of that in writing, and for the LEA then to give notice of dismissal – Schedule 16 paras 27 & 25. Para 29(1) of the 16^th Schedule provides that the LEA should not dismiss a person except as that schedule provides, but, again, a dismissal required by way of regulations made under section 218 supra is exempt from that requirement. As was the case in the other classes of schools, no alternative procedure for dismissal is specified.

It would, of course, have been a useful argument against Reg 7 automatically and without more causing termination of employment once its terms were made good had the elaborate dismissal procedures in the School Standards and Framework Act 1998 been applicable to Reg 7 cases. That is plainly not the case. However, it is not possible to jump, by reason only of the inapplicability of those dismissal procedures, to a conclusion that Reg 7 does have automatic effect.

I mentioned at the outset that there are 3 decided cases in the area which would require close study. They are Dorling No. 1 supra, then R. (on the application of Dorling) –v- Sheffield City Council [2002] 486 (“Dorling No. 2”) and Healey –v- Bridgend CBC [2002] EWCA 1996, 14^th November 2002 (“Healey”).

As for Dorling No. 1 there is a sense in which this case can be put to one side; its one conclusion, that Clause 6.1 does not contain nor require by implication any contractual obligation upon the employer to dismiss a teacher in the circumstances of that case (materially the same as those of the cases before me), is not in issue but for the purposes of argument is accepted as correct by both sides. Its reasoning could to that extent have been left unexamined as irrelevant. However, Mr Cavanagh invites me to examine it and I do so.

First of all, although the employer’s Counsel in Dorling No. 1 had argued that the employee had, on the facts, “in effect retired from his employment as a teacher and must be treated as having resigned”, the case provides no answer to whether or not that was so. The reason why there was no answer was because both sides before Patten J. agreed that the Learned Judge should deal with whether there was a contractual obligation to dismiss – page 371 [8]. The answer to that latter issue was agreed by the parties to suffice to decide the case. Once that was agreed, it was unnecessary to argue or to decide whether the teacher had, in effect, resigned or whether the contract of employment had already terminated by reason, for example, of the doctrine of frustration or by some other operation of law. Accordingly Patten J. did not have the benefit of any citation such as I have had, of, for example, Watts –v- Monmouthshire CC [1968] 66 LGR 171 C.A.; Tarnesby -v- Kensington & Chelsea Area Health Authority [1981] ICR 615 H.L. or, of course, Healey, heard after Dorling No. 1 on the 14^th November 2002. Dorling No. 1 therefore leaves much of the argument before me quite untouched. It was there common ground on the facts that Reg 7 required that the employment must be terminated and that that required either dismissal or resignation – page 374 [12]. That there were other forms of termination that could operate or had already operated was never dealt with nor needed to be, given the approach which the parties had agreed. Indeed, the Learned Judge needed to do no more, finally, than to postulate that the employee had not resigned and was unwilling to do so; he said, with my emphasis, “If the true position in this case is that Mr Dorling has not resigned and is unwilling to do so then …..”.

Nor was there in Dorling No 1 any examination of the consequences where an employee voluntarily initiates the IHRB process. The case proceeded on the basis that if there was no other act of resignation by the employee (other, that is, than a successful application in the standard form for, and acceptance of, IHRB) then Reg 7 required a dismissal by the employer. Quite leaving aside other forms of termination as in the preceding paragraph, Patten J. had no need to decide whether, where the retirement was initiated by the employee, there was a duty on him to resign, a duty antecedent to any on the employer to dismiss him.

It may also be that the reasoning is not of general application in that, in a case where the employee was the initiator of the IHRB process, relevance was ascribed by the employer’s Counsel to the procedures of Reg 7 (2) – see page 373 [10] - notwithstanding that, as Patten J. held, the Reg 7 (2) process was for cases where it was the employer that was the initiator – page 375 [13].

In all these circumstances whilst, as I have mentioned, both sides unquestioningly accept Dorling No. 1’s conclusion, the argument and citation of authorities which they have put before me differ so substantially to that before Patten J. that I feel free, if a case is made out for me to do so, to depart from the reasoning underpinning the conclusion in Dorling No. 1.

To the extent that the facts are set out in the decision they would seem to be indistinguishable from the general run of the facts before me. In Dorling No. 2 the employee had said that he was not obliged to resign and the employer had said that the employment had automatically ended. Goldring J. in general agreed with the conclusions of Patten J. and his reasoning – page 494 [14]. To that extent if, for the reasons I have given, I feel free to depart from the underlying reasoning in Dorling No. 1 then so equally should I be free to depart from the reasoning in Dorling No. 2. But there are a number of further points that suggests that it may be wrong for me simply to adopt the reasoning in Dorling No. 2.

