Post Office v Otomewo [1997] UKEAT 137_97_1205

EAT
Post Office v Otomewo
[1997] UKEAT 137_97_1205 · 1997-03-17
MR JUSTICE KEENE : This appeal arises out of the determination by an Industrial Tribunal of a preliminary issue, namely whether the respondent had attained the normal retiring age in the undertaking in which he was employed. The tribunal decided that he had not, because it was not possible to determine a normal retiring age relevant to the respondent, and that therefore he was not prevented from bringing a claim for unfair dismissal by virtue of his age.The preliminary issue arose because of the provisions of the Employment Rights Act 1996 . Under s.94 of the Act, an employee has the right not to be unfairly dismissed by his employer. However, s.109 sets an upper age limit for claims of unfair dismissal. S.109(1) provides:
"(1) Section 94 does not apply to the dismissal of an employee if on or before the effective date of termination he has attained- (a) in a case where- (i) in the undertaking in which the employee was employed there was a normal retiring age for an employee holding the position held by the employee, and
(ii) the age was the same whether the employee holding that position was a man or a woman,

that normal retiring age, and

(b) in any other case, the age of sixty-five."

The respondent's contract of employment with the appellants provided that the normal retirement age was as shown in the superannuation scheme. That in turn stated that the normal retiring age meant the age of sixty, save in certain circumstances irrelevant for present purposes. However, the conditions of employment also provided that:
"... management may allow staff in grades represented by UCW to continue in Post Office employment where all the following conditions are satisfied:
2.1 the employee makes application to remain;2.2 the employee meets acceptable standards of fitness and efficiency and is of good conduct;2.3 the retention would not impede the career progression of younger, qualified staff;2.4 there is continuing need for the post occupied by the employee.All retentions beyond age 60 will be subject to review at regular intervals of 6 months."The contract of employment also provided for employees of the appellants to be reminded before reaching the age of 59 that 60 was the normal retirement age. The contract set out a standard letter for this purpose and a standard form of application for employees to use when they sought to be retained. Those procedures were applied to the respondent and he applied to be retained but was refused on the basis of his record of performance and attendance.The tribunal also found the following facts in paragraph 3 of its decision:
"(e) The contract of employment in this form is applied to all non-managerial uniform grades which include postmen, lift operatives, engineers and cleaners. (f) Mr Otomewo has always worked in the western division office of the London area during which time the number of non-managerial uniform grade employees declined from about 3,000 to about 1,000. (g) Not all employees applied to be retained as they approach the age of 60. Whilst Mr Otomewo worked at the western division office about 60% did. (h) For a long as Mr Otomewo worked at the western division office, none of the employees in the non-managerial uniform grade who worked there was ever refused the ability to remain in employment after 60, when they have applied to do so. Employees have gone on to work to different ages some even beyond 65."
Mr Otomewo argued before the tribunal that although the contractual procedures were used there was a standard custom and practice that the Post Office would retain employees in the group to which he belonged. The appellants submitted that an objective assessment of the question of what was the age which all employees could reasonably regard as their normal retiring age would produce the answer that the normal retiring age was 60. They made the point that because 60 was the normal retirement age in the contract there was therefore a rebuttable presumption that 60 was the normal retirement age. They submitted that the procedure through which employees had to go had not been abandoned nor was there any indication that this aspect of the appellant's employment policy was a sham.The tribunal first identified the undertaking in which Mr Otomewo was employed as being the West London office of the Royal Mail London area. No challenge is mounted to that finding. It then identified which employees in that undertaking held the position which Mr Otomewo held and concluded that those employees who were cleaners held that position, forming part of a non-managerial uniform grade group. Again, that finding is not challenged on this appeal.The tribunal then said this, and because it is submitted that the tribunal went wrong as a matter of law in its approach, we quote in full the remainder of its decision:
"7. ... The Tribunal considered that the question to be asked is what at the effective date of termination of Mr Otomewo's employment and on the basis of the facts then known was the age which employees of all ages in the group to which he belonged could reasonably regard as their normal retiring age. The Tribunal sought to apply an objective test not dependent on what Mr Otomewo or any other individual actually thought was their normal retiring age. The Tribunal did not seek to determine the normal retirement age purely on the basis of statistics and the fact that every member of the group who sought to be retained was allowed to continue in employment as being a conclusive fact by itself. It is only relevant in the Tribunal's view to the extent to which it could contribute to a reasonable expectation on the part of a member of that group. A reasonable employee would have regard to the fact that there was a procedure to go through to apply to be retained. Such an employee would see that, invariably, such applications were granted. There were no other factors which a reasonable employee could have regard to, such as the fact that there were special reasons why members of the group had been retained in employment such as special needs of the organisation or to allow them to accrue reckonable service for pension purposes. Nor could an employee be able to see any other measures which might have been taken apart from the contract and the standard letters prescribed by it to demonstrate to members of the group that retention in employment after the age of 60 would not be granted in the normal course of events.
