Secretary Of State For Education & Science v Birchall [1994] UKEAT 523_93_1503

EAT
Secretary Of State For Education & Science v Birchall
[1994] UKEAT 523_93_1503 · 1994-03-15
MR JUSTICE MUMMERY (PRESIDENT) Introduction This appeal is concerned with the "normal retiring age" of an employee within the meaning of S.64(1)(b) of the Employment Protection (Consolidation) Act 1978 ("the 1978 Act"). Mr Roger Birchall was employed as a teacher at the European School in Brussels from September 1981 until September 1985 when he was transferred to the European School at Culham near Abingdon. He reached the age of 60 on 26th September 1990. His fixed term contract of employment expired on 31st August 1991, that is the end of the academic year in which he attained the age of 60. He was not offered further employment. The consequence is that, as he was employed under a contract for a fixed term and that term expired without being renewed under the same contract, he is to be treated as dismissed by his employer within the meaning of S.55(2)(b) of the 1978 Act.Section 64 of the 1978 Act, as amended by S.3 of the Sex Discrimination Act 1986, provides that -
"(1) Section 54 does not apply to the dismissal of an employee from any employment if the employee - (a) ... (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 woman, that normal retiring age; and

(ii) in any other case, the age of 65."

In the interpretation section 153(1) "position"

"... in relating 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 principal issue between the parties is whether Mr Birchall falls within sub-paragraph (i) or (ii) above.Mr Birchall's case is that he falls within sub-paragraph (ii) and that, until the age of 65, he has a right under S.54 of the 1978 Act not to be unfairly dismissed by his employer. He denies that, in the undertaking in which he was employed, there was a normal retiring age for an employee holding the position which he held. Mr Burchall succeeded before the Industrial Tribunal held at Reading on 5th and 6th April 1993. For the reasons notified to the parties on 17th May 1993, the Industrial Tribunal held, on a preliminary point, that there was no normal retiring age and that Mr Birchall's retiring age was therefore 65.That is disputed by the Secretary of State for Education and Science, the first Respondent in the proceedings, who contends that there was a normal retiring age applicable to Mr Birchall and it was 60. The Secretary of State therefore appeals against the decision of the Industrial Tribunal. The second Respondents to the proceedings are the Board of Governors of the European School, who took no part in the hearing of the preliminary point by the Industrial Tribunal or in this appeal.

The Proceedings

In order to understand the decision of the Industrial Tribunal and the conflicting submissions on this appeal, it is necessary to trace the course of the proceedings and to identify the issues raised in them.In his Notice of Application presented to the Tribunal on 29th November 1991 Mr Birchall complained of the following matters under the headings, "Racial discrimination contrary to the 1976 Race Relations Act/Unfair Dismissal".(1) Enforced retirement at the insistence of the Department of Education and Science at the age of 60 on the basis that he was a British national. Teachers of other national states at the European School continue in service beyond the age of 60, if they so wish.(2) There was no normal retiring age of 60 in the European School nor any rule preventing employment in the school after the age of 60.(3) Treatment as a civil servant for the purposes of retirement, whereas teachers in the employment of a Local Education Authority are not required to retire at the age of 60.(4) Though he was treated as a civil servant, he was denied an appeal to the Civil Service Board.(5) Detriment in the form of potential loss of earnings and pensionable years and also the fact that his post-retirement earnings were subject to a pension claw-back at a very low level.In those circumstances Mr Birchall's complaint was that he had been(a) unfairly dismissed;(b) treated less favourably on the grounds of nationality(c) unlawfully discriminated against contrary to UK legislation and to the statute of the European School.His complaint did not, at that time, specifically refer to the EC Treaty or to any Council Directive.In the Notice of Appearance of the Secretary of State dated 31st January 1992, a number of points were taken, including an objection to the jurisdiction of the Tribunal. It was contended that the Industrial Tribunal had no jurisdiction to hear the application by virtue of S.64(1)(b) because Mr Birchall had reached the normal retiring age for an employee holding the position he held, ie the age of 60. It was on the basis of that contention that the Chairman of the Tribunal gave a direction in a letter dated 4th February 1992 that the application should be set down for a two-day hearing of the following preliminary point
"Had the applicant attained before the effective date of termination of his employment the normal retiring age for an employee holding the position he held?"
It will be seen, with the benefit of hindsight, that this was not an appropriate way of resolving the issues in this case. The effect of a preliminary and separate hearing on the question of "normal retiring age" has been to distort the dispute and to confine the Industrial Tribunal too narrowly in its deliberations. In our judgment, the decision of the Industrial Tribunal is flawed by an error of law in the giving of the direction for the determination of a preliminary point with the effect of isolating one issue from other issues in the case which are, or at the very least, may be also relevant to the question of normal retiring age within the meaning of S.64(1)(b). Those provisions raise a number of inter-related questions.(1) What was "the undertaking" in which Mr Birchall was employed?(2) By whom was Mr Birchall employed in that undertaking?(3) What "position" did Mr Birchall hold in the undertaking?(4) Was there a "normal retiring age" for an employee holding that position?(5) If so, what was that normal retiring age?The difficulties encountered by the Industrial Tribunal in deciding the preliminary point become clear when, on examining the decision, it appears that the Tribunal made findings of fact and came to conclusions on some of these questions but not did not make clear findings of fact or reach clear conclusions on others.