First of all, unlike the position before me, in that case the argument put by Counsel does not seem to have drawn attention to the way in which IHRB is applied for and may be granted. Secondly, Watts supra was not drawn to the Learned Judge’s attention and there appears to have been no citation relating to the doctrine of frustration. Thirdly, although Tarnesby supra was cited, it was distinguished on a basis no more fully explained than that Tarnesby and the case before the Learned Judge were both cases of statutory interpretation and that the statutory provisions differed. It may be, in the light of argument that I have heard, that such an obvious difference is not a true distinction and that the principle underlying Tarnesby is a principle applicable in the cases before me. Next, at his paragraph [10] the Learned Judge said, of Counsel for the Defendant, that he:-

Next the Learned Judge said at page 493 [12]:-

Nor either, in the light of argument I have heard, can I be sure that Regulation 5 of the 2000 Regulations would be otiose (as was held in Dorling 2) if Reg 7 brought employment to an end without the need for any notice of dismissal to be served – see 493 [13]-494. There is no reason why the employment brought to an end by an operation of Reg 7 (1) without any notice being given (supposing that is the way in which Reg 7 (1) can operate) is the same employment or employment by the same employer as that which the Secretary of State wishes to bring to an end under Regulation 5 (2) of the 2000 Regulations. One Local Education Authority, for example, not knowing of a teacher’s earlier termination for incapacity by some other LEA upon an (assumed) automatic operation of Reg 7, might unknowingly employ him afresh, despite the provision to the contrary, in circumstances in which the Secretary of State, on learning of that, might, on medical grounds, wish to bring that second employment to an end. It is, as I mentioned, therefore not plain that automatic operation of Reg 7 (1) would make Regulation 5 of the 2000 Regulations otiose. I add that, so far as one can tell, the judgment in Dorling No. 2, delivered orally on the 14^th November 2002, was delivered before the conclusion of the argument in the Court of Appeal, a fortiori before the judgment, in Healey. Dorling No. 2 could thus contain no consideration of Healey and Healey (which I will return to later) contained no reflections upon Dorling No. 2. In the circumstances, however tempting it would otherwise be, I cannot decide the test cases before me on the simple basis that the issues they raise have already been determined by Dorling No. 2.

In describing the manner in which IHRB is sought I shall take Anne Ridley’s case as, in general, typical. On the 31 October 2001 she, a long established teacher at her school, began long-term sick leave. On the 2 October 2002 her entitlement to any sick pay had expired. In the meantime, she had made an application to Teachers’ Pensions (“T.P.”) for ill-health retirement. She did that on 1 September 2002. Unusually, it was, in her case, a second application, but nothing turns on that. There is no suggestion that the decision so to apply was other than her own but, of course, it may well be that she was sad and reluctant in doing so.

She completed a standard application form. The application form had been supplied to her along with a series of notes from T.P. headed “Answers to some questions about Teachers’ Ill-Health Retirement Benefits and Short Service Incapacity Grants”. The content of such Notes varied as between March 2000,April 2002 and November 2002. In the Notes which Mrs Ridley received the question “When will I receive details of my benefits?” was answered, in part, as follows:-

The notes on the application form itself read that after completion of the form – a form 18 – by the applicant it was (save in one irrelevant exceptional case) to be sent to the employer. It is then sent to T.P.. The form is headed : “Application for Ill-Health Retirement Benefits or A Short Service Incapacity Grant”, and, at the top of the first page, one finds a note which, echoing the accompanying Notes, says:

To continue with Mrs Ridley’s case, on the 2 October 2002 TP wrote to her saying:-

As I have mentioned, Mrs Ridley’s case is typical and (leaving aside the changes in the accompanying Notes from time to time) the only difference between the 3 cases before me that is said to be material is, in Mrs Sheppard’s case, that when she sent the form 18 to her school, she accompanied it with a note saying that “at this point” she was not resigning from her post. As no one could reasonably suggest that at that point she was resigning, I do not regard the difference as of any significance. What applies to Mrs Ridley’s case may thus be taken to apply to all.

Although such letters are not before me in every case it would seem that as a matter of common form T.P., when granting IHRB, sent letters out not only to the employees such as I have indicated in Mrs Ridley’s case but also to the employer saying, if the employee was granted IHRB, inter alia:-

In some other cases the opening 5 words were omitted, making it more plain that the indication that a termination of employment was to be arranged applied whether or not active teaching was going on.

T.P. thus echoed to the employer what the applicant had been told in the accompanying Notes and at the top of her form 18 but now cast it in terms of the employer making the arrangement. Both employer and teacher are thus told to arrange an early termination.

