Cross & Anor v British Airways Plc

The Court of Appeal held that the statutory concept of a "normal retiring age" for the purposes of section 109 of the Employment Rights Act 1996 is not a contractual or individual right capable of being "transferred" and frozen by regulation 5 of the Transfer of Undertakings (Protection of Employment) Regulations 1981 (TUPE). The normal retiring age is an objective, fact-sensitive question determined by reference to what applies at the time of dismissal for employees in the same "position", and is therefore not preserved as at the date of transfer. The court applied the rule in Daddy's Dance Hall about transfer-related waiver of rights but concluded that, even accepting that contractual retirement terms could be protected from transfer-related change, the statutory normal retiring age is assessed at the time of dismissal and in these appellants' cases was 55, not 60.

Background and nature of claim:

• The claimants, former BCal flying crew transferred to British Airways (BA) in 1988, challenged compulsory retirement at 55 as amounting to unfair dismissal under the Employment Rights Act 1996 (section 94), asserting that their pre-transfer contractual and corresponding statutory normal retiring age of 60 should be preserved by TUPE (Regulation 5).

Procedural posture: The appeal to the Court of Appeal was from a decision of the Employment Appeal Tribunal (EAT/0572/04/TM, Burton J, 23 March 2005) which had held that the statutory normal retiring age under section 109 did not transfer under TUPE and that the appellants' normal retiring age at the time of dismissal was 55.

Issues framed by the court:

1. Whether the section 109 statutory normal retiring age is transferable under regulation 5 of the TUPE Regulations as an individual right or entitlement.
2. If transferable, whether post-transfer conduct or subsequent changes could lead to substitution of a different statutory normal retiring age (the effect of the Daddy's Dance Hall rule and the breaking of any transfer link by subsequent events).

Reasoning and conclusions:

• The court emphasised that section 109 identifies a normal retiring age by reference to facts at the time of dismissal and the position of the employee within a group; it is therefore an objective, rebuttable factual enquiry rather than a discrete contractual right.
• Regulation 5 protects contractual rights and transfers the transferor's rights and obligations arising from contracts of employment, but it does not operate to freeze a statutory assessment (the normal retiring age) as at the date of transfer.
• The court accepted the principle from Daddy's Dance Hall that transfer-related agreement adverse to transferred employees may be ineffective, but held that this did not alter the primary conclusion that the statutory normal retiring age is determined at dismissal and was 55 for the appellants.
• On the alternative point about post-transfer events breaking any transfer-related link, the court observed that post-transfer variations unconnected to the transfer can defeat a transfer-related challenge, but found on the facts that no such independent variation undermined the appellants' positions.

Remedy sought: the appellants sought to establish that they remained entitled to the pre-transfer normal retiring age of 60 and therefore were protected from unfair dismissal until that age; the court rejected that contention.

Appeal dismissed. The Court of Appeal held that the statutory normal retiring age in section 109 of the Employment Rights Act 1996 is not a transferable contractual entitlement under regulation 5 of the TUPE Regulations; it is determined objectively at the time of dismissal. On the facts the appellants' normal retiring age at the relevant times was 55, so they had no right to claim unfair dismissal beyond that age.

Appeal to the Court of Appeal from the Employment Appeal Tribunal (EAT/0572/04/TM, Burton J, 23 March 2005), itself considering the earlier Employment Tribunal's decision. The Court of Appeal delivered judgment on 11 May 2006 ([2006] EWCA Civ 549).