Legal opinion: Are employers unknowingly at risk of tribunal claims under the transitional retirement provisions?

The Employment Equality (Age) Regulations 2006 (“the Regulations”) were repealed on 6 April 2011, meaning that retirement could no longer be a potentially fair reason for dismissal. Transitional provisions are in operation in respect of retirements where notifications were given before 6 April 2011.

The case of Bailey v R&R Plant (Peterborough) Ltd UKEAT/0370/10 identified a potential problem in respect of retirement notifications that could have implications for many employers that gave employees notice of their retirement before the repeal of the Regulations. Jonathan Bruck of IBB Solicitors explains.

Notification of the right to work beyond retirement

Mr Bailey, an employee, brought unsuccessful claims for unfair dismissal, age discrimination and wrongful dismissal in the employment tribunal. He appealed to the Employment Appeal Tribunal (EAT) in respect of his claim for unfair dismissal, arguing that his employer had failed in its duty to notify him correctly of his right to work beyond retirement.

Under para.2(1) of sch.6 to the Regulations, it appears that all that is required of an employer in order to comply with the Regulations is to put an employee on notice of the right to make a request to work beyond retirement age and to state the intended retirement date. On a strict reading of the Regulations, the employer need go no further. The EAT disagreed.

The EAT referred to para.5(3) of sch.6 to the Regulations, which sets out how an employee should make his or her request to work beyond the retirement date. It states that “a request must be made in writing and state that it was made under this paragraph”. The EAT held that the wording of this paragraph was clear and that any request by an employee to work beyond the retirement date should expressly state that the request is made in accordance with para.5(3).

This was troubling for the EAT as it quite rightly pointed out that most employees would not be aware of this requirement (to include the specific reference to the Regulations in their request to work beyond retirement age) unless they were alerted to it in some way. The EAT held that an employee’s attention should be clearly drawn to the requirement and concluded that the intention of Parliament was for the employer to set this out within its letter notifying the employee of the retirement date, notwithstanding that there was no requirement to do so in the Regulations.

Retirement notices could be ineffective

As a result of this judgment, all notices of retirement that did not state the specific paragraph of the Regulations under which the employee could appeal would now appear to be ineffective. It is understandable that the EAT would want to correct what may be a drafting error in the legislation as it could surely not have been the intention of Parliament to create such an onerous obligation on the employee. However, the way in which the EAT has gone about correcting this anomaly appears to be excessive to say the least, with employers that have previously served notices of retirement now being told that these notices could be ineffective.

The risk of unfair dismissal and age discrimination claims

This issue has been complicated by the abolition of the retirement provisions and opens up the possibility of a large volume of employment law claims for both unfair dismissal and age discrimination where employers have proceeded with retirement of employees oblivious to this issue. Prior to 6 April 2011, it was possible to re-serve and rectify a defective notification, but this is no longer possible.

The judgment in Bailey was appealed by the Respondent and is due to be heard by the Court of Appeal on 7 March 2012. As most retirements under the transitional provisions have now taken effect, the impact of the decision will only be short term. However, the Court of Appeal’s judgment in Bailey will certainly affect the numerous claims submitted on the back of the Bailey EAT judgment (and which are currently stayed awaiting the Court of Appeal decision). It will be interesting to see how the Court of Appeal will decide this issue.

Jonathan Bruck, senior solicitor, IBB Solicitors

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