RONALD BOSOMWORTH KENNETH HARLAND DEREK MCKENNA (DECEASED) BARRIE BLOOM [2003] UKEAT 0728_02_1007

EMPLOYMENT APPEAL TRIBUNAL

BAILII case number: [2003] UKEAT 0728_02_1007

Case No Appeal No. EAT/0728/02

Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

Between

RONALD BOSOMWORTH KENNETH HARLAND DEREK MCKENNA (DECEASED) BARRIE BLOOMRESPONDENT

Before

Mr Justice Burton

Date 10 July 2003

[1]APPEARANCES For the Appellant MR R DOWNEY (of Counsel) Instructed by: Messrs Jacksons Solicitors Innovation House Yarm Road Stockton on Tees, TS18 3TN For the Respondents (For the First Respondent) (For the Second and Third Respondents) For the Fourth Respondent MS U BURNHAM (of Counsel) Instructed by: Messrs Russell Jones and Walker Solicitors Brazennose House Brazennose Street Manchester M2 5AS MR E LEGARD (of Counsel) Instructed by: Messrs Archers Solicitors Barton House, 24 Yarn Road, Stockton-on-Tees TS18 3NB; MR B CARR (of Counsel) Instructed by: Messrs Rowley Ashworth Solicitors 247 The Broadway Wimbledon London SW19 1SE THE HONOURABLE MR JUSTICE BURTON (PRESIDENT) This has been the hearing of an appeal by the Respondent employer Tees and Hartlepool Port Authority Ltd, represented before us, as below, by Mr Raoul Downey of Counsel, against the unanimous Decision of the Employment Tribunal at Thornbury on Tees, after a hearing on 8, 10 and 11 April 2002, promulgated on 1 May 2002. This decision was that the Applicants, Mr Bosomworth, Mr Harland, the late Mr McKenna, and Mr Bloom were entitled not to be unfairly dismissed and to redundancy payments, notwithstanding their age, and that their claims for breach of contract, unfair dismissal and redundancy payments were well-founded. Below, the interests of the second and third Applicants were represented by Mr Edward Legard of Counsel, who similarly appeared before us, the first Applicant was in person and has been represented before us by Ms Ulele Burnham, and the fourth Applicant, who was represented by Mr Taylorson, a Union official, below, has been represented before us by Bruce Carr of Counsel. All Counsel submitted very helpful written submissions: the burden of the oral argument has been mainly carried, and ably carried, by Mr Downey and Mr Carr. The four Applicants were employed by the Respondent for a long time, the first Applicant since May 1963, the fourth Applicant since December 1963, the second Applicant since August 1966, and the third Applicant since April 1978. Their contracts were terminated, as of 30 September 1999, on 5 August 1999, when the first, second and fourth Applicants were 63, and the third Applicant was 62. None of them had yet qualified for full pension under Inland Revenue Rules. The relevant statutory provisions are as follows: (i) Section 109 of the Employment Rights Act 1996 ("the 1996 Act") provides that:

"(1) Section 94 [the right not to be unfairly dismissed] 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 60-5."

By virtue of section 235(1) "position", in relation to an employee, means the following matters taken as a whole – (a) his status as an employee (b) the nature of his work, (c) his terms and conditions of employment." (ii) There is a similar provision in section 156 of the 1996 Act relating to disentitlement to redundancy payment by virtue of such upper age limits, similarly so defined. (iii) As will appear, it was common ground that the provisions of what was agreed collectively with the relevant unions (there being, as will appear, an issue as to what that was) were incorporated into the individual contracts of employment of the Applicants and their fellow-employees. In that regard the following provisions of the Trade Union and Labour Relations (Consolidation) Act 1992 ("TULRA") are relevant:

"178(1) In this Act "collective agreement" means any agreement or arrangement made by or on behalf of one or more trade unions and one or more employers or employers' associations and relating to one or more of the matters specified below; and "collective bargaining" means negotiations related to or connected to one or more of those matters. (2) The matters referred to above are – (a) terms and conditions of employment … 179(1) A collective agreement shall be conclusively presumed not to have been intended by the parties to be a legally enforceable contract unless the agreement- (a) is in writing, and (b) contains a provision which (however expressed) states that the parties intend that the agreement shall be a legally enforceable contract."

In paragraph 45 of the Employment Tribunal's Decision, it set out verbatim, as we now do, the lucid exposition by Peter Gibson LJ, giving the judgment of the Court of Appeal in Barclays Bank plc v O'Brien

[1994] IRLR 580

at paragraph 13, setting out the legal framework for consideration of the question of "normal retirement age":

"The following propositions can be distilled from the authorities: (1) the social policy underlying [the then statutory provision embodying the equivalent to s109 of the 1996 Act] is to secure fair treatment as regards compulsory retirement as between different employees holding the same or a similar 'position' (in the statutory sense): Waite [1983] IRLR 341 at 343 … Such employees can conveniently be referred to collectively as 'the group' ( Hughes [1985] IRLR 263 … (2) Where there is a contractual retirement age applicable to all or nearly all the employees in the group, there is a presumption that the contractual retiring age is the normal retiring age for the group ( Waite at 343) (3) The presumption can be rebutted by evidence that there is in practice some higher age at which employees in the group are regularly retired and which they have reasonably come to regard as their normal retiring age (ibid). (4) 'Normal' in this context is not a synonym for 'usual' and is not to be determined by a purely statistical approach ( Waite … at 344 …) (5) The question to be asked by the [employment] tribunal is what, at the effective date of termination of the applicant's employment and on the basis of the facts then known, was the age which employees of all ages in the group could reasonably regard as their normal retiring age? See Brooks [1992] IRLR 66. (6) That some employees could reasonably expect to retire at different ages for special reasons does not entail that they and their group do not have a normal retiring age ( Waite … at 343 …). (7) The 'position' of the Applicant does not include the previous history of his employment Hughes ,,,) nor his age ( Brooks …), but the fact that employees have different retiring ages as terms of their contracts of employment may be taken into account in determining whether the employees are in the same 'position' ( Barber [1992] IRLR 410). (8) The test of reasonable expectation is an objective one, not dependent on what the applicant or any other individual in the group actually thought ( Hughes …at 370 …). (9) 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 ( Hughes .. at 370 ..) or is never implemented ( Brooks .. at .. 74). (10) If the contractual retiring age has been abandoned and employees retire at a variety of higher ages, there will be no normal retiring age and the statutorial alternative of 65 will apply ( Waite ). The history of the matter as found by the Tribunal, and as apparent from the documents which we have seen, is as follows. Prior to 1986, there was a collective agreement which provided, originally, that the normal retirement age would be 65 for male employees and 60 for female. As a result of the Equal Pay Act and the Equal Treatment Directive it was common ground that 65 applied to all employees, and the relevant collective document, called the Port Council Agreement ("

PCA"), the pre-1986 version of which has not been found, remained in force until April 1986. There were new PCAs every 3 years or so. Before the Employment Tribunal, and before us, there were only copies of the form of the PCA as it was in force between 1995 and 1998 and, most relevantly, as it was in force as from 1 April 1999; and it is in fact to the latter document to which all parties looked at the Tribunal for their interpretation and construction of the PCA, it being common ground that at all material times since May 1986 the PCA had remained in the same form in relation to the matters in issue in these proceedings. Such PCA included (i) no 'entire agreement clause', i.e. no provision that it contained all the terms agreed or arrangements made between the parties to it, the Appellant and the signatory unions and (ii) no provision relating to legal enforceability, by reference to s179 of TULRA. The PCA was expressed to be an 'Agreement between Tees and Hartlepool Port Authority Ltd and the Signatory Unions as represented by the THPA Ltd Port Council in respect of Salaries and Conditions of Employment for Employees at all THPA installations and covered by Port Council negotiations'. We have minutes of what is described as the Port Council for Monthly Salaried Industrial Staff in our papers, to which reference will be made below. The following provisions of the PCA are relevant:

"(1) This Agreement outlines the general terms and conditions of employment for all employees listed in Appendix 1. (2)(a) Variations from these general terms and specific work arrangements are shown in the relevant Departmental Appendix 10 or as otherwise notified in writing to individual employees… (3) All previous Council Agreements are superseded by this agreement."

Clause 43 of the PCA as from May 1986 provided as follows:

"Normal retirement is at 62 years of age."

Prior to the 1986 PCA being voted on by ballot of the employees, as it was, and thus accepted by the unions, there were relevant negotiations in relation to retirement age, and the minutes of the tenth meeting of the Port Council (to which we have referred above) dated 13 May 1986, attended on the " Management Side " by three named persons, including " Mr J K Beckton (Chairman) " record the following:

"A brief discussion centred on the pension proposals and Mr Beckton confirmed that the retirement age would be 62 and for those who could not achieve the maximum under the Inland Revenue rules, then they would be permitted to work on until 65 or earlier, in accordance with the details of the handout issued on 1 May 1986 (Amendment 3)….After a further adjournment, Mr Carroll confirmed that the union officials and representatives had agreed that a ballot should be held and Mr Beckton confirmed the Authority's co-operation in the arrangements."