In form 18, the box, box 13, for “last date of employment or proposed date of retirement” was, as I have mentioned, left unfilled-in by Mrs Ridley. In Mrs Verner’s case a date was filled in, a date earlier than the date of her application. Nothing in her form indicated whether she was giving the date as her last date of employment or as her proposed date of retirement. In Mrs Sheppard’s case a date was given, again a date before the date of her application, but Mrs Sheppard had underlined the words “proposed date of retirement” and had written on the form “not yet agreed”. It cannot be said in any of the cases before me that the way that Box 13 had been completed in Form 18 signified an acceptance of some particular date as a last date of employment by the person applying for IHRB.

Mr Goudie has three arguments each of which, if right, has the consequence that a teacher who has applied on incapacity grounds for ill-health retirement and whose application has been accepted and who has in turn therefore received IHRB will have had his or her employment terminated before, and therefore without any need for the service of, a notice under Clause 6.1. If Mr Goudie succeeds on any of the three then there is no need to consider whether there is, as the Teachers urge, a public duty to dismiss the employee in the circumstances I am dealing with as the alleged duty would in such a case have no reason to have been called into existence and therefore could be presumed not to exist; what the supposed duty would serve to do would invariably have already been done.

Of the three arguments, I deal first with that which relies upon Healey supra.

Mrs. Healey, a Head Teacher in Wales, became unwell. She and her Union representative met the Director of Education of the Local Education Authority which was her employer and it was agreed that she would apply for IHRB. She did so, completing a Form. There is no reason to think it omitted the note at the top that indicates that if the application was accepted the applicant was to arrange a termination of employment. Her application was granted; T.P.’s letter to her told her that she should arrange for the earliest possible retirement date to be agreed with her employer, but not, in terms, so far as one can tell, that she was to arrange for her own employment to be terminated, although T.P. shortly thereafter did indicate to her employer that such a termination was to be arranged. The employer sought to make arrangements with Mrs. Healey but to no avail : she was on strong medication and did not return his calls. Eventually the employer wrote to her ;

Mr. Recorder D Wyn Rees dismissed her claim and she appealed.

The judgment of Ward LJ in the Court of Appeal, with which Schiemann and Longmore LJJ agreed, said - (paragraph 4) - of the meeting with the Director of Education;

In a short judgment which I cite in full Schiemann LJ said;

Mr Goudie sees Healey as a decision, binding upon me, that justifies a proposition that an employee who, of her own volition, decides to apply to T.P. for IHRB and who thus completes the appropriate form 18 and accordingly passes it on to her employer with a view to its being sent on to T.P. is an employee who, without more, thereby signifies that if T.P. accept her application and if she is paid and accepts IHRB she will resign her employment on an early date, a date which, in the absence of an earlier date being proposed by her, will be taken to be the date immediately before the day on which the IHRB becomes payable.

Not so, says Mr Cavanagh. He seeks to distinguish Healey on the ground that in Healey there was the conversation with the Director of Education which, he says, plainly went beyond a mere indication that Mrs Healey was intending to retire, to complete her Form 18 and to see to its being forwarded to the employer and on to T.P.. There was, he said, an indication by her of a decision, rather than merely an intention, to retire. He refers in particular to the passage I have cited from his paragraph 16 in which Ward LJ said that she must at the meeting with the Director have conveyed to him a decision to retire. Mr Cavanagh adds that if the meeting was insignificant and the application for and grant of IHRB alone sufficed, why was it that the meeting was so often referred to by the Court of Appeal? I take the point but I cannot assume, in the absence of anything further, that the meeting was significant in content simply because it was frequently mentioned.

The Court of Appeal in Healey had in front of it, I am told, a transcript of the Learned Recorder’s decision and of some oral evidence given briefly below but not copies of the witness statements he had had before him. The Learned Recorder’s judgment says only of the meeting with the Director of Education that it was agreed at it that Mrs Healey would make an application for IHRB. No witness statement or transcript of oral evidence indicating that more than that was then agreed or said has been shown to me and I would have expected that if at the meeting something more categoric had been agreed then both the Learned Recorder and Ward LJ would have specifically referred to what had been said. I do not read Schiemann LJ’s words (that in the circumstances of the case “the appellant was informing them that she would retire…..”) as intended to identify that Mrs Healey and the Director had agreed that in so many words or that the appellant had indicated some irrevocable decision to retire. Schiemann LJ did not say “the appellant told them” and the way he framed his brief reference (she “was informing them”) suggests to me that he was agreeing with Ward LJ that an employee who completed the Form 18, who handed it to his or her employer, who saw to its being forwarded to T.P., whose application was accepted and who then accepted the retirement benefits, was a person who, in such circumstances, was to be treated as having given notice of an intention to retire immediately the IHRB began. Moreover, it surely was intrinsically unlikely that at that initial meeting with the Director, when Mrs Healey could not have known whether her application for IHRB would be successful, that she would have indicated some unconditional intention to resign or retire. She might, of course, have indicated that she would retire if her application for IHRB was successful but that was the very circumstance with which Ward LJ specifically dealt.