8 In the circumstances the Tribunal concluded that although the contract procedures were always undertaken in relation to members of the group the retirement age prescribed by the contract had not been implemented.9 As different members of the group had been retained in employment to different ages it was not possible to determine a normal retiring age and therefore the statutory provision of 65 applies."The challenge which is mounted in this case to the tribunal's decision by the appellants rests upon essentially one submission, which is that the tribunal adopted the wrong approach in law. Mr Griffiths-Jones who has appeared on behalf of the appellants accepts that the question of what is the "normal retiring age" is a question of fact to be determined by the fact-finding tribunal. That is well established: in the case of Hughes v Department of Health and Social Security [1984] ICR 557 , Sir John Donaldson MR, in a dissenting judgment which was, however, approved by the House of Lords in the same case, stated at page 581A:
"The normal retiring age, if it exists at all, has objective elements and has to be ascertained by an objective approach. It is not directly material what the claimant and those in a like position in fact thought or whether they thought about the problem at all. What matters is what understanding and expectation they could reasonably have had if they had thought about it at the relevant date. What is the normal retiring age, if any, is a question of fact for the tribunal of fact."
But it is submitted on behalf of the appellants that the normal retirement age is to be determined by the employer's policy. Reliance is placed upon a passage from the judgment of Sir John Donaldson MR in the case of Hughes (ante) , which reads as follows at page 581H:
"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."
Mr Griffiths-Jones accepts that Sir John Donaldson MR then went on to acknowledge that it may be clear that a promulgated policy is a sham or has been abandoned by the employer. In fact, the learned

judge in that case put the matter somewhat more widely at page 582B where he said:

"The D.H.S.S. had a very clear policy and there is no suggestion that it was a sham or had been abandoned or modified."
Consequently it is contended on behalf of the appellants that the proper approach is first of all to see whether there is a policy promulgated by the employer; and secondly, if there is, then to see whether that policy is a sham or has been abandoned or modified. It is accepted that it is necessary to look at what has happened in practice, but it is said that one does so simply to answer the question whether the policy is a sham or has been abandoned or modified. It is submitted that it is important in the present case that a particular procedure was still gone through at the age of 60 and that the significance of that could only be overcome if the procedure had become a mere formality. Here, attention is drawn to the fact that the contractual terms of employees were altered if they remained on beyond 60, in particular because they were then subject to six monthly reviews. Mr Griffiths-Jones also points out that 40% of the relevant group of employees chose to retire at the age of 60, although he does accept the tribunal's finding of fact that no one in the respondent's grade who wished to remain had since the year 1968 been compulsorily retired.Reliance is also placed by the appellants on the decision of the Court of Appeal in Brooks v British Telecommunications PLC [1992] ICR 414 . That case concerned employees who worked for British Telecom in engineering technical grades and the Court of Appeal upheld an Industrial Tribunal's finding that the normal retiring age for those employees was 60. Mr Griffiths-Jones stresses the fact that British Telecom and the Post Office used to be one organisation and that the essential terms and conditions of employment and the policies relating to employment in each organisation derive from common roots.The nub, however, of the appellant's case is that the Industrial Tribunal here, though it set out the correct test in the first half of paragraph 7 of its decision, then did not apply that test but instead looked at the likelihood of what would happen. In support of that argument, Mr Griffiths-Jones points to the use by the tribunal of the phrase "a reasonable expectation" and submits that that combined with the statement in paragraph 8 that "the retirement age prescribed by the contract had not been implemented" shows that the tribunal was focusing simply on whether or not employees expected to be allowed to stay on beyond the age of sixty. In so doing, it is said, the tribunal made an error of law. Moreover, there is no finding by the tribunal that the appellants' policy was sham or had been abandoned.On behalf of the respondent, Mr Westgate argues that the employer's policy is not the sole test, any more than the contractual terms of employment will necessarily be the sole test. The mere fact that the formal procedures under a policy were gone through does not mean that that policy may not have become a mere formality. He submits that what has happened in practice may be highly relevant and he draws attention to a passage in the judgment of Butler-Sloss LJ in the Brooks case which reads as follows at page 431:"... It is not suggested in this case either that the B.T. policy , as communicated, was a sham or had been regularly departed from ; or that it was not the genuine intention of B.T, I agree with Sir Christopher Slade that the only way in which the applicant's case would be sustainable would be by showing that the policy in question was never in practice implemented."