Amendment 3 above referred to, dated 1 May 1986, concludes as follows:

"Finally, I confirm that those males who cannot achieve the Inland Revenue limit at the age of 62 would be permitted to continue at work until – (a) their pension calculated at the age of 62 and increased by not less than 6% p.a. plus the lump sum, is equal to 2/3rds of final salary: OR (b) they reach the age of 65 whichever is the earlier."

The material findings of fact by the Employment Tribunal include the following:

"24. We heard the oral evidence of Mrs Blance. She was extremely co-operative and helpful. She had started as a trainee in the Port Authority in 1990, became a personnel officer in 1993 and a personnel manager in 1999. She had therefore not been there during the 1986 negotiation. In her experience, no-one who has asked to work beyond the age of 62 had ever been turned down … 25. Mr Bosomworth's evidence was that normal retirement age as he understood it was 65 unless he had previously reached the Inland Revenue limit. He referred to three other people who had gone on past the age of 62…. He told us that nobody to his knowledge had been compelled to leave at 62. He explained that he had "cut his cloth" by planning his mortgage some 20 years earlier to be paid off when he was 65. He never altered that "target" because he had no reason to. He also knew of one person after his dismissal who had been allowed to go on past the age of 62. … 26. The evidence of Mr Harland, which we accepted, was very illuminating. He had been a shop steward who along with others had been involved in the 1986 pay negotiations. As in other years, the negotiations were wide-ranging. Mr Beckton would ask the staff side for their "shopping list" of demands. There followed what he described as "toing and froing" of proposals. He confirmed that on 1 May 1986 no agreement was reached and then on 13 May 1986 full time officials were brought in. the most important part of Mr Harland's evidence was that it was not only his own view but that of all other people on the union negotiating side that if there had been the slightest mention of working beyond 62 being nothing more than a 'concession', there would have been no agreement at all . No union negotiating body would give away the right of some of its members to work to 65 without asking those members in very clear terms for their views and 'taking their instructions'. In practice Mr Harland cannot remember anyone being forced to go at 62….Mr Harland also gave evidence that the proposals put forward on 13 May were put to a ballot as an option to retire at 62, but a right if one so wished to remain to 65. That was the package put to the membership, voted on, and accepted which then became the collective agreement governing the individual contract of employment. It is Mr Harland's opinion that Mr Beckton too thought this was being agreed, but as it has been pointed out to us, we have not heard the evidence of Mr Beckton who has retired. 27. When asked by Mr Downey why the terms of the [PCA] had not been queried in the years since 1986, Mr Harland's reply, which we fully accept not only as truthful but as reasonable, was that there was no need to if no employees were being retired compulsorily after the age of 62. The 'agreement' was working in the way in which the trade union officials present at the 1986 [negotiations] had thought it was going to work. Why should they question what appeared to them to be simply brevity in drafting in one document (the [PCA]) which was amplified in other documents (Amendment 3, other memoranda and pension deed) when reality was entirely in accordance with what the staff side expected."

The first and second Applicants produced materially identical letters, each dated 22 January 1998, signed by Mrs Sally Blance (referred to by the Employment Tribunal in paragraph 24 of its Decision quoted above), as Personnel Officer, on notepaper of the Tees and Hartlepool Port Authority Pension Scheme. We quote that sent to the first Applicant:

"Normal Retirement Age As you will reach the Tees and Hartlepool Port Authority Pension Scheme Normal Retirement Age of 62 on 10 June 1998, you are eligible to retire from that date, however you do have the option, Inland Revenue Maximum Limits permitting, to remain in employment up to the age of 65, with no ongoing contribution to the scheme, whilst receiving revaluation of your pension benefits calculated to age 62. Please indicate in writing, as far as you are concerned currently, your intended age of retirement so I may diarise appropriate calculation dates …"

The Tribunal's conclusions in the light of the above are set out in paragraph 30 of the Decision:

"The respondent has not produced any statistical evidence. We are not saying they are under a duty to do so, but there is then no evidence that differs from the information that we have been given by all of the witnesses before us that people retire at a variety of ages depending upon personal circumstances. There are relevant ages at which thresholds of pension entitlement are reached. At 57, an employee can choose to retire and his pension will not be subjected to reductions. At 62, an employee must stop contributing to the scheme, but if he does not draw his pension, i.e. carries on working, it grows in value between 62 and the date it comes into payment. At 65, or earlier attainment of Inland Revenue limits the employee is compelled to take his pension and retire. On the basis of these facts we consider that the reasonable expectation of everybody in Port Authority Employment, on an objective basis, was that they could work to the age of 65 as of right , unless before 65 they reached the Inland Revenue limits."

Mr Downey agrees, and in terms so conceded in the course of argument before us, that as at 25 July 1999 the normal retirement age at the Respondent Authority was 65, or earlier if an employee had by then reached Inland Revenue limits. He relies however on what occurred on, and after, 26 July 1999. On that date a memo was sent by a Mr Ian Cail on the Respondent's behalf to all Heads of Department, with a request that the contents of such memorandum be communicated to all members of staff. The memorandum read in material part as follows:

" Business Review . Most of you will already be aware that trading conditions in the first quarter of the current financial year have been extremely difficult … It has become clear that the recently announced cost-cutting initiative will need to be supplemented by the introduction of further measures. The Board has given this matter very careful consideration and the steps it is now embarking upon have not been taken lightly… However, current and forecast trading conditions have led us once again to re-examine our business needs and we must now, regrettably, embark upon a major redundancy programme across all sectors of the business … Although discussions will commence immediately on the redundancy programme, the numbers of employees will not be known until after 20 August 1999. … Now that the decision has been made, it is in the interest of both the Company and employees alike that the process is concluded speedily and efficiently. … One further measure which the Company has decided to implement is the withdrawal of the concession whereby certain employees have been permitted to remain in employment beyond normal retirement age. This concession is withdrawn with effect from 1 October 1999. Any employee who has reached the age of 62 by 30 September 1999, will, therefore, automatically retire on that date."

As a result of this letter, as is clear, there were substantial redundancies. The four Applicants however, being over 62, were said not to qualify for redundancy payments as a result of the " withdrawal of the concession ". The Tribunal did not so conclude. Mr Downey's Notice of Appeal against its Decision rested largely on the following propositions: (i) that the Tribunal erred in concluding that the statements made by Mr Beckton at the Port Council meetings in 1986 had legal effect, and ought to have concluded that they were not incorporated into the terms of the PCA in 1986 or subsequently. (ii) that no reasonable Tribunal could have concluded that the contractual retirement age was anything other than 62. (iii) that any conclusion that there was a contractual retirement age of "65 unless Inland Revenue limits were reached" was perverse, and, primarily, (iv) that the Tribunal failed, in assessing the reasonable expectation of employees as to the normal retirement age, to do so in the light of and after Mr Cail's memorandum of 26 July 1999, namely as at the termination of the Applicants' contract on or about 5 August 1999, as of 30 September 1999. Mr Carr persuasively submitted, and we conclude, that it is clear (and Mr Downey in the event hardly resisted this proposition) that the parties below, and the Tribunal, all addressed the question of contractual retirement date on the basis that, whatever the position was, it was settled as of May 1986 and did not change between then and 25 July 1999. Mr Downey effectively abandoned his case based upon Clause 3 of the PCA, namely that in some way subsequent PCAs changed the position, even if the arrangements with Mr Beckton were incorporated into the 1986 PCA. In any event we are satisfied that such contention is unarguable. If the "Beckton arrangements" were incorporated into the individual contracts of employment, notwithstanding not being spelt out in terms in writing in the PCA, then the fact that the written PCA was superseded by subsequent PCAs would not prevent those Beckton arrangements continuing to have effect as incorporated into individual contracts of employment, not least because, as was plainly the evidence which the Tribunal accepted, those arrangements continued to be applied. Addressing therefore the issue of incorporation of the Beckton arrangements in May 1986 and thereafter, the following matters arise: (i) No individual contracts of employment of the four Applicants (or indeed even any samples of such contracts) could be produced, so that the precise words used in order to incorporate collective agreements or arrangements are not available. It was and is however common ground that (at least) the PCA itself was incorporated, and in the absence of any wording to the contrary, it must be clear that collective agreements do, by virtue of s178 of TULRA, include not simply agreements but also " arrangements ". By virtue of s179 such collective agreements (or arrangements) do not have to be in writing: they would simply not be enforceable as between the unions and the employers unless they are in writing (and include an express provision of legal enforceability, not present here). Thus there is Court of Appeal authority ( Marley v Forward Trust Group Ltd

[1986] ICR 891

that a collective agreement which is not legally enforceable can nevertheless be incorporated into the individual contracts of employment: and see also a decision of this Appeal Tribunal in Edinburgh Council v Brown

[1999] IRLR 208

which made clear (in particular at paragraph 19) that agreements/arrangements which are not in writing can similarly be so incorporated. (ii) Further, in order to be incorporated into the individual contract of employment, custom and practice may be sufficient ( Henry v London General Transport Services Ltd

[2002] ICR 910

, as may be the fact of an employee continuing in employment on the basis of it (as canvassed in Alexander v Standard Telephone and Cables Ltd

[1991] IRLR 286

and as found in Harris v Richard Lawson Autologistics

[2002] ICR 765

). The latter is a case in which an employee's claim failed because he was held to a term negotiated by his shop steward, and at para 78 Kennedy LJ said as follows:

"Revised terms of employment were negotiated with the shop steward, who plainly had authority to negotiate. There was then an interval during which, so far as the employers were concerned, it was reasonable to conclude that the revised terms were adopted by the employees and thereafter the work went on apparently on those terms."