I add that the Teachers also seek to distinguish Healey on the ground that the Court of Appeal itself recognised that it was not dealing with a “Dorling” claim, one in which the teacher is asserting that the employer was under a duty to dismiss. That, though, whilst true, is, in my view, no distinction. If the proposition which Mr Goudie seeks to extract from Healey is right, the teacher’s employment is brought to an end without any express notice, be it of retirement, resignation or dismissal, needing to be served. In such a case there is no need for any Court to consider whether there is a contractual or public law duty upon the employer to dismiss and those, the questions dealt with in the Dorling cases, thus never arose in Healey, at all events if Mr Goudie’s version of its ratio is correct.

It is unfortunate that the applicability of the decision in Healey is a matter of doubt but I am unconvinced by Mr Cavanagh’s attempt to distinguish it and I accept the proposition which Mr Goudie seeks to extract from it. Further, I think it right to attach some weight to the fact that an applicant for IHRB does so on the basis, made plain to the employer when the form is sent on to him, that she has been told that she should arrange for the employment to be terminated at the earliest possible retirement date. She, in effect, represents to the employer that if IHRB is granted it will be on that basis and when she accepts IHRB from T.P. she does so on that basis. The employer will, it seems, usually or even always be told, when he is informed that an IHRB application has been granted, that he, too, should arrange for the termination of employment but, in contrast to the employee’s position, he will not have been told previously that he should arrange a termination and he will have done nothing to suggest that he accepts that he should. The primary obligation to make arrangements for an early termination seems to me thus to be on the employee. It is, of course, within the employee’s power to do so – Section 3 clause 2.1 of the Burgundy Book – even should the employer not cooperate. Absent other and consensual arrangements, retirement from the employment under Healey will occur on the acceptance of retirement benefits. They are, after all, retirement benefits which the applicant sought and received and, as Healey illustrates, one cannot simultaneously be wholly retired from and yet be still in one and the same employment.

If I am right in that view then Healey is decisive of the cases before me. On that view, then, on the facts, each of the Teachers has already resigned and thus there is no need for the employer to serve a notice of dismissal and such a notice would be redundant if it was served. However, lest, on a fuller examination of the papers in Healey, it can be seen that Healey is distinguishable in the way in which Mr Cavanagh seeks to distinguish it, and out of respect to the very much greater citation of authority and argument that I have received than was received by the Court of Appeal in Healey, I shall deal with the other arguments raised before me.

Mr Goudie here relies on two cases, the first of which is Tarnesby –v- Kensington and Chelsea Health Authority (Teaching) [1981] ICR 615 H.L.. Dr Tarnesby’s name was for a time suspended from the Medical Register after the appropriate Medical Authority had found him guilty of infamous conduct in a professional respect. The Hospital Board, his employer, informed him that in view of his suspension his contract of employment had ended. He sued for a declaration that his employment continued. He was unsuccessful at first instance and in the Court of Appeal. The House of Lords dismissed his appeal. The relevant statute provided that “no person, not being fully registered, shall hold any appointment as …. Medical Officer ….. in any hospital”. Lord Russell of Killowen, with whose speech Lord Fraser and Lord Lowry agreed, at page 618 c-d, speaking of erasure of the doctor’s name from the Register said:-

At page 618 g he added that the suspension from registration equally had the effect of terminating by law the appointment and the contract of employment “which is the appointment” – his emphasis. Lord Bridge, with whom Lords Wilberforce, Fraser and Lowry agreed, at page 620 e-f resisted any distinction being drawn between holding an appointment as a hospital Medical Officer and being employed as such, adding:-

Mr Goudie argues that Reg 7 has a like effect to the provision (“no person not being fully registered shall hold any appointment”) that was in issue in Tarnesby and that Reg 7 thus causes an automatic termination of employment. Mr Cavanagh seeks to distinguish Tarnesby in that in Tarnesby there had been gross professional misconduct and thus an independent ground for dismissal; by contrast there was no fault in the Teachers, merely an unfortunate lapse into incapacity. However, the House of Lords did not rely on fault but on the fact of suspension of registration in coming to their conclusion. Nor do I attach weight, as Mr Cavanagh would, to the existence of Reg 7 (2) as enabling a distinction to be drawn.