[ Emphasis added ]That, submits Mr Westgate, demonstrates the importance which looking at what has happened in practice may have. Only in that way would it be possible to determine whether a policy has been regularly departed from or not in practice implemented. Mr Westgate has drawn our attention to a number of passages in the decision of the House of Lords in Waite v Government Communications Headquarters [1983] ICR 653 and in Barclays Bank PLC v O'Brien [1994] ICR 865 , which emphasise the potential relevance of evidence as to the age at which in practice employees in the group are regularly retired and which they have reasonably come to regard as their normal retiring age.The respondent argues that the Industrial Tribunal in the present case adopted the proper approach in law, which it had set out in the early part of paragraph 7 of the decision. It is said that it would be remarkable if the tribunal, having done that, had then forgotten that test later in the same paragraph and in paragraph 8. When the tribunal in that latter paragraph refers to the age prescribed by the contract of employment as not having been "implemented", it was simply stating that the presumption in favour of the retirement age found in the contract of employment had been rebutted. Mr Westgate accepts that a tribunal is not concerned solely with what happens in practice but submits that an established practice may be evidence of a norm. Here, he contends, there was evidence of a long, unchanging practice whereby employees in this group were not compulsorily retired at 60. So far as the Court of Appeal's decision in Brooks is concerned, it is submitted that the facts in that case were not the same as those in the present one, and in particular there had been in the Brooks case notices sent out by British Telecom that retention of employees beyond the age of 60 would become increasingly unlikely. In the present case there were, it is said, no additional signals of that kind by the employer to the relevant employees.The law on this topic has been the subject of a number of important judicial decisions. The starting point for present purposes must be the decision of the House of Lords in Waite (ante) . It is important in our view to note that the House of Lords there rejected the proposition that the normal retirement age is to be found by looking exclusively at the conditions of employment applicable to the relevant group of employees. That had been a proposition to be found in Nothman v Barnet London Borough Council [1978] ICR 336 . In his speech in Waite , with which all their Lordships agreed, Lord Fraser of Tullybelton stated as follows at pages 661 to 662:"I have reached the opinion that the Court of Appeal in Nothman [1978] I.C.R. 336 stated the law in terms which were too rigid and inflexible. If the normal retiring age is to be ascertained exclusively from the relevant contract of employment, even in cases where the vast majority of employees in the group concerned do not retire at the contractual age, the result would be to give the word "normal" a highly artificial meaning. If Parliament had intended that result, it would surely not have used the word "normal" but would have referred directly to the retirement age specified as a term of the employment. Moreover in a case where, unlike Nothman , the contract provides not for an automatic retiral age but for a minimum age at which employees can be obliged to retire, it would be even more artificial to treat the minimum age as fixing the normal age, as the respondents would have us do, even in a case where the minimum age has become a dead letter in practice. ...I therefore reject the view that the contractual retiring age conclusively fixes the normal retiring age. I accept that where there is a contractual retiring age, applicable to all, or nearly all, the employees holding the position which the appellant employee held, there is a presumption that the contractual retiring age is the normal retiring age for the group. But it is a presumption which, in my opinion, can be rebutted by evidence that there is in practice some higher age at which employees holding the position are regularly retired, and which they have reasonably come to regard as their normal