As Counsel for the Applicants pointed out, the most that can be said for Clause 43 of the PCA is that it is a statement that " normal retirement age is 62 years of age ". That is submitted to have been an incorrect statement, in the light of the representations that had been made by Mr Beckton, upon the basis of which the unions agreed with the Respondent and the employees voted in the ballot, informed by the content of Amendment 3 and Mr Beckton's confirmation of it. As is clear from the findings of fact by the Tribunal, all parties thereafter acted upon the basis of Amendment 3, and we have set out in paragraph 15 above Mr Downey's concession as to what the position in fact was as at 25 July 1999. The question as to whether, in effect, Amendment 3 was incorporated into the individual contracts of employment of the four Applicants is important for the following reason. Mr Downey relies upon Court of Appeal authority that if the normal retirement age is simply an expectation of the employees, and a policy of the employer, then it can be unilaterally changed by the employer with immediate effect . He accepts that this cannot be done if there is a contractual entitlement. As to the latter proposition, it is plain that an employer cannot change a contractual term unilaterally. This is plain from Robertson and Jackson v British Gas Corporation

[1983] IRLR 302

, which related to an incentive bonus scheme to be found in a collective agreement, which existed at the date of employment of the claimant, and the terms of which were incorporated into the individual contracts of employment Kerr LJ said as follows at para 24:

"It is true that collective agreements such as those in the present case create no legally enforceable obligation between the trade union and the employers. Either side can withdraw. But their terms are in this case incorporated into the individual contracts of employment, and it is only if and when those terms are varied collectively by agreement that the individual contracts of employment will also be varied. If the collective scheme is not varied by agreement, but by some unilateral abrogation or withdrawal or variation to which the other side does not agree, then it seems to me that the individual contracts of employment remain unaffected. This is another way of saying that the terms of the individual contracts are in part to be found in the agreed collective agreements as they exist from time to time, and, if they cease to exist as collective agreements, then the terms, unless expressly varied between the individual and the employer, will remain as they were by reference to the last agreed collective agreement incorporated into the individual contracts."

This position was reiterated by this Appeal Tribunal in Edinburgh Council , per Lord Johnston:

"21. We do not consider that as such it was a discretionary element in the contract giving a right to the employer unilaterally to change the policy or remove the term … 22. … We endorse the view expressed by the employment tribunal that the 1992 change of policy was a unilateral variation of an incorporated term in the respondent's contract, was thus unlawful and left the original term stemming from the 1987 decision incorporated …"

As for the former proposition, this stems from a number of authorities, all relating to the unilateral withdrawal of what were found to be non-contractual and administrative policies relating to retirement age, where contractually the retirement age was lower than had in practice been applied. In the House of Lords decision of Hughes

[1985] IRLR 263

, the Department of Health and Social Security (DHSS) issued circulars and the Department of Environment (DOE) published bulletins, setting out new practices or policies in relation to retirement. So far as the DHSS circular was concerned, issued on 3 June 1981, this effected a change of policy, operative in two stages from 1 April 1982 and 1 April 1983, such as to reduce the retirement age from 65 down to 60. The DOE bulletin was issued in March 1981 relating to reduction of normal retiring age from 65 to 63, which, it was made clear by a subsequent bulletin of August 1981, would be operative in March 1982. Lord Diplock delivered the only substantive speech, and the material passages read as follows:

"21. Lord Fraser [in Waite ] also speaks of 'the relevant time' at which to ascertain the reasonable expectation or understanding of employees holding the same position as the claimant if some other age or the statutory ages of 65 for a man and 60 for a woman is to be capable of displacing the contractual retiring age as 'the normal retiring age' within the meaning of [now s109]. The Court of Appeal was unanimously of the opinion, in my view rightly, that under the statute, what Lord Fraser was referring to as 'the relevant time' was the effective date of termination of the claimant's employment, or, to be strictly logical, the punctus temporis immediately before that termination took effect. 22. My Lords, the Court of Appeal was also unanimously of the opinion that the contractual retiring age, i.e. the age at which Mr Hughes and Mr Coy could be compelled to retire, has been throughout their service in Crown employment the age of 60. No other conclusion is possible in view of those provisions of the primary code which I have cited earlier … But there is left to the head of each Government department a discretion to permit a civil servant employed in his Department to postpone the date of his retirement until he attains some higher age. Where as a matter of administrative policy a department decides that for the time being it is in the interests of departmental efficiency that a particular category of employee should … be permitted if they so wish to remain in the employment of the department until they attain some specified age higher than 60, and such decision is communicated … employees in that category have a reasonable expectation that the higher age so specified has replaced the age of 60 as their 'normal retiring age' … 23. But this remains the case only so long as the departmental circular announcing that administrative policy to the employees affected by it remains in force. Administrative policies may change with changing circumstances, including changes in the political complexion of governments. The liberty to make such changes is something that is inherent in our constitutional form of government. When a change in administrative policy takes place and is communicated in a departmental circular to, among others, those employees in the category whose age at which they would be compulsorily retired was stated in the previous circular to be a higher age than 60 years, any reasonable expectations that may have been aroused in them by a previous circular are destroyed and are replaced by such other reasonable expectations as to the earliest date at which they can be compelled to retire if the administrative policy announced in the new circular is applied to them."

In Bratko v Beloit Walmsley Ltd

[1995] IRLR 629

, a similar question arose in relation to ordinary employment, i.e. not employment by Government, involving questions of changes of complexion of governments, such as was referred to by Lord Diplock. The contractual retirement age was asserted to be 65, although, as this was not accepted by the employers the matter had to be remitted for rehearing, and there was a unilateral reduction by the employer to 64 by a written notice dated 7 October 1991, to take effect from 31 March 1992. On the assumption that there was no contractual right to the higher retirement age, it was said by this Appeal Tribunal to have been rightly conceded (paragraph 2 of the judgment of Judge Hicks QC) that "if a normal retirement age of 65 had prevailed only on a non-contractual basis, the employers would have been entitled to reduce it unilaterally, and that the communications which they made were effectively for that purpose". As can be seen, both of these unilateral changes by employers were given with a certain degree of notice. Effectively no notice whatever was given by the Respondent Authority in our case. However in the Court of Appeal decision in Brooks v British Telecommunications plc

[1992] IRLR 66

, no such notice was said to be required in relation to the removal of the reasonable expectation of employees and hence the unilateral change of a normal retiring age.

(i) Per Butler Sloss LJ at para 35:

"It is agreed in the present case that the contractual retiring age of all the appellants was 60, and consequently the normal retiring would be 60, unless rebutted by evidence. There was no staging of retirement as in Hughes . It is open to an employer to change his policy for the normal retiring age, and so long as it does not breach the contractual retiring age, such a policy can change overnight . [Our underlining.] It requires, of course, properly to be communicated to the employees affected before it can have effect, but, once communicated, I see no reason why the effect should not be immediate. When it takes effect it consequently alters the previous expectation that the group had of being retained in employment until a higher age." (ii) Per Sir Christopher Slade at para 45: "

A 'normal retiring age' is an aspect of an employer's employment policy … Provided only that such a course involves no breach of his employees' contractual rights under their contracts of employment, it is fully open to an employer to introduce, by a change in administrative policy, a new specific age which is thenceforth to constitute the 'normal retiring age' for his employees or a group of them for the purposes of s [now s109]. Provided that any such change is properly communicated to the employees affected, it is capable of having immediate effect, even if it destroys their previous expectation of being retained in employment until a higher age. The passage … from the speech of Lord Diplock in Hughes … makes that clear." [This is a reference to the passage from Lord Diplock's speech which we have set out above, but which does not in terms deal with ' immediate effect ', because the bulletins and circulars before him did, as discussed above, each give some months of notice.] We are plainly bound by the Court of Appeal authority of Brooks , such that, if the retirement age in accordance with Amendment 3 was not a contractual entitlement of the Applicants, it could be unilaterally changed by the Respondent with immediate effect, but we are unhappy at such a situation and would hope that it could be reconsidered: (i) Even if such retirement age was a 'concession' and not contractual, it had lasted, and, on the evidence, uniformly applied, for 17 years and the Applicants (certainly, on the finding of the Tribunal, Mr Bosomworth) had acted to their detriment and acquired legitimate expectations, and one would have expected that, at the very least by reference to the withdrawal of waiver, acquiescence or estoppel in accordance with the principles of High Trees ( Central London Property Trust Ltd v High Trees House