I accept, though, that a question as to whether a teacher “does not have the health and mental and physical capacity for [his] employment” as a teacher at any particular time is a question to which the answer at that time might be unclear and as to which his employer, the teacher himself and T.P., if involved at all, might hold differing views. There would thus be periods during which it was unclear whether the relevant employment should continue. For teachers there is no clear-cut test, such as in Tarnesby, where the question was whether or not the doctor’s name was for the time being on the Register. It is easy enough to see such a clear-cut condition as being applicable in judging the subsistence or not of continuing employment. Whilst it may be argued, once a teacher has applied for, has been accepted for and has received the fruits of IHRB, that incapacity within Reg 7 would have become undeniable by the teacher and that the teacher would thereafter be in no position to deny that the relative employment should not continue, even there doubt would remain as to from what date the want of capacity had occurred and, in turn, as from what date the relevant employment should not have been continued.

The possibility of uncertainty as to the existence or not of incapacity within Reg 7 (1) suggest to me that the Regulation is not intended to operate in such a way that once a want of capacity within its terms is asserted or accepted by one or other only of the employee and employer the relevant employment is immediately terminated by the Regulation. That could, of course, clash with the contractual sick pay provisions and it is perhaps notable also that Reg 7 makes no provision for the mechanics of decision-making as to incapacity where it has not appeared to the employer that the teacher may no longer have the appropriate capacity nor where the employer takes a different view on the subject to whatever view is taken by T.P. or by the teacher. Indeed, short of the express provision in Reg 7 (2) (c) dealing with a case where the teacher fails to submit himself for examination or to make medical evidence available, Reg 7 makes no provision for a decision by the employer as to the existence or not of incapacity at all. Nor does Reg 7 provide for the giving of any notice of dismissal. I cannot think that if Reg 7 was intended to pinpoint the moment at which employment should end by reason of incapacity it would have been left so incomplete.

It does not follow, though, from the fact that Reg 7 does not pinpoint a date beyond which employment should not have continued and therefore a date as at which employment ended that there cannot be circumstances in which its application has become incontestably clear. Where a teacher has of his or her own volition applied for IHRB, has had the application accepted by T.P., where the employer has been told of that, where IHRB has actually been paid and where, in the course of the process, no attempt has been made by the employer to deny the existence of incapacity, in such circumstances it seems to me irresistible that the teacher does not have capacity as required by Reg 7 and that no relevant person is in a position to assert that he does or might have such capacity. When such a situation occurs, whilst no precise earlier date for the termination of employment thereby emerges, the fact that the employment has ceased by reason of Reg 7 not later than upon receipt of IHRB by the employee and has ceased without any notice of dismissal under Clause 6.1 is, in my judgment, then clear. As it was put in Reilly –v- The King [1934] AC 176 at 180 JCPC in the judgment delivered by Lord Atkin, it is an “elementary proposition that if further performance of a contract becomes impossible by legislation having that effect the contract is discharged”.

I thus, albeit by a different route, arrive at the same conclusion as to this operation of law argument as I had under the Healey argument, but, this time, of course, without being troubled by whatever doubts are open as to the facts in Healey.

In the third of his arguments Mr Goudie argues that, irrespective of the decision under other heads of argument, the Teachers’ contracts of employment were ended by the contractual doctrine of frustration not later than upon the employee’s acceptance of IHRB. That the doctrine of frustration can apply to contracts of employment is indisputable – see e.g. Marshall –v- Harland & Wolff Ltd [1972] ICR 101 NIRC. Mr Goudie draws attention to Watts –v- Monmouthshire County Council and Another [1968] 66 LGR 171. In Watts the Plaintiff Teacher had had a number of accidents at his school and had applied for and was granted a short service gratuity from the Ministry of Education on the basis that he was permanently incapable of serving efficiently as a teacher of the appropriate kind. The employer did not give him any notice of dismissal. The headnote says “Under the relevant regulations” (which unfortunately it has not been possible for Counsel to identify) “he was entitled to three months’ notice of dismissal”. The teacher sued for damages, including damages in that he had not been given pay for the period of notice that would have been applicable had notice of dismissal been given. The Department of Education had told him it was satisfied as to his incapacity.