retiring age. ... - the expression "normal retiring age" conveys the idea of an age at which employees in the group can reasonably expect to be compelled to retire, unless there is some special reason in a particular case for a different age to apply. "Normal" in this context is not a mere approach by ascertaining the age at which the majority of employees actually retire, without regard to whether some of them may have been retained in office until a higher age for special reasons - such as a temporary shortage of employees with a particular skill, or a temporary glut of work, or personal consideration for an employee who has not sufficient reckonable service to qualify for a full pension. The proper test is in my view not merely statistical. It is to ascertain what would be the reasonable expectation or understanding of the employees holding that position at the relevant time. The contractual retiring age will prima facie be the normal, but it may be displaced by evidence that it is regularly departed from in practice."The decision in the case of Hughes (ante) established principally that the relevant time at which to ascertain the "reasonable expectation" is the effective date of termination of employment of the claimant or claimants. That case understandably contains a certain amount of emphasis upon the policy of an employer, because it was dealing with a Central Government department as the employer and with the situation where alleged changes in administrative policies were said to have rebutted the presumption in favour of the contractual retiring age. Various circulars were being relied on as the basis for the reasonable expectation that a higher age had replaced the contractual age as the norm. But while policy may be potentially important in such a case, we do not regard that decision as indicating that the employer's policy is to be seen necessarily as the end of the matter. To focus exclusively on such a policy, without regard to what has happened in practice, would be as objectionable as to focus exclusively on the contractual age of retirement, an approach which was expressly rejected by the House of Lords in Waite . The passage from the judgment of Lady Butler-Sloss in Brooks , to which we have referred earlier, is only one of the many judicial statements which emphasise the relevance which observance of or regular departure from a policy or contractual age may have. There can be no doubt whatsoever that it is possible for a contractual retiring age to be displaced as the presumed "normal retiring age" by evidence that it is regularly departed from in practice, as was held in the case of Waite . The same must be true of any stated retirement age to be found in an employer's policy. That too may be displaced by such evidence of what happens in reality, and indeed Mr Griffiths-Jones concedes that that is so.The words used by Sir John Donaldson MR in the Hughes case referring to a policy being a "sham" or having been "abandoned or modified" are not to be seen as if they were a statutory provision. If a policy of normal retirement at age 60 has become a formality, that also would suffice to rebut any suggestion that the policy age was to be taken as the normal retirement age. As a proposition, that too is acknowledged by the appellants and it accords with the decision of this appeal tribunal in the Secretary of State for Scotland v Meikle [1986] IRLR 208 . There it was held that an Industrial Tribunal had been entitled to find that the contractual retiring age had ceased to be the normal retiring age for prison officers because it was regularly departed from in practice. The appeal tribunal did not accept that the word "abandoned" as used by Lord Fraser of Tullybelton in Waite (ante) required it to be shown that the contractual retiring age had been given up absolutely. It was held that all that was meant by that word was that the evidence showed that the contractual retiring age had been departed from, resulting in the retiral of employees at a variety of higher ages. In such circumstances the presumption in favour of the contractual retiring age might be rebutted.The question which therefore arises is whether the tribunal in the present case applied the correct test in law or not. There is no doubt that it set out the correct test in paragraph 7 of its decision when it identified the appropriate question as being "what at the effective date of termination of Mr Otomewo's employment and on the basis of the facts then known was the age which employees of all ages in the group to which he belonged could reasonably regard as their normal retiring age." The appellants accept that that was a proper statement of the approach to be adopted. The tribunal then emphasises the fact that the test was an objective one and that statistics alone could not be conclusive. That too was a proper approach. Did it subsequently depart from that appropriate test? We do not see that the reference in paragraph 7 to "a