[1947] KB 130

) or even the earlier doctrine in Hughes v Metropolitan Railway

[1877] 2 App Cas 439

, reasonable notice of withdrawal of such concession would be expected. (ii) It would appear to offend against the ever more established principle that the implied obligation of trust and confidence in a contract of employment is both fundamental and reciprocal. (iii) In any event it would appear to be an unacceptable way round the law and practice of redundancy and unfair dismissal, in respect of those with accrued expectations within sight of the onset of a planned retirement. It may be one thing for government departments, as in Hughes , not to be fettered from changing their administrative policies: it may even be appropriate for a business to make a policy change, in relation to changing the retirement age as part of business planning or recruitment policy. But what occurred here would appear to be nothing more than the most economic approach to a redundancy position: for the immediate lowering of the retirement age would enable those over 62 to be make immediately redundant without compensation. It is in that context that the giving of reasonable notice would appear to us to be a significant matter. If, for example, the unilateral 'change of policy' had been staged, or six or nine months or more notice of such change had been given, as in a case like Hughes or Bratko , then it would seem that the Respondent could not have achieved the intended effect of avoiding any payment of compensation. Some payment of damages for breach of contract would, it seems to us, have followed if they had then sought to terminate the Applicants' employment immediately. Further and more significantly, given that the 'normal retirement age' would have on that basis continued until the expiry of the reasonable period of notice, it would at least be highly arguable that if their employment were still terminated immediately the Applicants would have entitlement pursuant to s109 because at the 'punctus temporis' immediately prior to such termination the normal retirement age would not yet have altered. However we turn to consider whether the Amendment 3 retirement date was contractual as at 25 July 1999, so that in any event the unilateral change could have no effect, in accordance with the authorities referred to in paragraphs 23 and 24 above. The Tribunal's conclusions are and, as will appear, are unashamedly, open-ended. "49. We are cautious of giving the appearance of indecision. However, where all roads lead to the same place there is no shame in a Tribunal expressing alternative routes to its conclusions. 50. The difficult point to decide is whether there is a contractual retirement age, as Mr Legard suggests, which is '65 or such earlier time at which an employee reaches the Inland Revenue limit'. Whether there is a contract depends on whether 'consensus ad idem' was reached. This basic rule remains whether it be a collective bargain incorporated into the individual contracts or a personally negotiated one-to-one contract. We do not know , because we have not heard the evidence of Mr Beckton, what his underlying intention was on behalf of the Respondent. We are absolutely convinced that it was not the intention not only of the four Applicants before us, but not the intention of anybody on the union negotiating side in 1986 that there should be compulsory retirement of people below the age of 65 unless the Inland Revenue limit had been reached. On that basis, if there was a failure to have a meeting of minds in 1986, there was no underlying contractual retirement age of 62 agreed then. On the findings we have made, there is no normal retirement age either because all that we have is a flurry of retirements at various ages. There being neither a contractual nor otherwise normal retirement age the statutory age of 65 would apply. On the wording of section 109 and section 156, these Applicants therefore have the right to complain of unfair dismissal and the right to claim a redundancy payment. The alternative view is that if no different age of 62 was agreed in 1986, the previous contractual age remains – again 65. The further alternative applies if Mr Beckton was at one with the unions. Then there was a contractual age of "65 unless Inland Revenue limits were reached" just as Mr Legard argues. In that event, none of these applicants had reached 65 or Inland Revenue limits." It is apparent that the Tribunal reached three separate conclusions: (i) Option 1 : No contractual age agreed, therefore the statutory age of 65 applied. (ii) Option 2 : The pre-1986 contractual age of 65 continued after 1986. (iii) Option 3 : The Amendment 3 retirement age was contractual. None of these options was proposed or supported by Mr Downey on behalf of the Respondent, whose case always was that the contractual retirement age after April 1986 was 62 (but supplanted by the non-contractual 'concession'). On the analysis which we have set out above, only Options 2 and 3 would avail the Applicants, i.e. that there was a contractual retirement age which could not be unilaterally reduced to 62: Option 1, no contractual retirement age (but simply a statutory one) would enable the Brooks principle of a unilateral change of policy in July 1999 to prevail. It was only in his submissions in reply before us that Mr Downey for the first time sought to adopt the conclusion of the Tribunal in Option 1, and assert that, on that basis, the Respondent succeeded, by virtue of the Cail memorandum. Is it open to Mr Downey to run that argument on appeal? It does not appear as though he ran it below. Indeed on the face of it it could be said that Mr Downey conceded the point below. We turn to the paragraphs of the Tribunal Decision in which the question of the effect of the Cail memorandum was canvassed:

"42. Mr Downey then went on to submit that if there was a contractual retirement age the burden is on the applicant to show that it is not the normal retirement age i.e. that is has been abandoned or replaced by a higher or lower age. We tentatively agree with that submission, although we share Mr Legard's reservations about the burden of proof … Further, if there is a contractual retirement age of 62, Mr Downey submitted that different retirement ages being implemented at various times do not change the fact that "contractual" retirement age may remain synonymous with "normal" retirement age. In theory, we agree with that submission. Mr Downey then says that reasonable expectation of a normal retirement age has to be judged as at the effective date of termination and at that date, the policy of the Respondent had been set out in [July] in Mr Cail's memorandum, so that no one could have had a reasonable expectation after that time that the retirement age would be anything other than 62. Again we agree with him in theory provided that Mr Cail's memorandum is not, and cannot reasonably be viewed as, a departure from the employer's contractual obligations. If it is so viewed it is not, as Mr Downey suggests, a change of policy by the employer. We also agree with him that when one looks at reasonable expectation it is the objective consideration of employees in the group rather than for example the subjective views of employees of particular ages. As we have already indicated, the objective reasonable expectation of all employees was as the applicants argue. 43. Further we agree that where there is a contractual retirement age, the policy as to whether or not that age should be extended can be changed effectively with immediate effect. However, where there is no contractual retirement age, Mr Downey agreed with us that it cannot be unilaterally imposed. " [Our underlining.] Mr Downey does not accept that he made that concession. It may well be that the existence of that concession, or the Tribunal's belief in it, is what caused or permitted the Tribunal to conclude that Option 1 led to the same result as Options 2 and 3 (" all roads lead to the same place "). Mr Downey submits that if he made such concession, he should be freed from it, and, if he did not, there is a misunderstanding which should now be corrected. It has to be pointed out however that no express mention of this appears in Mr Downey's Notice of Appeal, either by way of challenge to Paragraph 43 of the Decision or, indeed, by way of what he sought to do in his oral reply submissions, namely building upon the Tribunal's conclusion as to Option 1. This is arguably therefore a situation in which an Employment Appeal Tribunal would not in the light of Kumchyk v Derbyshire County Council [1978] ICR 1116 permit a point to be argued which was not argued (and may even have been conceded) below, and/or in which in any event an argument sought to be made on appeal was not contained in the Notice of Appeal (particularly when it involves the withdrawal of an apparent concession which seems to have had significant consequences in the Tribunal's Decision). Neither of paragraphs 6(b) nor 6(d), which are the closest that the Notice of Appeal comes to address this point, asserts that the Employment Tribunal having found (as per Option 1) that there was no contractual retirement date prior to July 1999 (contrary to the submissions of both the Applicants and the Respondent) ought then to have found that the Cail memorandum unilaterally imposed one, as opposed (on Mr Downey's case) to re-imposing a previous contractual age of 62. Instead paragraph 6(b) of the Notice of appeal positively asserts Option 1 to be perverse ("

The Tribunal's conclusion that there was no contractual retirement age was perverse "). If such were permitted to be argued on appeal, the Applicants' Counsel could not realistically argue that they would suffer any prejudice, save that if the matter had expressly featured in a Notice of Appeal they would no doubt have put in a Respondent's Notice in order to support Option 3 as the only available conclusion for the Tribunal. We think it probable that the Tribunal was misled into including Option 1 by the content of paragraph 43 of its Decision, which may result from a concession consciously or unconsciously made by Mr Downey, and certainly appears to have followed from the fact that Mr Downey rested his case below and, until his reply, before us, on the basis that the contractual retirement age was 62 at all times after 1986. This is clear from paragraph 44 of the Decision:

"He concluded his submissions by saying that all that happened in this case was that in July the respondents reverted to enforcing their strict legal rights, which they had since 1986 by contract, to compel workers to retire at the age of 62."