At page 181 Browne J. said:-

The teacher in Watts appealed to the Court of Appeal, where he appeared in person. In a brief judgment, Sellers L.J., with whom Danckwerts and Sachs L.J. agreed, said:-

Although Browne J. twice uses the word “frustration” I do wonder whether he was using it to refer to the technical doctrine of that name. His reasoning does seem more to follow the lines of and to support the Healey approach with which I have already dealt. Nor is there any hint in his judgment (nor in that of the Court of Appeal) that any cases or textbooks on the doctrine of frustration properly-so-called were cited to him or to the Court of Appeal. As to that doctrine, Mr Cavanagh has taken me to Chitty on Contracts, 28^th Edition paragraphs 24 – 004 and 24 – 056. They suggest that where express provision has been made in the relevant contract itself for the event allegedly causing the frustration then the contract is not frustrated. That may be to overstate the passage in Joseph Constantine Steamship Line Ltd –v- Imperial Smelting Corporation Ltd [1942] AC 154 at 163 which is the authority Chitty chiefly relies on. Viscount Simon L.C. said only, at page 163, that there can be no discharge by supervening impossibility if the express terms of the contract bind the parties to performance notwithstanding that the supervening event may occur. It is hard to regard Clause 6.1 as binding the parties to performance after accepted incapacity has supervened and the teacher has retired on IHRB. During such a period the employer does not and cannot require the teacher to teach and does not pay the teacher and the teacher does not and cannot attempt to teach. However, Clause 6.1 does seem to contemplate that, absent a notice of termination being served by the employer, so far as contract is concerned the teacher will continue to be employed notwithstanding that he or she is suffering a permanent incapacity. I thus accept Mr Cavanagh’s argument that it cannot be that permanent incapacity alone works a frustration of the teacher’s employment.

Mr Goudie counters that by saying it is not incapacity alone which he relies upon as working the frustration but the retirement on the grounds of incapacity by the teacher on the teacher’s own application and his or her acceptance of IHRB. I have not found the question easy. It is not made easier by Mr Cavanagh’s citation of National Carriers -v- Panalpina Ltd [1981] AC 675 H.L. where, at page 701 c and d, Lord Simon of Glaisdale refers to the doctrine of frustration as having been developed as an expedient to escape from injustice and as to its being a modern and flexible doctrine not constricted by any arbitrary formula. Whilst in the ordinary way it would be unjust for an employer to deprive his employees of notice pay, Clause 6.1 does clearly provide that there is to be none unless a dismissal notice is served and in any event injustice is no clear touchstone where, on the one hand, the employee has not attended for work for a substantial period and has exhausted his stipulated sick pay entitlements but, on the other hand, is enabled to receive nonetheless the deferred salary, so to speak, of a lump sum and a pension as IHRB. In Panalpina Lord Simon of Glaisdale says at page 700 that:-

If I am wrong as to the contract of employment having come to an end without notice being served under the arguments I have labelled as Healey and operation of law, then it seems to me that upon an unequivocal retirement for permanent incapacity of the kind with which I am dealing but in the absence of any notice of dismissal the contract of employment can and does continue but in an entirely shadowy form in which, by reason of the employee’s incapacity and retirement, the employer cannot require any performance and the employee cannot offer it. It is, of course, the Teachers’ case that at present their contracts do still subsist. On the assumption that I am wrong on the other two headings and even if the concept of injustice brings in the other features I shall refer to below, I see no injustice (to use Lord Simon of Glaisdale’s phrase) in holding both sides to the literal sense of their respective stipulations in the new circumstances given that the stipulations, in such circumstances, require nothing from either side. Whilst, as I have already indicated, I can, with respect, see considerable force in the use of the word “frustration” in the loose sense in which I take Browne J. to have used it in Watts supra, I do not hold that the Teachers’ contracts were frustrated under the contractual doctrine of frustration properly-so-called.

Thus, for the reasons I have given, in my judgment in the cases I am dealing with the relevant employment has come to an end without any need for a notice of dismissal from the employer. Clause 6.1 thus does not come into play. But let it be assumed, contrary to that view, that the employment is not brought to an end even by the stage at which the Teacher accepts the IHRB he or she had applied for. A question then arises: what public purpose would be served by there being a public law duty on the employer to dismiss in such cases? There is no such injustice in an employee being denied notice-pay on retirement for permanent incapacity, where that very incapacity and retirement has entitled him or her to a lump sum, a pension or both, as is so manifest that Parliament would obviously have intervened to avoid that being the case.

Mr Cavanagh includes within the injustice which an incapacitated and retired teacher suffers if he is not given notice under Clause 6.1 that the teacher would thereby be denied the enhancement to his pension rights which, in a number of ways, would or might have occurred with respect to the notice period and payment during it and that the teacher, not being dismissed, is stripped of the protection given by the Employment Rights Act 1996 and the Disability Discrimination Act to those who are dismissed.

