Veitch Penny LLP - Exeter | Crediton, Devon

Case

Johns v Solent SD Ltd
Employment Appeal Tribunal – 30 October 2007

Issues

(1) The Employment Equality (Age) Regulations 2006 (“the Regulations”)
(2) The default retirement age
(3) EC Equal Treatment Framework Directive (“the Directive”)

Facts

Mrs Johns had reached the age of 65 years. Her employer followed the procedure for a fair retirement as set out in the Regulations and Mrs Johns was subsequently dismissed. Mrs Johns accepted that this process had been followed but made a claim against her employer arguing that her dismissal was unfair and it constituted age discrimination against her.

At first instance, Solent argued that the claim had no reasonable prospect of success and accordingly her claim should be struck out. In response, Mrs Johns sought a stay of her claim pending the result of the judicial review proceedings made by the Heyday organisation against Regulation 30 of the Regulations, which had been referred to the European Court of Justice (ECJ), arguing that if that challenge was successful (and a default retirement age was found to be unlawful) her claim did have a reasonable prospect of success. One of the issues raised relates to the provisions in the Regulation allowing for a fair retirement dismissal procedure at an employee’s default retirement age. The Tribunal refused to stay her claim and her claim was struck out. Mrs Johns appealed the matter to the Employment Appeal Tribunal (EAT). The EAT considered the circumstances, the Regulations and the Spanish case of Palacios de la Villa v Cortefiel Servicios SA. In this case, the ECJ decided that the compulsory retirement ages were contrary to the Directive, but that the provisions could be justified. However, this case was decided on its own facts and does not rule out success in the Heyday case.

Decision

The EAT overturned the Tribunal’s decision to strike out Mrs Johns’ case and has granted a stay pending the Heyday decision. As a consequence, the president of the Employment Tribunals, HHJ Meeran has handed down a practice direction staying all current and future Tribunal claims involving an allegation that Regulation 30 of the Regulations, pending the Heyday decision. Permission to appeal was also granted.

Comments

This stay does provide a dilemma for employers who are using the fair retirement process to terminate the employment of employees reaching the age of 65. Unfortunately resolution of this issue is likely to be some time in coming as the Heyday case has to be heard by the European Court of Justice and judgment is not expected until early 2009. If the challenge is successful then the provisions of the Regulations which are not compliant would be repealed with retrospective effect on public sector employers as the Directive has direct effect in the public sector. There is also a risk for private sector employers although they should be entitled to rely on the current provisions of the Regulations until such time as they are amended, but an element of uncertainty does remain.


Rachel Billen – Associate Solicitor, Commercial Department at Veitch Penny.
Tel: 01392 278381, Fax: 01392 410247, Email: This e-mail address is being protected from spambots. You need JavaScript enabled to view it

This Employment Law Update does not constitute legal or other professional advice and should not be relied on as such. You should take specific advice regarding your circumstances before taking any action based on the information contained within this Update.