But we are entirely satisfied that we do not need to rest the outcome of this appeal on such technicalities alone. The Respondent asserts that Option 1 is perverse, and the Applicants too do not support, and never have supported, it. We are entirely satisfied that Option 3 is the only possible answer, and the only answer consistent with the findings of fact of the Employment Tribunal and all the documents before us. The starting point is the very last paragraph in that part of the Decision in which the findings of fact are made:

"31. Mr Downey argued in his submissions that as a matter of fact we should find that Mr Beckton on behalf of the Respondents made it clear in 1986 that the employees of the Port Authority were being asked to give up the right to work to 65 in exchange for other benefits. We disagree entirely. Viewed as a whole his words, written and spoken, sent out the message for which the Applicants have argued."

It is in our judgment clear beyond doubt on the findings of fact of the Tribunal, which we have set out above, and without any need for Mr Beckton to have been called (the Respondent could in any event have done so) that Amendment 3 was agreed collectively, voted upon as part of the collective agreement by the workforce, and incorporated into the individual contracts of employment as a result: had it been necessary we would also have found that it was incorporated by virtue of the established and agreed custom and practice and the fact that the employees continued in employment on the basis of it. Both sides accept that the PCA was incorporated into the individual contracts of employment: it was however the full collective agreement, i.e. including Amendment 3 (which supplemented or overrode the statement in Clause 43) which was incorporated. We are satisfied that the Employment Tribunal's decision can be justified on the basis of Option 3, which it found as one of its three options (and, if necessary, on the basis of Option 2 which the Tribunal also found (but we would not have done)). Insofar as there was an error by the Tribunal in its consideration of and conclusions as to the effect of Option 1, we are entirely satisfied that there is no purpose in remitting the matter for further consideration by the Employment Tribunal (this or any other), because on the basis of the findings of fact of this Tribunal and the correct application of the law, no other conclusion could be reached than that as at 25 July 1999 not only the normal but also the contractual retirement age was 65, or earlier if Inland Revenue limits had not been reached. In any event, and if necessary, we would not have permitted the amendment of the Notice of Appeal which we are satisfied it would have been necessary for Mr Downey to have sought in order to run his reply point. Accordingly we dismiss this appeal. This has been the hearing of an appeal by the Respondent employer Tees and Hartlepool Port Authority Ltd, represented before us, as below, by Mr Raoul Downey of Counsel, against the unanimous Decision of the Employment Tribunal at Thornbury on Tees, after a hearing on 8, 10 and 11 April 2002, promulgated on 1 May 2002.

[2]This decision was that the Applicants, Mr Bosomworth, Mr Harland, the late Mr McKenna, and Mr Bloom were entitled not to be unfairly dismissed and to redundancy payments, notwithstanding their age, and that their claims for breach of contract, unfair dismissal and redundancy payments were well-founded.

[3]Below, the interests of the second and third Applicants were represented by Mr Edward Legard of Counsel, who similarly appeared before us, the first Applicant was in person and has been represented before us by Ms Ulele Burnham, and the fourth Applicant, who was represented by Mr Taylorson, a Union official, below, has been represented before us by Bruce Carr of Counsel. All Counsel submitted very helpful written submissions: the burden of the oral argument has been mainly carried, and ably carried, by Mr Downey and Mr Carr.

[4]The four Applicants were employed by the Respondent for a long time, the first Applicant since May 1963, the fourth Applicant since December 1963, the second Applicant since August 1966, and the third Applicant since April 1978. Their contracts were terminated, as of 30 September 1999, on 5 August 1999, when the first, second and fourth Applicants were 63, and the third Applicant was 62. None of them had yet qualified for full pension under Inland Revenue Rules.

[5]The relevant statutory provisions are as follows: (i) Section 109 of the Employment Rights Act 1996 ("the 1996 Act") provides that:

"(1) Section 94 [the right not to be unfairly dismissed] 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 60-5."

"178(1) In this Act "collective agreement" means any agreement or arrangement made by or on behalf of one or more trade unions and one or more employers or employers' associations and relating to one or more of the matters specified below; and "collective bargaining" means negotiations related to or connected to one or more of those matters. (2) The matters referred to above are – (a) terms and conditions of employment … 179(1) A collective agreement shall be conclusively presumed not to have been intended by the parties to be a legally enforceable contract unless the agreement- (a) is in writing, and (b) contains a provision which (however expressed) states that the parties intend that the agreement shall be a legally enforceable contract."

[6]In paragraph 45 of the Employment Tribunal's Decision, it set out verbatim, as we now do, the lucid exposition by Peter Gibson LJ, giving the judgment of the Court of Appeal in Barclays Bank plc v O'Brien

[1994] IRLR 580

at paragraph 13, setting out the legal framework for consideration of the question of "normal retirement age": "The following propositions can be distilled from the authorities:(1) the social policy underlying [the then statutory provision embodying the equivalent to s109 of the 1996 Act] is to secure fair treatment as regards compulsory retirement as between different employees holding the same or a similar 'position' (in the statutory sense): Waite

[1983] IRLR 341

at 343 … Such employees can conveniently be referred to collectively as 'the group' ( Hughes

[1985] IRLR 263

…

(2) Where there is a contractual retirement age applicable to all or nearly all the employees in the group, there is a presumption that the contractual retiring age is the normal retiring age for the group ( Waite at 343)

(3) The presumption can be rebutted by evidence that there is in practice some higher age at which employees in the group are regularly retired and which they have reasonably come to regard as their normal retiring age (ibid).

(4) 'Normal' in this context is not a synonym for 'usual' and is not to be determined by a purely statistical approach ( Waite … at 344 …)

(5) The question to be asked by the [employment] tribunal is what, at the effective date of termination of the applicant's employment and on the basis of the facts then known, was the age which employees of all ages in the group could reasonably regard as their normal retiring age? See Brooks

[1992] IRLR 66

(6) That some employees could reasonably expect to retire at different ages for special reasons does not entail that they and their group do not have a normal retiring age ( Waite … at 343 …).

(7) The 'position' of the Applicant does not include the previous history of his employment Hughes ,,,) nor his age ( Brooks …), but the fact that employees have different retiring ages as terms of their contracts of employment may be taken into account in determining whether the employees are in the same 'position' ( Barber

[1992] IRLR 410

(8) The test of reasonable expectation is an objective one, not dependent on what the applicant or any other individual in the group actually thought ( Hughes …at 370 …).

(9) 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 ( Hughes .. at 370 ..) or is never implemented ( Brooks .. at .. 74).

(10) If the contractual retiring age has been abandoned and employees retire at a variety of higher ages, there will be no normal retiring age and the statutorial alternative of 65 will apply ( Waite ).

[7]The history of the matter as found by the Tribunal, and as apparent from the documents which we have seen, is as follows. Prior to 1986, there was a collective agreement which provided, originally, that the normal retirement age would be 65 for male employees and 60 for female. As a result of the Equal Pay Act and the Equal Treatment Directive it was common ground that 65 applied to all employees, and the relevant collective document, called the Port Council Agreement ("PCA"), the pre-1986 version of which has not been found, remained in force until April 1986. There were new PCAs every 3 years or so. Before the Employment Tribunal, and before us, there were only copies of the form of the PCA as it was in force between 1995 and 1998 and, most relevantly, as it was in force as from 1 April 1999; and it is in fact to the latter document to which all parties looked at the Tribunal for their interpretation and construction of the PCA, it being common ground that at all material times since May 1986 the PCA had remained in the same form in relation to the matters in issue in these proceedings.

[8]Such PCA included(i) no 'entire agreement clause', i.e. no provision that it contained all the terms agreed or arrangements made between the parties to it, the Appellant and the signatory unions and

(ii) no provision relating to legal enforceability, by reference to s179 of TULRA. The PCA was expressed to be an 'Agreement between Tees and Hartlepool Port Authority Ltd and the Signatory Unions as represented by the THPA Ltd Port Council in respect of Salaries and Conditions of Employment for Employees at all THPA installations and covered by Port Council negotiations'. We have minutes of what is described as the Port Council for Monthly Salaried Industrial Staff in our papers, to which reference will be made below. The following provisions of the PCA are relevant:

"(1) This Agreement outlines the general terms and conditions of employment for all employees listed in Appendix 1. (2)(a) Variations from these general terms and specific work arrangements are shown in the relevant Departmental Appendix 10 or as otherwise notified in writing to individual employees… (3) All previous Council Agreements are superseded by this agreement."

[9]Clause 43 of the PCA as from May 1986 provided as follows:

"Normal retirement is at 62 years of age."