As for the DDA, it by no means follows, of a person who is permanently incapacitated for the purposes of the provisions which I have cited relating to teachers, that he or she is also disabled within the very different tests for disability under the DDA. Further, discrimination under that Act does not require a dismissal to trigger it; section 4 (2) (d) speaks of subjecting the disabled person “to any other discrimination”. However, whilst, more generally, I see the force of Mr Cavanagh’s point, the dismissals contemplated in the ERA and DDA are involuntary ones or (as for constructive dismissal) as if involuntary ones so far as the employee is concerned. It is to be remembered that it is the Teacher here who has chosen to retire. It is not that a protection is stripped from the Teachers but that they never had become entitled to it. Moreover, as Mr Goudie puts it, there is, to revert to injustice, no obvious injustice in a person not being paid twice over (notice-pay and pension) in respect of the very same period.

In all the circumstances I cannot take it that the purpose of Reg 7 was to avoid the suggested injustice to employees. There is, of course, a public interest in teachers being fairly remunerated but there is no hint that Reg 7 was formed with Clause 6.1 or its predecessors in mind. Further, had there been intended to be a public law duty to dismiss conferred by Reg 7, it would have been reasonable to expect the legislature to specify far more explicitly than emerges from Reg 7 when the duty would arise, by whom and how it was to be exercisable and what challenges could be made to its exercise. One may contrast the details specified in the 2000 Regulations 7 and 8 with respect to the discretion in the Secretary of State (not himself the employer) to direct a termination of employment – 2000 Regulation 5 (2). Would the duty be capable of being invoked by members of the public having a special interest in there not being at a particular school a teacher who did not have the mental or physical capacity to teach? Would the duty be capable of being invoked, for example, by fellow teachers or by the governors of a school but who were not the employers of the teacher concerned, or by parents of children already at or who were soon to be at the school? Moreover, if a public law duty were intended to have been created by Reg 7 it would need to have been considered by the legislature, where it was the employee who was asserting the relevant incapacity, whether the non-contractual duty should fall on the employee or at least, in such a case, on both the employer and the employee. The fact that Reg 7 (2) deals with cases where it appears to the employer that there is a want of capacity does not preclude the (assumed) duty being conferred also or instead on the employee as the other person who is able to ensure that “relevant employment shall not continue” and 7 (2) (c) includes no obligation to reach a conclusion. And whether the duty was to be on employer, employee or on both, its want of detail is surely remarkable. It is notable, for example, that Reg 7 does not require the incapacity to be likely to be permanent or of any lesser future duration beyond its present existence, nor does it need to have subsisted for any period before Reg 7 can be acted upon.

In these circumstances I am unable to hold that Reg 7 creates a public law duty falling only upon the employer. Further, if it creates a duty falling upon both the employer and the employee, for reasons I have already given I would regard the primary duty as falling, on the facts before me, on the Teachers.

If Reg 7’s drafting suggests that it was not intended to create a public law duty to dismiss once the incapacity which it describes is present then for the same reasons, though perhaps without quite the same force, it does not have the specificity either that one should reasonably expect of a power to dismiss in such circumstances. I do not, though, need to consider whether Reg 7 creates merely a power to dismiss as that does not assist the Teachers because the Employers would be able to counter that a power to dismiss conferred a discretion (here unfettered) not to do so, which would leave the Teachers without the notice to dismiss which they crave. If Reg 7 creates no public law duty at all or no duty principally to be performed by the employer, (and, a fortiori, if it creates no power either) that raises the question of what is it that Reg 7 is intended to do so in the circumstances which I am dealing with?

I cannot pretend that the legislative intent underlying Reg 7 and the mechanisms to be deployed in its operation are in all respects as discernible as one would prefer to find. It may create a power. It may, where the relevant incapacity (which does not have to be permanent nor associated with retirement) is agreed or is incontestable at the suit of the person against whom Reg 7 is to be used, have the function of bringing about a termination of employment by operation of law of the Tarnesby kind, as I have earlier described.

There is thus, as I see it, a fourfold combination against my arriving at the conclusion which the Teachers seek. Firstly, it is hard to see a public purpose underlying a need for Reg 7 to impose a duty on the employer to dismiss in cases of an employee’s application for and acceptance of IHRB; secondly, Reg 7 is not framed as one might expect of such a public law duty; thirdly, even if Reg 7 creates a non-contractual duty it is not clearly one as to which, on the facts, it falls only to the employers rather than to the Teachers to perform and, fourthly, that to deny Reg 7 a rôle as creating a public law duty on the employers to dismiss does not leave it bereft of any purpose. That being so, I would have been unable to hold that Reg 7 here creates a public law duty on employers to dismiss even had the relevant employment not been otherwise terminated.

