Fleur De Lys Automobile Manufacturing Ltd v Terry [1993] UKEAT 782_92_0505

EAT
Fleur De Lys Automobile Manufacturing Ltd v Terry
[1993] UKEAT 782_92_0505 · 1993-05-05

JUDGE HAGUE QC:

Near the end of February 1992, Mr Terry was dismissed by his employers, Fleur De Lys Automobile Manufacturing Ltd ("the Company"). He was born on 11th February 1924 and so was then 68 years of age. He made a claim against the Company for unfair dismissal. In its Notice of Appearance, the Company took the point that Mr Terry was barred from making a claim by S.64(1)(b) of the Employment Protection (Consolidation) Act 1978 because he was over the age of 65. That point came before the Industrial Tribunal, which by its decision entered in the register on 30 September 1992, determined that Mr Terry was not barred and that the Tribunal therefore had jurisdiction to hear his claim. The Tribunal reached that decision on the basis that the "normal retiring age" applicable to Mr Terry was the age of 70. The Company appeals against that decision, contending that on the facts there was no such normal retiring age.The material parts of S.64(1)(b) read as follows:
"....... Section 54 does not apply to the dismissal of an employee from any employment if the employee -
............(b) attained the following age on or before the effective date of termination, that is to say - (i) if in the undertaking in which he was employed there was a normal retiring age for an employee holding the position which he held and the age was the same whether the employee holding that position was a man or a woman, that normal retiring age; and(ii) in any other case, the age of sixty-five.The word "position" is defined by S.153(1) of the 1978 Act as follows:
"Position in relation to an employee means the following matters taken as a whole, that is to say, his status as an employee, the nature of his work and his terms and conditions of employment."
The expression "normal retiring age" is not defined by the 1978 Act. It has however been the subject of considerable judicial attention at the highest levels. As Wood J pointed out in Barclays Bank PLC -v- O'Brien [1993] ICR 347 at p.350 it is "a creature of statute" and "is not the contractual date [age] of retirement" . In his dissenting judgment in the Court of Appeal in Hughes -v- Department of Health and Social Security [1984] ICR 557 at p.581, Sir John Donaldson MR said this:
"A 'normal retiring age' is something of an abstraction. It is an aspect of an employer's employment policy. If there is a normal retiring age or ages in an organisation, the statutory policy is that those who are retired in accordance with that policy are not allowed to complain of having been unfairly dismissed. Of course an employer may not have formulated such a policy in expressed terms, but it may nevertheless be apparent that he has one from the way in which he acts, taking account of deviations for compassionate or other special reasons. Alternatively he may have formulated and promulgated such a policy, but it is clear either that this is a sham or that he has abandoned it. In such a case the statutory age will apply, as it will if there is admittedly no normal retiring age. But that is not this case."
Sir John Donaldson MR's dissenting judgment was expressly approved by the House of Lords which reversed the decision of the majority of the Court of Appeal: see [1985] ICR 419 per Lord Diplock at p.431B. In Barber -v- Thames Television Plc [1992] ICR 661 at p.666, Dillon LJ in the leading judgment said this:
"In the jurisprudence which has developed under section 64, the persons who hold the same 'position' as defined in section 153(1) as a particular employee have been referred to as "the group" to which that particular employee belongs. The word 'group' is not to be found in the Act itself. It was introduced by Lord Fraser of Tullybelton in Waite v. Government Communications Headquarters [1983] I.C.R. 653. A summary, therefore, of the effect of section 64(1)(b) is that a person whose employment is terminated because he has reached the normal retirement age of his group cannot complain of unfair dismissal. There is no jurisdiction to entertain his complaint because the opening words of section 64(1)(b) provide that section 54 does not apply to the dismissal of such an employee from his employment. But if there is no normal retirement age of his group, then he or she can claim for unfair dismissal if his employment is terminated by compulsory retirement under the age of 65, since 65 is the residual age referred to in section 64(1)(b)(ii)."
Mr Terry was recruited by the Company in 1983 as the chief designer of replica vintage cars. He appeared in person before us and told us that he previously had an international reputation as a car designer, and had been recruited effectively to set up the Company's business. Initially he was the only employee. He had been a director of the Company, but had resigned his directorship when he was aged 65. But he did not wish to retire, and wanted to go on working for as long as he could. He regarded his work as his hobby. His original service contract was replaced by another one in July 1989. Both his contracts were renewable by notice on either side and neither contained any provision for retirement. Mr Terry himself stressed that his position was unique, and quite different from that of the employees of the large companies referred to in the decided cases. He was not part of any "group" of employees.In October, 1989 and November 1990, some correspondence took place between the Company (through Mr Muir or Mr Liveras) and Mr Terry. The Tribunal found that this correspondence "constitutes a statement of a term of the applicant's employment, namely that hisnormal retirement age was fixed at the earliest at his 70th birthday." We consider below whether this correspondence can be so interpreted, but will for the moment assume that it gave rise to an agreement between the Company and Mr Terry that Mr Terry's retirement age would be at not less than 70.Mr Clark on behalf of the Company submitted that on the above authorities, it was clear that there could be no such thing as a contractual normal retiring age, and that the Tribunal had confused a contractual retiring age with a normal retiring age. He argued that there was nobody in the same "position" as Mr Terry, so that section 64(1)(b)(i) could have no application and the only relevant age was therefore 65 under section 64(1)(b)(ii).In support of his argument, Mr Clark referred us also to Age Concern Scotland -v- Hines [1983] IRLR 477. In that case, the contractual retiring age for women was 60. Miss Hines was told that in principle she could stay until 65. She was dismissed at the age of 61, and made a complaint of unfair dismissal. The Appeal Tribunal, reversing the decision of the Industrial Tribunal, held that there was no jurisdiction to hear her complaint. In the course of the judgment Lord McDonald said at p.479:
"It was argued, however, that by the exchange of letters referred to the appellants entered into a binding engagement with her to employ her until she was 65. It may be that they did and that by dismissing her they were in breach of that contract. On that matter we express no opinion. That however is not the test under s.64(1)(b). It is not the situation of the individual employee that falls to be considered under that section. It is the situation of an employee held, i.e. of a member of the class to which he belonged. This appears from the definition of the word "position" in s.153 of the 1978 Act. The word means, taken as a whole, status as an employee, nature of work and terms and conditions of employment. Thus whatever special contract the appellants may or may not have made with the respondent, the statutory remedy of unfair dismissal will not be available to her unless the normal retiring age for women employees in her position was higher than 60. In our opinion the question which the Industrial Tribunal posed to themselves in this respect was wrong. They asked what was the earliest age at which the appellants could require Miss Hines to retire; they should have asked what was the earliest age at which an employee holding the position which she held could be required to retire."
This passage was cited with approval by Balcombe LJ giving the leading judgment of the Court of Appeal in Brooks -v- British Telecommunications Plc [1992] ICR 414 at p.424.In our judgment, Mr Clark's arguments are clearly correct and in accordance with authority, and we accept them. The Tribunal was referred to the Age Concern case, but distinguished it on the ground that the normal retiring age (for women) had been fixed at 60 in that case, whereas in the present case "the arrangements were retirement at 70 or later" . That suggested ground again confuses the contractual retirement age with the normal retiring age, and no such distinction can be made. We agree with Mr Clark that the Age Concern case is indistinguishable from, and effectively decisive of, the present case.Mr Clark (as we understood him) went as far as to say that section 64(1)(b)(i) could never apply unless there were other persons for the time being in the same group, so that there could be no "normal retiring age" for the sole holder of an office. He referred to a passage in the Age Concern case at p.479 para 12 in support of that. We express no opinion on this wide proposition, for it seems to us at any rate arguable that the circumstances may establish a "normal retiring age" for holders of that office for the time being, for example the managing director of a company, the general secretary of a union, or the headmaster of a school. However, on the facts of this case, and by reason of the uniqueness of his position, that could not help Mr Terry.The foregoing is sufficient to dispose of this case in favour of the Company, but we consider there is a further point on which the Tribunal fell into error. The correspondence on which the Tribunal relied was almost entirely concerned with a new sports car project and Mr Terry's remuneration from it. Mr Muir's letter of 3 October 1989 offered Mr Terry 1 / 4 % of the net sales value of each car, for a minimum 5 year period even if he died or retired or left the company; this represented a variation of the terms of Mr Terry's service contract. Mr Muir did however add near the end of his letter:
"I do not know what plans, if any, you have for retirement, but we would happily review arrangements with you on your 70th birthday. However, this is perhaps a matter we can discuss together when we next meet."
Mr Terry's reply, dated 8 October 1989, to that letter deals almost exclusively with the sports car project and his remuneration. Mr Terry's only comment about retirement was:
"Finally and on a lighter note, I should tell you that I retired from "work" over 30 years ago. I now indulge my hobby and am paid to do so! Here's hoping that situation continues for many years to come. That's my intention anyway."
By a letter dated 30 November 1990, Mr Liveras wrote to Mr Terry:"As per our recent conversation regarding the sports car project, I would like to confirm the arrangements as set out in Mr Muir's letter to you dated 3 October 1989. This supersedes other arrangements in your Particulars of Employment dated 1st July, 1983." [later amended to 1st June 1989]Mr Terry replied by a letter dated 2 December 1990 which commenced:
"Many thanks for your letter dated 30 Nov 90 confirming the financial arrangements concerning the 1-FDL sportscar project as laid down in Mr. Muir's letter to me in October 1989."
In our judgment, it is clear from these letters that the only variations to Mr Terry's service contract were in respect of the sports car project and his remuneration from it. We find it impossible to spell out from them any further agreement as to a retirement age. The factual foundation for the Tribunal's decision therefore does not exist.For these reasons, we allow the appeal. As a result of section 64(1)(b) of the 1978 Act, Mr Terry was barred by reason of his age from bringing a claim for unfair dismissal, and his claim must accordingly be dismissed.