Following the Court of Appeal’s decision in the case of Johns v Solent all tribunal claims challenging a compulsory retirement will be stayed pending the outcome of the ‘Heyday’ case.
The Heyday case
In 2006, Age Concern (through its campaigning organisation Heyday) brought judicial review proceedings against the Government challenging the retirement exception contained in the Age Regulations. This exception allows employers to force employees who are aged 65 (or older) to retire without risking claims of age discrimination or unfair dismissal, so long as they follow certain procedures when dismissing. Heyday claims that this exception amounts to direct age discrimination as the EU Directive on which the Regulations are based does not allow it. In 2007, the High Court decided that before making its decision it would refer certain questions to the European Court of Justice for a preliminary ruling. Click here for our report on the Heyday case. In the meantime, some employees aged 65 and over who have been forced to retire have brought tribunal claims against their employers. As a result of the Court of Appeal’s decision in the case of Johns v Solent all such tribunal claims will be stayed pending the outcome of the Heyday case.
Johns v Solent
Mrs Johns was forced to retire by Solent SD Ltd when she was aged 70. She subsequently brought tribunal proceedings against Solent claiming both unfair dismissal and age discrimination.
Solent made an application to the tribunal asking for Mrs Johns’ claim to be struck out. Solent argued that the Regulations allowed it to required Mrs Johns to retire, that it had complied with the dismissal procedures contained in the Regulations and that therefore Mrs Johns’ claim was bound to fail. Mrs Johns accepted that under the current Regulations her claim was bound to fail. However, she argued that the proceedings should be stayed pending the outcome of the Heyday case.
Solent objected to the stay. It referred to the opinion of the Advocate General in the case of Felix Palacios de la Villa v Cortefiel Servicios SA, in which the Spanish government’s adoption of a compulsory retirement age of 65 was challenged. In this case, the Advocate General gave the view that the default retirement age was justified (the ECJ later went on to made the same finding – click here for our report on this case).
The Tribunal Chairman refused the application for a stay and struck out the proceedings. In particular, he found that the issues in Palacios were sufficiently close to those in the Heyday case for it to be likely that Heyday’s challenge to the default retirement age would fail.
Mrs Johns appealed to the Employment Appeal Tribunal (EAT) who upheld her appeal and allowed her case to be stayed.
Solent appealed to the Court of Appeal who upheld the decision of the EAT and allowed the case to be stayed. It found that it was wrong for the Tribunal Chairman to base his decision on unwarranted speculation about the outcome of the Heyday case. In its view, the EAT was entirely justified in concluding that it is possible the Heyday may succeed and that if it does Mrs Johns’ case has a reasonable prospect of success. The Court of Appeal also balanced the prejudice to Solent in the claim being stayed for a considerable period of time against the prejudice to Mrs Johns of having her claim struck out. It concluded that the balance of prejudice weighed heavily in favour of staying the claims.
After the EAT’s decision in Johns v Solent, the President of the Employment Tribunals issued a Practice Direction to the effect that all tribunal claims challenging compulsory retirement should be stayed until the outcome of the Heyday case. In light of the Court of Appeal’s decision it is now certain that this Practice Direction will remain in force.
This means some uncertainty for employers. If the Heyday challenge is successful, it could mean that employers will not longer be allowed to require employees to retire at the age of 65 (or above). Of even more concern to employers, is that it could also mean that retirements that have already been made by employers, in good faith and in accordance with the current Age Regulations, could be found to be unfair and age discriminatory. Further, this uncertainty will continue for some time. The Advocate General has only just given his opinion on the questions referred to the ECJ and the ECJ itself is only expected to give its ruling in early 2009. The case will then be passed back the High Court to decide in light of the ECJ’s ruling. Therefore it seems unlikely the case will be finally determined until the second half of 2009 at the earliest.
Johns -v- Solent SD Limited  EWCA Civ 790