Mr Cavanagh, in the course of his attractive argument, argues that if Reg 7 has the effect that the employers would ascribe to it then Clause 6.1 becomes otiose. Clause 6.1 deals with the case where the employer is asserting the permanent incapacity or other relevant reason relating to sickness absence; it contemplates that the employer may give notice of dismissal on such a ground. It thus covers cases in which, before such a notice is given and whilst that has become the employer’s intended course, the employee does not accept that he can properly be dismissed. He might not accept, for example, that he is permanently incapacitated and accordingly would not have applied for or accepted IHRB. In such a case the employer, rather than attempting to get the employee to accept the incontestable truth and the extent of his incapacity (as the Employer would have it), so as to enable the employer either to assert termination by operation of law or even that Reg 7 required the employee to bring the employment to an end, may instead serve notice under Clause 6.1 and pay remuneration for the notice period. The employer will be vulnerable if it transpires that the ground asserted in the notice could not reasonably have been thought to exist but Clause 6.1 will nonetheless have pointed to a course of action for the employer to take.

I thus do not accept that if the employers’ arguments are right Clause 6.1 is made otiose but I do accept that on Mr Goudie’s reading of Reg 7 the full salary for the notice period as provided for under Clause 6.1 will seldom become payable where there is no contest as to the incapacity. In such a case, if I am right, there would be no obligation on employers to serve a notice under Clause 6.1 and, employers, finding it expensive to do so, would be likely not to serve notice save perhaps where gratuitous assistance to the incapacitated teacher could be justified. It is not, though, unknown for situations provided for in contractual terms not, or only seldom, to occur and in any event it is not necessary to construe the creature of Parliament, Reg 7, in the light of the creature of the contracting parties, Clause 6.1.

Lest the case goes further I mention one more argument that suggests that the relevant employment may come to an end without any need, by way of a public law duty, for the service of a notice of dismissal. As an argument it is that very frailest of forensic creations, an argument sired by the Judge but embraced without any parental enthusiasm by the party who could have been expected to adopt it. I have not relied, nor have I needed to rely, on it in coming to my decision but mention it in case it is later taken into intensive care and survives.

It is this. What Reg 7 expressly requires not to continue is not employment but “relevant employment”, namely employment “as a teacher”. Where an erstwhile teacher has exhausted his or her sick pay, has not returned to work, is undeniably incapacitated, has applied for and has accepted IHRB on the ground of permanent incapacity and has therefore retired, then, assuming, against the Employers’ arguments, that employment continues absent a notice of dismissal, it could only do so in some shadowy sense. The employee in such a case could not, by reason of permanent incapacity, serve as a teacher and Reg 7 would preclude the employer from requiring him to do so. Could one describe employment in that shadowy sense as employment “as a teacher”? If the continuing employment is not as a teacher then there cannot be a public duty to terminate it under Reg 7 as the regulation is aimed only at employment “as a teacher”. The employment would continue in its shadowy form and, even leaving aside the way that Reg 7 is aimed, it would be difficult to postulate any need for a public law duty to terminate anything quite so harmless to the public as the continuation of that shadowy form in which the employer does not require any attendance or service from the employee in the only rôle for which the employee was employed, in which the employee does not attempt to attend or serve in that rôle and in which he is in any event permanently incapable of serving.

Mr Cavanagh’s argument against this is that the character of the employment is fixed for all material purposes at its outset; the Teachers were employed as teachers and that suffices. Whilst I accept that such an answer would usually suffice it does lead to the conclusion that the Court is required to view as employed as a teacher a person who does not teach, who is not paid to teach, who is not asked to teach, who is permanently incapable of teaching and who on his or her own application has retired from teaching. As I have mentioned, I do not need to and do not rule on whether Mr Cavanagh’s answer suffices but, given the unconvincing nature of the conclusion to which it leads, the matter is not, as it seems to me, wholly free of possible contrary argument.

Had I held there to be the public law duty for which the Teachers argue, I would have held that a teacher concerned would be in a position to seek to enforce it by way of application for Judicial Review. An individual teacher concerned would in such a case be affected by the performance or non-performance of that (supposed) duty to an extent quite beyond that affecting the public generally. However, for the reasons I have given, the employers are not, in my judgment, under, nor have they been under, an obligation of public law to serve notices of dismissal on the Teachers and accordingly I do not feel able to make the mandatory orders or declarations which the Teachers seek. In only one case, that of Mrs Verner, has permission to apply for Judicial Review previously been granted. In Mrs Verner’s case I dismiss her application. In the cases of Mrs Sheppard and Mrs Ridley I first grant leave for each to apply for Judicial Review but then dismiss their respective claims.

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