[10]Prior to the 1986 PCA being voted on by ballot of the employees, as it was, and thus accepted by the unions, there were relevant negotiations in relation to retirement age, and the minutes of the tenth meeting of the Port Council (to which we have referred above) dated 13 May 1986, attended on the " Management Side " by three named persons, including " Mr J K Beckton (Chairman) " record the following:

"A brief discussion centred on the pension proposals and Mr Beckton confirmed that the retirement age would be 62 and for those who could not achieve the maximum under the Inland Revenue rules, then they would be permitted to work on until 65 or earlier, in accordance with the details of the handout issued on 1 May 1986 (Amendment 3)….After a further adjournment, Mr Carroll confirmed that the union officials and representatives had agreed that a ballot should be held and Mr Beckton confirmed the Authority's co-operation in the arrangements."

[11]Amendment 3 above referred to, dated 1 May 1986, concludes as follows:

"Finally, I confirm that those males who cannot achieve the Inland Revenue limit at the age of 62 would be permitted to continue at work until – (a) their pension calculated at the age of 62 and increased by not less than 6% p.a. plus the lump sum, is equal to 2/3rds of final salary: OR (b) they reach the age of 65 whichever is the earlier."

[12]The material findings of fact by the Employment Tribunal include the following:

"24. We heard the oral evidence of Mrs Blance. She was extremely co-operative and helpful. She had started as a trainee in the Port Authority in 1990, became a personnel officer in 1993 and a personnel manager in 1999. She had therefore not been there during the 1986 negotiation. In her experience, no-one who has asked to work beyond the age of 62 had ever been turned down … 25. Mr Bosomworth's evidence was that normal retirement age as he understood it was 65 unless he had previously reached the Inland Revenue limit. He referred to three other people who had gone on past the age of 62…. He told us that nobody to his knowledge had been compelled to leave at 62. He explained that he had "cut his cloth" by planning his mortgage some 20 years earlier to be paid off when he was 65. He never altered that "target" because he had no reason to. He also knew of one person after his dismissal who had been allowed to go on past the age of 62. … 26. The evidence of Mr Harland, which we accepted, was very illuminating. He had been a shop steward who along with others had been involved in the 1986 pay negotiations. As in other years, the negotiations were wide-ranging. Mr Beckton would ask the staff side for their "shopping list" of demands. There followed what he described as "toing and froing" of proposals. He confirmed that on 1 May 1986 no agreement was reached and then on 13 May 1986 full time officials were brought in. the most important part of Mr Harland's evidence was that it was not only his own view but that of all other people on the union negotiating side that if there had been the slightest mention of working beyond 62 being nothing more than a 'concession', there would have been no agreement at all . No union negotiating body would give away the right of some of its members to work to 65 without asking those members in very clear terms for their views and 'taking their instructions'. In practice Mr Harland cannot remember anyone being forced to go at 62….Mr Harland also gave evidence that the proposals put forward on 13 May were put to a ballot as an option to retire at 62, but a right if one so wished to remain to 65. That was the package put to the membership, voted on, and accepted which then became the collective agreement governing the individual contract of employment. It is Mr Harland's opinion that Mr Beckton too thought this was being agreed, but as it has been pointed out to us, we have not heard the evidence of Mr Beckton who has retired. 27. When asked by Mr Downey why the terms of the [PCA] had not been queried in the years since 1986, Mr Harland's reply, which we fully accept not only as truthful but as reasonable, was that there was no need to if no employees were being retired compulsorily after the age of 62. The 'agreement' was working in the way in which the trade union officials present at the 1986 [negotiations] had thought it was going to work. Why should they question what appeared to them to be simply brevity in drafting in one document (the [PCA]) which was amplified in other documents (Amendment 3, other memoranda and pension deed) when reality was entirely in accordance with what the staff side expected."

[13]The first and second Applicants produced materially identical letters, each dated 22 January 1998, signed by Mrs Sally Blance (referred to by the Employment Tribunal in paragraph 24 of its Decision quoted above), as Personnel Officer, on notepaper of the Tees and Hartlepool Port Authority Pension Scheme. We quote that sent to the first Applicant:

"Normal Retirement Age As you will reach the Tees and Hartlepool Port Authority Pension Scheme Normal Retirement Age of 62 on 10 June 1998, you are eligible to retire from that date, however you do have the option, Inland Revenue Maximum Limits permitting, to remain in employment up to the age of 65, with no ongoing contribution to the scheme, whilst receiving revaluation of your pension benefits calculated to age 62. Please indicate in writing, as far as you are concerned currently, your intended age of retirement so I may diarise appropriate calculation dates …"

[14]The Tribunal's conclusions in the light of the above are set out in paragraph 30 of the Decision:

"The respondent has not produced any statistical evidence. We are not saying they are under a duty to do so, but there is then no evidence that differs from the information that we have been given by all of the witnesses before us that people retire at a variety of ages depending upon personal circumstances. There are relevant ages at which thresholds of pension entitlement are reached. At 57, an employee can choose to retire and his pension will not be subjected to reductions. At 62, an employee must stop contributing to the scheme, but if he does not draw his pension, i.e. carries on working, it grows in value between 62 and the date it comes into payment. At 65, or earlier attainment of Inland Revenue limits the employee is compelled to take his pension and retire. On the basis of these facts we consider that the reasonable expectation of everybody in Port Authority Employment, on an objective basis, was that they could work to the age of 65 as of right , unless before 65 they reached the Inland Revenue limits."

[15]Mr Downey agrees, and in terms so conceded in the course of argument before us, that as at 25 July 1999 the normal retirement age at the Respondent Authority was 65, or earlier if an employee had by then reached Inland Revenue limits. He relies however on what occurred on, and after, 26 July 1999.

[16]On that date a memo was sent by a Mr Ian Cail on the Respondent's behalf to all Heads of Department, with a request that the contents of such memorandum be communicated to all members of staff. The memorandum read in material part as follows:

" Business Review . Most of you will already be aware that trading conditions in the first quarter of the current financial year have been extremely difficult … It has become clear that the recently announced cost-cutting initiative will need to be supplemented by the introduction of further measures. The Board has given this matter very careful consideration and the steps it is now embarking upon have not been taken lightly… However, current and forecast trading conditions have led us once again to re-examine our business needs and we must now, regrettably, embark upon a major redundancy programme across all sectors of the business … Although discussions will commence immediately on the redundancy programme, the numbers of employees will not be known until after 20 August 1999. … Now that the decision has been made, it is in the interest of both the Company and employees alike that the process is concluded speedily and efficiently. … One further measure which the Company has decided to implement is the withdrawal of the concession whereby certain employees have been permitted to remain in employment beyond normal retirement age. This concession is withdrawn with effect from 1 October 1999. Any employee who has reached the age of 62 by 30 September 1999, will, therefore, automatically retire on that date."

[17]As a result of this letter, as is clear, there were substantial redundancies. The four Applicants however, being over 62, were said not to qualify for redundancy payments as a result of the " withdrawal of the concession ".

[18]The Tribunal did not so conclude. Mr Downey's Notice of Appeal against its Decision rested largely on the following propositions:(i) that the Tribunal erred in concluding that the statements made by Mr Beckton at the Port Council meetings in 1986 had legal effect, and ought to have concluded that they were not incorporated into the terms of the PCA in 1986 or subsequently.

(ii) that no reasonable Tribunal could have concluded that the contractual retirement age was anything other than 62.

(iii) that any conclusion that there was a contractual retirement age of "65 unless Inland Revenue limits were reached" was perverse, and, primarily,

(iv) that the Tribunal failed, in assessing the reasonable expectation of employees as to the normal retirement age, to do so in the light of and after Mr Cail's memorandum of 26 July 1999, namely as at the termination of the Applicants' contract on or about 5 August 1999, as of 30 September 1999.

[19]Mr Carr persuasively submitted, and we conclude, that it is clear (and Mr Downey in the event hardly resisted this proposition) that the parties below, and the Tribunal, all addressed the question of contractual retirement date on the basis that, whatever the position was, it was settled as of May 1986 and did not change between then and 25 July 1999. Mr Downey effectively abandoned his case based upon Clause 3 of the PCA, namely that in some way subsequent PCAs changed the position, even if the arrangements with Mr Beckton were incorporated into the 1986 PCA. In any event we are satisfied that such contention is unarguable. If the "Beckton arrangements" were incorporated into the individual contracts of employment, notwithstanding not being spelt out in terms in writing in the PCA, then the fact that the written PCA was superseded by subsequent PCAs would not prevent those Beckton arrangements continuing to have effect as incorporated into individual contracts of employment, not least because, as was plainly the evidence which the Tribunal accepted, those arrangements continued to be applied.