The Legal Principles

Before we examine the decision of the Industrial Tribunal in the light of the rival submissions, it may be helpful to summarise the legal principles on the construction of the expression "normal retiring age" in S.64(1)(b), as laid down in three decisions:

Duke v. Reliance Systems [1982] ICR 449

Waite v. Government Communications Headquarters [1983] ICR 653

Brooks & Ors v. British Telecommunications plc [1992] IRLR 66 .These principles should be applied in the resolution of this dispute.(1) "Normal retiring age" is the age at which employees in the relevant group reasonably expect or understand they are expected to retire.(2) If there is an express or implied term in the contract of employment specifying a retiring age, that will prima facie be the normal retiring age, but it does not conclusively fix that age. Evidence may be adduced to demonstrate that the retiring age specified in the contract has been departed from or abandoned in practice in favour of a different age or of a variety of ages. The result may be that the normal retiring age is different from that specified in the contract or that there is no normal retiring age, so that the statutory alternative of 65 will apply in accordance with S.64(1)(b)(ii).(3) Normal retiring age may feature as an aspect of an employer's employment policy. If it does, evidence relevant to normal retiring age may be found in the general policy of the employer. That may change from time-to-time. So long as there is no breach of a contractual retiring age, the policy of the employer may change with immediate effect, as communicated by him to the group of employees affected by the policy change. If the change of policy takes effect on communication, the previous expectation of the members of the group of being retained in employment until a higher age is altered, unless it shown that the employer did not in fact have a genuine intention to implement the change in policy.

The Decision of the Industrial Tribunal

In reaching its decision in favour of Mr Birchall, the Industrial Tribunal made findings of fact. Those findings were, however, on the basis of an assumption made by the Tribunal for the purposes of determination of the preliminary point. The assumption stated in paragraph 14 of the Decision was that Mr Birchall's position was that of a schoolmaster "in the employment of the Department of Education and Science ... for the purpose of working in the European School whether in the United Kingdom or elsewhere in Europe."In the context of that assumption the Tribunal came to the following conclusions -(1) The "undertaking" in which Mr Birchall was employed was the Department itself "as a whole", not the European Schools as "an undertaking on their own".(2) Mr Birchall's contract contained no provision relating to his normal retiring age.(3) The Department of Education and Science failed to establish as a fact, by reference to its statements on policy, that the normal retiring age for someone in Mr Birchall's position was 60. The circumstances relating to his employment were clearly and materially different from that of other persons employed as civil servants, and not as teachers.(4) The Department attempted unilaterally to introduce a term relating to normal retiring age into Mr Birchall's contract of employment, but he did not agree to or acquiesce in such a change and his contract was not varied.

Submissions of the Secretary of State

In support of the appeal the following submissions were made on behalf of the Secretary of State to the effect that the Tribunal misunderstood the correct legal test for identifying the "normal retiring age" in S.64(1)(b).(1) The correct legal test was that laid down by the Court of Appeal in Brooks v. British Telecommunications Plc (supra) at p.70, a case cited to the Tribunal but not mentioned in their decision.
"What, at the effective date of termination of the applicant's employment, and on the basis of the facts then known, was the age at which employees of all age groups in the applicant's position could reasonably regard as the normal age of retirement applicable to the group?"
(2) Instead of applying that test, the Tribunal erroneously considered that it was necessary for the employer to demonstrate that the normal retiring age was either an express or implied term of the employee's contract or that there was in fact a practice retiring employees at the age of 60. The Secretary of State had failed to demonstrate either.(3) The correct legal position is that it may be sufficient for the employer to have a policy which contains a normal retiring age and to have communicated it to the employees. If he has, then that policy can take immediate effect, even though it has not been agreed to by the employees or effectively introduced as a contractual term in individual contracts of employment. Normal retiring age in a statutory concept, not a contractual concept.(4) The Secretary of State had a policy of a normal retiring age of 60 applicable to a person in Mr Birchall's position. That policy was set out in a letter sent to Mr Birchall dated 16th June 1989 when he was offered a further two years of employment with effect from 1st September 1989. The letter set out the terms of the Secretary of State's policy for European School teachers. The normal retiring date was the end of the academic year in which the teacher's 60th birthday was reached. There was nothing, either in contract or otherwise, to prevent the Secretary of State from imposing such a policy in order to establish 60 as the normal retiring age.(5) The Secretary of State objected to alternative arguments raised on this appeal by Mr Birchall on Community Law. The arguments, which we shall refer to later, were not raised before the Industrial Tribunal on the hearing of the preliminary point. In the submission of the Secretary of State the arguments go more to the merits of the case than to the preliminary point and they are, in any case, bad points on the merits.

