Foster, R (on the application of) v Eastbourne Borough Council

The power to award credited pension years under the Local Government (Early Termination of Employment) (Discretionary Compensation) (England and Wales) Regulations 2000 arises only where the statutory gateway conditions are genuinely satisfied. The employee must be at least 50 and dismissed by reason of redundancy or in the interests of the authority’s efficient exercise of its functions. The compensatory purpose of the power limits any award to the relevant loss. An artificial and unlawful extension of employment, designed to bring an employee within the age threshold, cannot be used to bypass that statutory limit. In such circumstances an award would be unlawful and irrational, so the authority is not required to reconsider its discretion.

The claimant, a former director of environmental services employed by Eastbourne Borough Council, challenged the Council’s refusal to award him credited pension years under regulation 8 of the Local Government (Early Termination of Employment) (Discretionary Compensation) (England and Wales) Regulations 2000.

Earlier proceedings had established that his employment continued until 31 August 1999 and that he was dismissed by reason of redundancy. The Council had consequently reconsidered his entitlement but concluded that any award of added years would be unlawfully generous. The central issue was whether the claimant could rely on having reached the age of 50 during an artificial extension of employment which had been arranged to secure eligibility for enhanced benefits.

1. The application was dismissed. The Council’s refusal to award added years was lawful because an award in the circumstances would have been unlawful and irrational.
2. The statutory gateway under the Local Government (Early Termination of Employment) (Discretionary Compensation) (England and Wales) Regulations 2000 requires a genuine factual situation in which the employee has attained 50 and has been dismissed by reason of redundancy or in the interests of the authority’s efficient exercise of its functions. Only then may the authority consider exercising its discretion.
3. The power is compensatory. An award must not exceed the relevant loss. The statutory age threshold cannot be bypassed by an unlawful extension of employment designed to trigger eligibility. Although the claimant was formally still employed when he reached 50, he had already become redundant at 48. His continued employment was maintained artificially for the purpose of obtaining enhanced benefits and could not supply the missing statutory condition.
4. The Council was entitled to consider what had actually occurred rather than speculate about how long the claimant might otherwise have remained employed, or what post and salary he might have obtained. The claimant’s losses and the Council’s financial savings did not justify disregarding the statutory age limit.
5. The Court of Appeal’s recognition that the employment relationship continued in reality did not determine entitlement under the Regulations. That question depended on the construction and purpose of the Regulations and was not resolved by the earlier appellate decision.
6. Since no lawful award was available, remitting the matter for fresh discretionary consideration would serve no purpose. The claimant was ordered to pay one set of costs. Permission to appeal was refused by the judge.

• Court of Appeal: The Court of Appeal held that the claimant’s employment continued until 31 August 1999 and remitted the matter for consideration of enhanced redundancy and retirement benefits under the predecessor regulations.
• High Court (Administrative Court): The present application for judicial review was dismissed. The court held that the earlier decision did not establish entitlement to added years under the 2000 Regulations.