[20]Addressing therefore the issue of incorporation of the Beckton arrangements in May 1986 and thereafter, the following matters arise:(i) No individual contracts of employment of the four Applicants (or indeed even any samples of such contracts) could be produced, so that the precise words used in order to incorporate collective agreements or arrangements are not available. It was and is however common ground that (at least) the PCA itself was incorporated, and in the absence of any wording to the contrary, it must be clear that collective agreements do, by virtue of s178 of TULRA, include not simply agreements but also " arrangements ". By virtue of s179 such collective agreements (or arrangements) do not have to be in writing: they would simply not be enforceable as between the unions and the employers unless they are in writing (and include an express provision of legal enforceability, not present here). Thus there is Court of Appeal authority ( Marley v Forward Trust Group Ltd

[1986] ICR 891

[1999] IRLR 208

which made clear (in particular at paragraph 19) that agreements/arrangements which are not in writing can similarly be so incorporated.

(ii) Further, in order to be incorporated into the individual contract of employment, custom and practice may be sufficient ( Henry v London General Transport Services Ltd

[2002] ICR 910

, as may be the fact of an employee continuing in employment on the basis of it (as canvassed in Alexander v Standard Telephone and Cables Ltd

[1991] IRLR 286

and as found in Harris v Richard Lawson Autologistics

[2002] ICR 765

). The latter is a case in which an employee's claim failed because he was held to a term negotiated by his shop steward, and at para 78 Kennedy LJ said as follows:

"Revised terms of employment were negotiated with the shop steward, who plainly had authority to negotiate. There was then an interval during which, so far as the employers were concerned, it was reasonable to conclude that the revised terms were adopted by the employees and thereafter the work went on apparently on those terms."

[21]As Counsel for the Applicants pointed out, the most that can be said for Clause 43 of the PCA is that it is a statement that " normal retirement age is 62 years of age ". That is submitted to have been an incorrect statement, in the light of the representations that had been made by Mr Beckton, upon the basis of which the unions agreed with the Respondent and the employees voted in the ballot, informed by the content of Amendment 3 and Mr Beckton's confirmation of it. As is clear from the findings of fact by the Tribunal, all parties thereafter acted upon the basis of Amendment 3, and we have set out in paragraph 15 above Mr Downey's concession as to what the position in fact was as at 25 July 1999.

[22]The question as to whether, in effect, Amendment 3 was incorporated into the individual contracts of employment of the four Applicants is important for the following reason. Mr Downey relies upon Court of Appeal authority that if the normal retirement age is simply an expectation of the employees, and a policy of the employer, then it can be unilaterally changed by the employer with immediate effect . He accepts that this cannot be done if there is a contractual entitlement.

[23]As to the latter proposition, it is plain that an employer cannot change a contractual term unilaterally. This is plain from Robertson and Jackson v British Gas Corporation

[1983] IRLR 302

"It is true that collective agreements such as those in the present case create no legally enforceable obligation between the trade union and the employers. Either side can withdraw. But their terms are in this case incorporated into the individual contracts of employment, and it is only if and when those terms are varied collectively by agreement that the individual contracts of employment will also be varied. If the collective scheme is not varied by agreement, but by some unilateral abrogation or withdrawal or variation to which the other side does not agree, then it seems to me that the individual contracts of employment remain unaffected. This is another way of saying that the terms of the individual contracts are in part to be found in the agreed collective agreements as they exist from time to time, and, if they cease to exist as collective agreements, then the terms, unless expressly varied between the individual and the employer, will remain as they were by reference to the last agreed collective agreement incorporated into the individual contracts."

[24]This position was reiterated by this Appeal Tribunal in Edinburgh Council , per Lord Johnston:

"21. We do not consider that as such it was a discretionary element in the contract giving a right to the employer unilaterally to change the policy or remove the term … 22. … We endorse the view expressed by the employment tribunal that the 1992 change of policy was a unilateral variation of an incorporated term in the respondent's contract, was thus unlawful and left the original term stemming from the 1987 decision incorporated …"

[25]As for the former proposition, this stems from a number of authorities, all relating to the unilateral withdrawal of what were found to be non-contractual and administrative policies relating to retirement age, where contractually the retirement age was lower than had in practice been applied. In the House of Lords decision of Hughes

[1985] IRLR 263

"21. Lord Fraser [in Waite ] also speaks of 'the relevant time' at which to ascertain the reasonable expectation or understanding of employees holding the same position as the claimant if some other age or the statutory ages of 65 for a man and 60 for a woman is to be capable of displacing the contractual retiring age as 'the normal retiring age' within the meaning of [now s109]. The Court of Appeal was unanimously of the opinion, in my view rightly, that under the statute, what Lord Fraser was referring to as 'the relevant time' was the effective date of termination of the claimant's employment, or, to be strictly logical, the punctus temporis immediately before that termination took effect. 22. My Lords, the Court of Appeal was also unanimously of the opinion that the contractual retiring age, i.e. the age at which Mr Hughes and Mr Coy could be compelled to retire, has been throughout their service in Crown employment the age of 60. No other conclusion is possible in view of those provisions of the primary code which I have cited earlier … But there is left to the head of each Government department a discretion to permit a civil servant employed in his Department to postpone the date of his retirement until he attains some higher age. Where as a matter of administrative policy a department decides that for the time being it is in the interests of departmental efficiency that a particular category of employee should … be permitted if they so wish to remain in the employment of the department until they attain some specified age higher than 60, and such decision is communicated … employees in that category have a reasonable expectation that the higher age so specified has replaced the age of 60 as their 'normal retiring age' … 23. But this remains the case only so long as the departmental circular announcing that administrative policy to the employees affected by it remains in force. Administrative policies may change with changing circumstances, including changes in the political complexion of governments. The liberty to make such changes is something that is inherent in our constitutional form of government. When a change in administrative policy takes place and is communicated in a departmental circular to, among others, those employees in the category whose age at which they would be compulsorily retired was stated in the previous circular to be a higher age than 60 years, any reasonable expectations that may have been aroused in them by a previous circular are destroyed and are replaced by such other reasonable expectations as to the earliest date at which they can be compelled to retire if the administrative policy announced in the new circular is applied to them."

[26]In Bratko v Beloit Walmsley Ltd

[1995] IRLR 629

[27]As can be seen, both of these unilateral changes by employers were given with a certain degree of notice. Effectively no notice whatever was given by the Respondent Authority in our case. However in the Court of Appeal decision in Brooks v British Telecommunications plc

[1992] IRLR 66

, no such notice was said to be required in relation to the removal of the reasonable expectation of employees and hence the unilateral change of a normal retiring age.

(i) Per Butler Sloss LJ at para 35:

"It is agreed in the present case that the contractual retiring age of all the appellants was 60, and consequently the normal retiring would be 60, unless rebutted by evidence. There was no staging of retirement as in Hughes . It is open to an employer to change his policy for the normal retiring age, and so long as it does not breach the contractual retiring age, such a policy can change overnight . [Our underlining.] It requires, of course, properly to be communicated to the employees affected before it can have effect, but, once communicated, I see no reason why the effect should not be immediate. When it takes effect it consequently alters the previous expectation that the group had of being retained in employment until a higher age." (ii) Per Sir Christopher Slade at para 45: "

[28]We are plainly bound by the Court of Appeal authority of Brooks , such that, if the retirement age in accordance with Amendment 3 was not a contractual entitlement of the Applicants, it could be unilaterally changed by the Respondent with immediate effect, but we are unhappy at such a situation and would hope that it could be reconsidered:(i) Even if such retirement age was a 'concession' and not contractual, it had lasted, and, on the evidence, uniformly applied, for 17 years and the Applicants (certainly, on the finding of the Tribunal, Mr Bosomworth) had acted to their detriment and acquired legitimate expectations, and one would have expected that, at the very least by reference to the withdrawal of waiver, acquiescence or estoppel in accordance with the principles of High Trees ( Central London Property Trust Ltd v High Trees House

[1947] KB 130

) or even the earlier doctrine in Hughes v Metropolitan Railway

[1877] 2 App Cas 439

, reasonable notice of withdrawal of such concession would be expected.

(ii) It would appear to offend against the ever more established principle that the implied obligation of trust and confidence in a contract of employment is both fundamental and reciprocal.

(iii) In any event it would appear to be an unacceptable way round the law and practice of redundancy and unfair dismissal, in respect of those with accrued expectations within sight of the onset of a planned retirement. It may be one thing for government departments, as in Hughes , not to be fettered from changing their administrative policies: it may even be appropriate for a business to make a policy change, in relation to changing the retirement age as part of business planning or recruitment policy. But what occurred here would appear to be nothing more than the most economic approach to a redundancy position: for the immediate lowering of the retirement age would enable those over 62 to be make immediately redundant without compensation. It is in that context that the giving of reasonable notice would appear to us to be a significant matter. If, for example, the unilateral 'change of policy' had been staged, or six or nine months or more notice of such change had been given, as in a case like Hughes or Bratko , then it would seem that the Respondent could not have achieved the intended effect of avoiding any payment of compensation. Some payment of damages for breach of contract would, it seems to us, have followed if they had then sought to terminate the Applicants' employment immediately. Further and more significantly, given that the 'normal retirement age' would have on that basis continued until the expiry of the reasonable period of notice, it would at least be highly arguable that if their employment were still terminated immediately the Applicants would have entitlement pursuant to s109 because at the 'punctus temporis' immediately prior to such termination the normal retirement age would not yet have altered.