Submissions of Mr Birchall

In addition to contending that the Tribunal did not err in law and came to a correct conclusion of fact by applying the proper legal test, the following further submissions were made on behalf of Mr Birchall.(1) His conditions of employment are governed by the statute of the European School and by Articles 5, 7 and 48 of the EC Treaty which are directly effective in this case.(2) The Board of Governors, who include the Department of Education and Science, apply Article 12(3) of the statute to all appointments to the European School from other member states of the Community.(3) Insofar as the Secretary of State purported to introduce or operate a retirement policy which has the effect of diminishing Mr Birchall's rights, that policy is unlawful as being contrary to Article 12(3) of the statute and Articles 5, 7 and 48 of the EC Treaty.(4) Mr Birchall's dismissal at 60 was unlawful as being contrary to the directly effective provisions of Community Law.

Conclusions

As already indicated, this appeal will be allowed on the ground that there was an error of law on the part of the Tribunal in adjudicating on the question of normal retiring age as a preliminary point. The case will be remitted to the same Industrial Tribunal to hear and determine the entire dispute between the parties. There need be no serious delay in doing that as we are informed that a date has already been fixed to hear the complaint of racial discrimination. That opportunity should be taken by the Tribunal to decide the entire dispute.

The reasons for our decision to allow the appeal are as follows:-

(1) The Chairman of the Industrial Tribunal erred in law in directing that the issue of normal retiring age should be dealt with as a preliminary point on jurisdiction. The Secretary of State took a preliminary point on jurisdiction, contending that the Tribunal had no jurisdiction to entertain the claim of unfair dismissal because Mr Birchall "had reached the normal retiring age for an employee holding the position he held". It is often appropriate to hold a preliminary hearing on the question of jurisdiction. It is a point which has to be decided and a decision at a preliminary hearing to the effect that there is no jurisdiction to determine the claim of unfair dismissal will often save time and costs, particularly if it is only necessary to conduct a limited factual enquiry and the hearing of the whole matter would involve calling and cross-examining witnesses of fact.(2) There are, however, dangers in isolating an issue from the main dispute and ordering it to be determined as a preliminary point on the basis of assumed facts. It is often quicker and cheaper to find all the facts first and then to resolve the issues. In our view, the present case is an example of a well intentioned attempt to deal with a preliminary point which has produced a situation in which it is impossible to decide the preliminary point separately from the rest of the case. The reason for this is that the question whether there is a "normal retiring age" is a question of fact which can only be decided by reference to all the circumstances. The main argument advanced by the Secretary of State is that he has a proclaimed policy not to extend fixed term contracts beyond the end of the academic year in which the teacher in question has attained the age of 60. Mr Birchall not only disputes the existence, effect and rationale of the policy relied on: he goes further and also asserts that the implementation of such a policy is unlawful because it is discriminatory on the grounds of nationality or national origin. He asked the Tribunal to compare his treatment with that of "other nationals in the employment of the European School". In his Notice of Application he relied specifically on the Race Relations Act 1976 and on the statute of the European School. The same facts set out in his application may also entitle him to pursue an argument that the implementation of the policy would offend against the provisions of Community Law. If the implementation of the policy would be unlawful, the Secretary of State would not be entitled to rely on that policy, as he seeks to do, for establishing a normal retiring age at the age of 60. The consequence of his being disentitled from relying on such a policy is that there would be no "normal retiring age", in which case S.64(1)(b)(ii) would apply to set the retiring age at 65. This aspect of the dispute has not been argued before the Industrial Tribunal; yet it is clearly relevant to the issue of normal retiring age.We hesitate to express any views on the merits of the rival arguments since, for the reasons stated above, it will be necessary for the Industrial Tribunal to re-examine Mr Birchall's claim afresh and as a whole. We suggest that time may be saved if the parties were able to agree and place before the Tribunal a statement of -(1) those facts which are agreed;

(2) those facts which are in dispute; and

(3) the issues of fact and law for the decision of the Tribunal.In those statements of facts and issues, the matters which should be addressed include the identification of(a) Mr Birchall's employer,(b) the undertaking in which he was employed and(c) the position he held in that undertaking and findings as to the contractual position for normal retiring age of a person in Mr Birchall's position, the policy of the employer in relation to the normal retiring age of such a teacher and the lawfulness of any such policy, under both the domestic law of the UK and the Community.The appeal is allowed and the case remitted to the Industrial Tribunal to determine these issues.