Claimant v TUI Airways Ltd
Outcome
Individual claims
The tribunal found the claimant had a contractual right under the settlement agreement to receive employer pension contributions at 100% of basic salary until dismissal. If these were not paid, there was an unlawful deduction. However, the claimant had no contractual right to PHI benefits until state pension age as benefit was contingent on continued employment which ceased at age 65.
The tribunal found no less favourable treatment when the claimant was moved to the PIP scheme because a hypothetical comparator under 60 whose benefits were not already pre-funded would have been treated the same way. Even if there was less favourable treatment, it was a proportionate means of achieving the legitimate aim of maintaining a commercially viable incapacity scheme across all ages.
Dismissal at age 65 was direct age discrimination but was justified as a proportionate means of achieving a legitimate aim, given the regulatory restrictions on commercial pilots over 65 and the well-established authority that such mandatory retirement ages for pilots are lawful.
The dismissal was for some other substantial reason (contractual retirement age of 65) which was a potentially fair reason. The tribunal found it fair in all the circumstances given the claimant could not continue as a commercial pilot due to regulations and had provided medical evidence indicating capacity for only 8-10 hours work per week, making alternative employment unrealistic.
Termination was in accordance with the contractual retirement age of 65. The claimant was fully aware of this term and had in excess of three months' notice. There was no breach of contract regarding notice period.
The claimant withdrew his disability discrimination claims at the start of the hearing.
Facts
The claimant was a commercial airline pilot employed from 1979 until dismissal on 29 December 2023, the day before his 65th birthday. In 2014 he was suspended following an incident in Mexico involving allegations of assault and harassment. He was signed off sick in January 2015 and failed his medical assessment in February 2015, resulting in suspension of his pilot's licence. In January 2017 he entered into a settlement agreement which provided for support in applying for Permanent Health Insurance (PHI) and confirmed continuation of employer pension contributions at 100% of basic salary. He was accepted onto PHI in November 2017 and received proportionate benefit, bringing his income to 75% of pre-incapacity salary plus £3,000 alternative earnings. In August 2021, following collective bargaining between the respondent and BALPA, a new Pilot Income Protection (PIP) scheme was introduced which removed proportionate benefit. The claimant, aged over 60, was moved to the new scheme immediately and his benefit was approximately halved. He was dismissed on reaching the mandatory retirement age of 65 for commercial pilots.
Decision
The tribunal dismissed the age discrimination, unfair dismissal and wrongful dismissal claims. The mandatory retirement age of 65 for pilots was justified as a proportionate means of achieving a legitimate aim given regulatory restrictions. The transfer to the PIP scheme did not amount to unlawful age discrimination because the treatment was due to whether benefits had been pre-funded (under 60s) or were self-funded (over 60s), not age itself. The claim for unlawful deduction of wages partly succeeded: the claimant had a contractual right under the settlement agreement to employer pension contributions at 100% of basic salary until dismissal, and if these were not paid there was an unlawful deduction. However, he had no contractual right to PHI/PIP benefits until state pension age as eligibility was contingent on continued employment.
Practical note
Settlement agreements must be carefully construed: this case shows that even detailed schedules annexed to a settlement agreement may not create enforceable contractual rights beyond what is expressly stated in the operative clauses, particularly where documents relate to non-contractual schemes administered by third party insurers.
Legal authorities cited
Statutes
Case details
- Case number
- 3300432/2022
- Decision date
- 25 March 2025
- Hearing type
- full merits
- Hearing days
- 6
- Classification
- contested
Respondent
- Name
- TUI Airways Ltd
- Sector
- transport
- Represented
- Yes
- Rep type
- barrister
Employment details
- Role
- Captain / Commercial Pilot
- Salary band
- £100,000+
- Service
- 44 years
Claimant representation
- Represented
- Yes
- Rep type
- barrister