Normal retirement age

The Court of Appeal has addressed the question of whether an employee who holds a unique position in an organisation has a "normal" retirement age in the context of making a claim for unfair dismissal. In the case D Wall -v- The British Compressed Air Society, the Employment Appeal Tribunal (EAT) had found, contrary to the judgements of earlier EAT decisions, that Mr. Wall had a normal retirement age of 70, even though he was a "unique" employee, i.e. there were no other employees with whom his situation could be compared. In a majority decision given on 10 December 2003, the Court of Appeal dismissed the employer's appeal against the finding of the EAT.

The upper age limit for making a claim for unfair dismissal is set out in section 109 of the Employment Rights Act 1996:

"…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 sixty-five"

The term "position" is defined as

"the following matters taken as a whole -
(a) his status as an employee,
(b) the nature of his work, and
(c) his terms and conditions of employment"

The EAT had decided that, in the case of a unique employee, the retirement age of 70, as defined in Mr. Wall's contract, was his "normal" retiring age. This contradicted earlier EAT precedents that a unique employee cannot be said to have a "normal" retiring age as no comparisons can be made with other employees holding the same position.

Where there are a number of employees holding the same position, an earlier Court of Appeal decision (Nothman -v- Barnet London Borough County Council) decided that

• the normal retiring age would be presumed to be the contractual retiring age, but
• that presumption can be rebutted if, in practice, they are regularly retired at a definite higher age, in which case that higher age becomes the group's normal retiring age; if not, the contractual retiring age may simply have to be regarded as abandoned
• the questions to be asked in all such cases are: "What would be the reasonable expectation or understanding of the employees in the group?", and "At what age could they reasonably expect to be compelled to retire?"

The Court of Appeal held that these same questions may be asked in the case of a unique employee. Otherwise, there would be discrimination against the unique employee which would not occur if there were two employees in the same position. The decision gave the following example:

"Assume that only two employees hold the same position within an undertaking, each with a contractual retiring age of 70. The first is dismissed at the age of 69 whilst the other, still aged only 66, remains at work. It could hardly be suggested that the one who is dismissed has no normal retiring age (presumed to be the contractual retiring age of 70) although, of course, no one would yet have retired at 70. Assume then that the second employee were himself later dismissed, say at the age of 68. Surely he too would have had a normal retiring age of 70; it cannot matter that no-one in the event ever came to be employed that long. Why, therefore, should it matter that there was only one such employee? For him the expectation would be that he would remain in his employment until his contractual retirement age."
(Source: www.courtservice.gov.uk/judgmentsfiles/j2144/wall.htm )
...back to 19 December 2003