The Court of Appeal handed down judgment this week in the case of R&R Plant Hire (Peterborough) Ltd v Bailey, ruling in favour of the employee. The decision is not only a win for Mr Bailey; it is also a boon for an inestimable number of employees who will suddenly find themselves in possession of a tribunal claim they cannot lose.

The appeal concerned a claim brought in the employment tribunal by Bailey against his employer, R&R Plant Hire. In January 2009, Mr Bailey was due to reach the age of 65. His employer wanted to retire him on that day in reliance on the default retirement age provisions then in force, and contained in the Employment Rights Act 1996 (the ERA 1996) and in the Employment Equality (Age) Regulations 2006 (the age regulations) (now repealed).

Section 98ZG of the ERA 1996 (now also repealed) provided that, where an employee who was at or over the age of 65 was dismissed, and the reason for that dismissal was retirement, the dismissal would only be unfair if the employer failed to comply with the procedural requirements contained in paragraphs 4, 6, 7 and 8 of schedule 6 to the age regulations. The issue for the Court of Appeal was whether R&R Plant Hire had complied with its obligation to notify Bailey of its intention to retire him in accordance with paragraph 2(1) of schedule 6. If it did, the dismissal would be fair because paragraphs 4, and 6 to 8 would have been complied with. If it did not, the dismissal would be unfair because paragraph 4 was not complied with. Paragraph 4 required an employer who had not complied with paragraph 2(1) to give the employee notice of intended retirement not less than 14 days before the intended date of retirement. Such a notice had not been given by R&R Plant Hire.

The employment tribunal held that R&R Plant Hire had complied with paragraph 2(1); the EAT and Court of Appeal both disagreed.

Paragraph 2(1) provided: ‘An employer who intends to retire an employee has a duty to notify the employee in writing of: (a) the employee's right to make a request; and (b) the date on which he intends the employee to retire, not more than one year and not less than six months before that date.’

There was no issue in this case about the date of retirement. Rather, the issue was whether R&R Plant Hire had complied with its duty to notify Bailey of his right to make a request.

The Employment Appeal Tribunal held that paragraph 2(1)(a) required the employer to ‘inform the employee of the conditions which are essential if a valid request is to be made’. R&R Plant Hire appealed on the basis that this decision imposed a gloss on the clear wording of the paragraph, and required the employer to tell the employee of the technical requirements for making a request in a way not envisaged by the paragraph.

Mr Galbraith-Marten, appearing in the Court of Appeal for Bailey, made no attempt in his submissions to support the exact wording of the EAT decision. Instead, as noted in the judgment of the court, he submitted that the plain and ordinary meaning of paragraph 2(1) imposed a duty on the employer to tell the employee that he had a right to make a request under paragraph 5 of schedule 6. This, he said, was because the word ‘request’ was defined in paragraph 1(1) of schedule 6 to mean ‘a request made under paragraph 5’.

Dame Janet Smith, giving the judgment of the court, agreed. The court held that paragraph 2(1), when read in conjunction with the interpretations section, require the employer to have notified the employee ‘that he has a right to make a request not to retire pursuant to paragraph 5 of the [age regulations]’. Dame Smith expressed the view that the statutory procedures conferred a benefit on both the employer and employee. For the employer, compliance with the procedures provided immunity from a claim for unfair dismissal. For the employee, compliance provided an opportunity to require the employer to consider keeping him on after the default retirement age. On that basis, she considered it important ‘that the employee should be told that the employer is invoking a statutory procedure and not merely writing to terminate the employment’.

She further stated that ‘once the employee has been told of his statutory right to make a request, it can properly be left to him to find out how to go about making it’.

R&R Plant Hire wrote to Bailey six months before his 65th birthday. The letter said: ‘As your employer and under current legislation we are required to write to you six months in advance of your 65th birthday to formally inform you that when you reach 65 years of age you have to retire from full-time work. Should you wish to continue employment beyond this date you are required to make this application to the company in writing.’

Clearly, this notice does not comply with the judgment of the Court of Appeal. However, it did notify Bailey of the existence of statutory procedures. This goes somewhat against Dame Smith's reasoning that an employee must be specifically told by his employer of his right to make a request under paragraph 5 of schedule 6 if his attention is to be drawn to that statutory right. In fact, Mr Bailey was put on notice by his employer that current legislation applied to the situation and that it imposed certain obligations on both him and his employer. Mr Bailey could have sought legal advice had he wished.

The difficulty in this case lay primarily in the drafting of the age regulations, a point recognised by all judges at the Court of Appeal hearing. The literal wording of paragraph 2(1) simply requires the employer to notify the employee of his ‘right to make a request’; there is absolutely no further guidance as to how he ought to go about doing so. Employees who were issued with notices which did not specifically mention the age regulations may have been in the dark about their existence.

However, equally, employers who were aware of them were nevertheless, until today, completely in the dark about what they had to do to comply with them. In giving the judgment of the court, Dame Smith expressed her ‘satisfaction that this unnecessarily complex piece of legislation is no longer on the statute books’. I cannot but agree.

The implication of the decision for employers and employees depends on the stage in the process of compulsory retirement they find themselves.

Employers who retired an employee within the last three months but who failed to comply with paragraph 2(1) or paragraph 4 are likely to fail in any claim brought against them.

Employers who retired an employee earlier than three months ago and who failed to comply with paragraph 2(1) or paragraph 4, may find themselves defending an out-of-time tribunal application. It remains to be seen how the employment tribunal will deal with such claims. It can safely be assumed that there will be a lot of them.

Employers who gave notice which does not comply with paragraph 2(1) or 4, but who have not yet dismissed their employee, may be advised to reconsider doing so. The last date that an employee given 12 months' notice of retirement can be retired is 4 April 2012. Employers intending to dismiss an employee on that date cannot now comply with paragraph 4 in time. For those who choose to go ahead with the dismissal, a compromise agreement may be advisable.

Employment lawyers should be prepared for a flurry of enquiries from concerned employers and employees who have heard about this decision and want advice on how it affects them.

Kim Hurley is a solicitor at Fraser Dawbarns in Wisbech, Cambridgeshire