reasonable expectation on the part of a member of that group" demonstrates any departure from the proper approach. Such phraseology appears in the decision of the House of Lords in the Waite case, where reference is made to "the reasonable expectation or understanding of the employees holding that position at the relevant time": see page 662H. As for the tribunal's statement in paragraph 8 that "the retirement age prescribed by the contract had not been implemented", that seems to us to mean merely that the employer's policy, in so far as it involved any question of compelling the retirement of those who reached 60 but wished to stay on beyond that age, had not been applied in practice. That in itself is enough to amount to an "abandonment" of a policy of compulsory retirement at 60. No doubt the choice of wording to be found in that passage in the tribunal's decision was influenced by the similar wording for the appropriate test which one finds in the judgment of Butler-Sloss LJ in the Brooks case (page 431B) and the judgment of the Court of Appeal in Barclays Bank PLC v O'Brien (ante) where it was said that:"A normal retiring age is an aspect of an employer's employment policy which, once promulgated to the employees concerned, will take effect as their normal retiring age unless it is a sham or has been abandoned (see Hughes [1984] I.C.R. 557, 581) or is never implemented : see Brooks v. British Telecommunications PLC [1992] I.C.R. 414, 433."[ Our Emphasis ]Therefore we do not see that there is any room for criticism of the Industrial Tribunal in the present case in its use of such terminology.In essence, therefore, the tribunal found as a fact that the presumption in favour of the contractual retirement age had been rebutted because it had in practice not been implemented. That was a proper approach for the tribunal to adopt as a matter of law and it must follow from that that the basis of the appellants' challenge in the present case is unsound. The tribunal did not go wrong in law in the test which it applied.Since its conclusion is a finding of fact, its decision could only then be attacked on the basis that this was a perverse finding which no reasonable tribunal properly directing itself could have reached. That is not even a submission made on behalf of the appellants. But in so far as some of their arguments might seem to be directed towards such a submission, we shall deal briefly with them. We do not see the fact that there would be a change in an employee's contractual terms after the age of 60 as meaning automatically that 60 had to be seen as the normal retiring age. It was one of a large number of relevant considerations, and we can see nothing to suggest that the tribunal failed to take it into account.Next, the appellants seem to rely on the decision in Brooks not merely as an authority on the law but as being determinative of the normal retirement age for the present respondent. Yet it is important to note that all that the Court of Appeal was doing in the Brooks case was finding that the Industrial Tribunal had applied the right test. The tribunal of first instance had reached a finding of fact as to the normal retirement age for a particular group of B.T. employees. It found that the normal retirement age for those employees in the engineering and technical grades in certain divisions of B.T., as at the period 1982 to 1988, was 60. The tribunal in the present case was dealing with a very different factual situation. It had to determine the normal retirement age for non-managerial uniform grade employees in the West London office of Royal Mail London area as at 24th May 1996. Thus both the group of employees concerned and the relevant time were different from those in the Brooks case.It is right that 40% of those relevant employees chose to retire voluntarily at the age of 60, as the tribunal itself found. But it also found that not one of the employees since 1968 who had worked at that office and been of that grade and who then applied to remain was made to retire at the age of 60. That was no doubt seen by the tribunal as a remarkable piece of evidence, covering as it did a period of some 28 years. There seemed to have been no exceptions to it, nor was there any evidence of the employer writing to the employees to indicate that things were likely to change at some time in the future, as had been in the case of Brooks .In all these circumstances, even if an argument of perversity had been advanced by the appellants, we would have rejected it. We would have taken the view that the decision at which the tribunal arrived was one which was properly open to it on the findings of fact which it made. It was in effect determining that the contractual retiring age had been departed from so regularly and on such a scale that the presumption in favour of that age could no longer apply. We for our part can see no reason to interfere with that conclusion and this appeal must therefore be dismissed.