[29]However we turn to consider whether the Amendment 3 retirement date was contractual as at 25 July 1999, so that in any event the unilateral change could have no effect, in accordance with the authorities referred to in paragraphs 23 and 24 above. The Tribunal's conclusions are and, as will appear, are unashamedly, open-ended."49. We are cautious of giving the appearance of indecision. However, where all roads lead to the same place there is no shame in a Tribunal expressing alternative routes to its conclusions.

50. The difficult point to decide is whether there is a contractual retirement age, as Mr Legard suggests, which is '65 or such earlier time at which an employee reaches the Inland Revenue limit'. Whether there is a contract depends on whether 'consensus ad idem' was reached. This basic rule remains whether it be a collective bargain incorporated into the individual contracts or a personally negotiated one-to-one contract. We do not know , because we have not heard the evidence of Mr Beckton, what his underlying intention was on behalf of the Respondent. We are absolutely convinced that it was not the intention not only of the four Applicants before us, but not the intention of anybody on the union negotiating side in 1986 that there should be compulsory retirement of people below the age of 65 unless the Inland Revenue limit had been reached. On that basis, if there was a failure to have a meeting of minds in 1986, there was no underlying contractual retirement age of 62 agreed then. On the findings we have made, there is no normal retirement age either because all that we have is a flurry of retirements at various ages. There being neither a contractual nor otherwise normal retirement age the statutory age of 65 would apply. On the wording of section 109 and section 156, these Applicants therefore have the right to complain of unfair dismissal and the right to claim a redundancy payment. The alternative view is that if no different age of 62 was agreed in 1986, the previous contractual age remains – again 65. The further alternative applies if Mr Beckton was at one with the unions. Then there was a contractual age of "65 unless Inland Revenue limits were reached" just as Mr Legard argues. In that event, none of these applicants had reached 65 or Inland Revenue limits."

[30]It is apparent that the Tribunal reached three separate conclusions:(i) Option 1 : No contractual age agreed, therefore the statutory age of 65 applied.

(ii) Option 2 : The pre-1986 contractual age of 65 continued after 1986.

(iii) Option 3 : The Amendment 3 retirement age was contractual.

[31]None of these options was proposed or supported by Mr Downey on behalf of the Respondent, whose case always was that the contractual retirement age after April 1986 was 62 (but supplanted by the non-contractual 'concession'). On the analysis which we have set out above, only Options 2 and 3 would avail the Applicants, i.e. that there was a contractual retirement age which could not be unilaterally reduced to 62: Option 1, no contractual retirement age (but simply a statutory one) would enable the Brooks principle of a unilateral change of policy in July 1999 to prevail. It was only in his submissions in reply before us that Mr Downey for the first time sought to adopt the conclusion of the Tribunal in Option 1, and assert that, on that basis, the Respondent succeeded, by virtue of the Cail memorandum.

[32]Is it open to Mr Downey to run that argument on appeal? It does not appear as though he ran it below. Indeed on the face of it it could be said that Mr Downey conceded the point below. We turn to the paragraphs of the Tribunal Decision in which the question of the effect of the Cail memorandum was canvassed: "42. Mr Downey then went on to submit that if there was a contractual retirement age the burden is on the applicant to show that it is not the normal retirement age i.e. that is has been abandoned or replaced by a higher or lower age. We tentatively agree with that submission, although we share Mr Legard's reservations about the burden of proof … Further, if there is a contractual retirement age of 62, Mr Downey submitted that different retirement ages being implemented at various times do not change the fact that "contractual" retirement age may remain synonymous with "normal" retirement age. In theory, we agree with that submission. Mr Downey then says that reasonable expectation of a normal retirement age has to be judged as at the effective date of termination and at that date, the policy of the Respondent had been set out in [July] in Mr Cail's memorandum, so that no one could have had a reasonable expectation after that time that the retirement age would be anything other than 62. Again we agree with him in theory provided that Mr Cail's memorandum is not, and cannot reasonably be viewed as, a departure from the employer's contractual obligations. If it is so viewed it is not, as Mr Downey suggests, a change of policy by the employer. We also agree with him that when one looks at reasonable expectation it is the objective consideration of employees in the group rather than for example the subjective views of employees of particular ages. As we have already indicated, the objective reasonable expectation of all employees was as the applicants argue. 43. Further we agree that where there is a contractual retirement age, the policy as to whether or not that age should be extended can be changed effectively with immediate effect. However, where there is no contractual retirement age, Mr Downey agreed with us that it cannot be unilaterally imposed. " [Our underlining.]

[33]Mr Downey does not accept that he made that concession. It may well be that the existence of that concession, or the Tribunal's belief in it, is what caused or permitted the Tribunal to conclude that Option 1 led to the same result as Options 2 and 3 (" all roads lead to the same place "). Mr Downey submits that if he made such concession, he should be freed from it, and, if he did not, there is a misunderstanding which should now be corrected. It has to be pointed out however that no express mention of this appears in Mr Downey's Notice of Appeal, either by way of challenge to Paragraph 43 of the Decision or, indeed, by way of what he sought to do in his oral reply submissions, namely building upon the Tribunal's conclusion as to Option 1. This is arguably therefore a situation in which an Employment Appeal Tribunal would not in the light of Kumchyk v Derbyshire County Council

[1978] ICR 1116

permit a point to be argued which was not argued (and may even have been conceded) below, and/or in which in any event an argument sought to be made on appeal was not contained in the Notice of Appeal (particularly when it involves the withdrawal of an apparent concession which seems to have had significant consequences in the Tribunal's Decision). Neither of paragraphs 6(b) nor 6(d), which are the closest that the Notice of Appeal comes to address this point, asserts that the Employment Tribunal having found (as per Option 1) that there was no contractual retirement date prior to July 1999 (contrary to the submissions of both the Applicants and the Respondent) ought then to have found that the Cail memorandum unilaterally imposed one, as opposed (on Mr Downey's case) to re-imposing a previous contractual age of 62. Instead paragraph 6(b) of the Notice of appeal positively asserts Option 1 to be perverse (" The Tribunal's conclusion that there was no contractual retirement age was perverse ").

[34]If such were permitted to be argued on appeal, the Applicants' Counsel could not realistically argue that they would suffer any prejudice, save that if the matter had expressly featured in a Notice of Appeal they would no doubt have put in a Respondent's Notice in order to support Option 3 as the only available conclusion for the Tribunal.

[35]We think it probable that the Tribunal was misled into including Option 1 by the content of paragraph 43 of its Decision, which may result from a concession consciously or unconsciously made by Mr Downey, and certainly appears to have followed from the fact that Mr Downey rested his case below and, until his reply, before us, on the basis that the contractual retirement age was 62 at all times after 1986. This is clear from paragraph 44 of the Decision:

"He concluded his submissions by saying that all that happened in this case was that in July the respondents reverted to enforcing their strict legal rights, which they had since 1986 by contract, to compel workers to retire at the age of 62."

"31. Mr Downey argued in his submissions that as a matter of fact we should find that Mr Beckton on behalf of the Respondents made it clear in 1986 that the employees of the Port Authority were being asked to give up the right to work to 65 in exchange for other benefits. We disagree entirely. Viewed as a whole his words, written and spoken, sent out the message for which the Applicants have argued."

[36]It is in our judgment clear beyond doubt on the findings of fact of the Tribunal, which we have set out above, and without any need for Mr Beckton to have been called (the Respondent could in any event have done so) that Amendment 3 was agreed collectively, voted upon as part of the collective agreement by the workforce, and incorporated into the individual contracts of employment as a result: had it been necessary we would also have found that it was incorporated by virtue of the established and agreed custom and practice and the fact that the employees continued in employment on the basis of it. Both sides accept that the PCA was incorporated into the individual contracts of employment: it was however the full collective agreement, i.e. including Amendment 3 (which supplemented or overrode the statement in Clause 43) which was incorporated. We are satisfied that the Employment Tribunal's decision can be justified on the basis of Option 3, which it found as one of its three options (and, if necessary, on the basis of Option 2 which the Tribunal also found (but we would not have done)). Insofar as there was an error by the Tribunal in its consideration of and conclusions as to the effect of Option 1, we are entirely satisfied that there is no purpose in remitting the matter for further consideration by the Employment Tribunal (this or any other), because on the basis of the findings of fact of this Tribunal and the correct application of the law, no other conclusion could be reached than that as at 25 July 1999 not only the normal but also the contractual retirement age was 65, or earlier if Inland Revenue limits had not been reached. In any event, and if necessary, we would not have permitted the amendment of the Notice of Appeal which we are satisfied it would have been necessary for Mr Downey to have sought in order to run his reply point.

[37]Accordingly we dismiss this appeal.