Verner, R (on the application of) v Derby City Council

Where a teacher voluntarily applies for and accepts ill-health retirement benefits on the ground of permanent incapacity, the employment may already have ended by resignation or by operation of law. The employer is therefore not necessarily required to dismiss the teacher under contractual sick-leave provisions.

Regulation 7 of the Education (Teachers’ Qualifications and Health Standards) (England) Regulations 1999 does not impose a public-law duty on the employer to serve a dismissal notice in those circumstances. The claims were dismissed.

Three teachers brought test-case applications for judicial review against their respective employers. Each had been employed under the Burgundy Book, had exhausted sick-pay entitlement, and had voluntarily applied for and accepted ill-health retirement benefits under the Teachers’ Pensions Regulations 1997 on the basis of permanent incapacity.

The teachers contended that Regulation 7 of the Education (Teachers’ Qualifications and Health Standards) (England) Regulations 1999 imposed a public-law duty on the employer to dismiss them, thereby engaging the Burgundy Book provision for salary during a notice period. The employers argued that employment had already ended by resignation, operation of law or frustration.

1. Claims dismissed. Permission was granted in the Sheppard and Ridley cases and had already been granted in Verner. The court refused the mandatory orders and declarations sought.
2. On the proper reading of Healey, a teacher who voluntarily applies for ill-health retirement, whose application is accepted, and who accepts the resulting benefits is to be treated as having given notice of an intention to retire when the benefits become payable. The teachers’ employment had therefore ended by resignation, without any need for an employer’s dismissal notice.
3. Alternatively, Regulation 7 could operate by law where incapacity had become incontestable. Once the teachers had applied for and obtained benefits, the employers had been informed, and no contrary view of incapacity had been maintained, it was clear that the teachers lacked the capacity required by Regulation 7.
4. The technical doctrine of frustration did not apply. Permanent incapacity alone did not frustrate the contracts because Clause 6.1 contemplated continued employment during incapacity unless notice was served.
5. Even assuming that employment continued, Regulation 7 did not impose a public-law duty on the employer to dismiss. The regulation did not adequately specify when such a duty arose, upon whom it fell, how it was to be exercised, or what procedural safeguards applied. Its purpose could instead include a power, or automatic termination by operation of law where incapacity was agreed or incontestable.
6. Had such a duty existed, judicial review would have been an appropriate remedy because each teacher would have been specially affected. Leave to appeal was granted in all three cases.

These were first-instance test cases. The court dismissed all three judicial review claims. Permission had previously been granted in Verner; permission was granted and the claims then dismissed in Sheppard and Ridley. Leave to appeal was granted in each case.