A curious judgment from the Employment Appeal Tribunal (EAT) this week. In Bailey v R&R Plant, the EAT interpreted the statutory retirement procedure creatively to find that an employee had been unfairly dismissed. But in doing so it set down an unfortunate precedent with potentially serious implications for employers who currently have employees under notice of retirement.
The case considers the requirements of the default retirement procedure introduced by the Employment Equality (Age) Regulations 2006. Under the Regulations, employers could fairly and lawfully retire employees at the age of 65 so long as they followed the steps set out in Schedule 6. These included notifying the employee of his or her intended retirement, and informing him or her of his or her right to request not to retire. If the employee then made a valid request, the employer would have to hold a meeting and decide whether the retirement should go ahead.
Why a ‘valid’ request? Surely the employee either makes a request or not? Well, the statutory retirement procedure left nothing to chance. Para 5(3) of Schedule 6 stated that a request had to be made in writing, and had to state that it was made ‘under this paragraph’. This meant that the employee had to say, in so many words, that he or she was invoking Para 5 of Schedule 6 to the Age Regulations. This has always seemed a strange requirement. There is an obvious purpose to requiring that a request be in writing: it leaves a paper trail in case any questions arise over compliance. But how many employees making a request would be aware that they had to cite chapter and verse when making it? And how many employers, receiving a written request not to retire, would need chapter and verse cited to them before they understood what it meant? The answer to both questions, surely, is ‘hardly any’.
Nonetheless, the requirement stood, and was applied – in Holmes v Active Sensors Ltd (Case No.3100214/07), an employment tribunal decided that an employee had not made a valid request when he didn’t refer to para 5 in his request letter. The upshot was that his employer wasn’t obliged to consider the request. The Bailey case, decided this week, involved similar circumstances. Mr Bailey also made no mention of para 5 in his request letter. An employment tribunal applied the same reasoning as in Holmes and rejected Mr Bailey’s claim of unfair dismissal. On appeal, though, the EAT had other ideas.
The EAT didn’t disturb the tribunal’s finding that Mr Bailey’s request letter was invalid – it took the literal approach in Holmes to be correct. But it went on to decide that the employer should have notified Mr Bailey of his obligation to mention para 5 in his request letter. It is the employer who kicks off the statutory retirement procedure by fulfilling his initial duty to inform the employee of his intended retirement and his right to request not to retire. The EAT decided that this included an implied duty to inform the employee of the essential conditions for a valid request to be made. The result, then, was that although Mr Bailey hadn’t complied with his duties under the Regulations, nor had the employer. The resulting dismissal was therefore unfair.
This is a striking outcome. It is generally accepted that the requirement on the employee to mention para 5 in the request letter is unnecessarily burdensome. It seems that His Honour Judge Richardson, who presided over the EAT, was trying to ensure that a deserving claimant did not go away empty-handed simply because of a technicality. But it seems harsh to do that by creating a new technicality to trip up the employer.
The statutory retirement procedure was repealed last month and so the case is of limited significance for the future. And that surely featured in HHJ Richardson’s thinking when setting a precedent with the potential for such inequity. But there will be many employers who have issued notices of retirement in the run-up to the repeal of the retirement procedure whose notices – on this authority – are invalid. There is still a substantial potential for claims on the back of this judgment.
This is what happens when Regulations are unduly prescriptive – tribunals (quite properly) apply them literally, absurdities arise, and judges try to remedy the absurdities by creating new ones. Bearing that in mind, it was cheering to note that the consultation on extending the right to request flexible working, announced this week, proposes replacing the current formulaic procedure for such requests with a code of practice on handling requests reasonably. It’s only a shame such enlightened thinking did not come to the Government sooner.