Education e-briefing: Automatic termination of a service occupancy agreement and the Human Rights Act

• United Kingdom

• Education - Briefings

25-07-2017

Background

Many educational institutions provide living accommodation for employees whose estates or facilities functions mean it is beneficial for the performance of their duties for them to live on site. Where such arrangements exist a “service occupancy” is likely to be created. One of the significant features of a service occupancy is the principle that it will terminate automatically when the employment comes to an end, in contrast to the more extensive notice requirements usually required for residential tenancies.

The conventional wisdom therefore has always been that as long as the employee properly met the legal test of a service occupancy the institution was entitled to recover possession of its residential property if and when that employee left his or her role. But do those principles breach the Human Rights Act (“the HRA”)? That was the point under consideration in the recent case of Hertfordshire County Council v Bryn Colin Davies. The point was significant because if they were that could undermine the concept of automatic termination.

Facts of the case

Mr Davies was a caretaker at a school owned by Hertfordshire County Council (“the Council”). Mr Davies and his family lived at a bungalow on school grounds pursuant to a “service occupancy – tenancy agreement” which he had entered into with the Council. That agreement expressly required him to reside at the bungalow for the better performance of his duties.

Following a back injury sustained in 2011, Mr Davies’ job description was amended in 2014 to state that he “may” be required to live on site. He was not advised subsequently, however, that he was not required to live at the bungalow.

Mr Davies was dismissed for gross misconduct in June 2015 and was served with a notice to quit (which the court ultimately held the Council need not have issued).

Possession proceedings were subsequently issued by the Council and Mr Davies contested them, in part, on the basis that the exception afforded to service occupancy agreements was incompatible with Article 14 (discrimination) of the HRA, when read with Article 8 (private and family life).

The decision

The High Court held that the exception afforded to service occupancy agreements (pursuant to Schedule 1, paragraph 2 of the Housing Act 1985), that they are automatically terminated upon termination of an employee’s employment, is not incompatible with the HRA.

In deciding that the exception was not incompatible with such rights the court stated that the exception is “rational” as “if a dwelling is only let for the purpose of a service occupancy, there is no reason why the occupier should have security of tenure, and a good reason why not: if his employment ceases, the [employer] can then house his replacement there”.

The Council was accordingly entitled to possession of the bungalow.

Key points

• This decision will be good news to all education institutions - whether HE or FE institutions, schools or academies - who permit employees to reside at on-site accommodation.
• It is vital though that a purported service occupancy agreement expressly requires the employee to live at the relevant property for ‘the better performance of their duties’.
• This requirement is key as the court will draw a distinction between an employee who occupies a dwelling provided by his employer (as part of their remuneration) and an employee who occupies a dwelling for the purpose of better performing their duties.