Retirement laws needed to stem tide of tribunals

The
Government would be wise to speed up the introduction of age discrimination
legislation to put an end to the uncertainty

The
Government would be wise to speed up the introduction of age discrimination
legislation to remove uncertainty and reduce the ever-growing number of
tribunals.

It
comes as no surprise that the recent employment tribunal ruling allowing
employees over the age of 65 to bring claims for unfair dismissal and statutory
redundancy is to be appealed.

The
Government clearly believes that, despite what the Labour Force Statistics
suggest, the upper age limit for employment claims is not discriminatory.

However,
some may have been surprised to read these words from a Government
spokesperson: "Some issues are already clear. We must erode the present
cliff edge at the end of working life – where on Friday someone is a valued
member of the workforce, but by Monday they are shunted into retirement. This
will mean extending choice and removing financial penalties that stand in people’s
way. And it will mean legislating to end age discrimination at work."

These
were the words of the Work and Pensions Secretary Andrew Smith at the Labour
Party Conference – but the subject matter was not compulsory retirement age,
rather separate legislation concerning pension reforms.

Inland
Revenue regulations are to be reformed, opening up the possibility of easier
retention when an employee has reached retirement age. Easier, that is, for the
employer to persuade staff to stay on.

The
current Inland Revenue regulations prevent employees from taking a pension and
salary from the same employer unless a completely different job is taken.

As
a result, employees find they are unable to wind down to part-time work and
stay with the same company purely because of financial difficulties. The
changes to the pension restrictions will remove these financial barriers. This
will clearly benefit employers who wish to retain older workers who have key
roles in the company, and might otherwise be lost to competitors.

This
might be misinterpreted as the Government’s first step in introducing
legislation giving older workers more rights. However, whether the employee is
invited to stay on after retirement age is the employer’s choice. An employee
doesn’t have the right to complain if they are not retained. But legislation
introducing real rights for older workers is definitely in the pipeline.

Implementation
of the Employment Equality (Age) Regulations must take place before December
2006. Although the first draft has not yet been published, it appears likely it
will be unlawful for an employer to stipulate a compulsory retirement age that
cannot be justified by the needs of the particular job.

In
the current situation, the Stratford Employment Tribunal’s decision is persuasive,
but it does not change the law.

Law
books still state that an employee over 65 years old or at normal retirement
age, will not be able to bring a claim against their employer. Yet employees
are bringing claims on the back of this decision and these claims are being
stayed pending the appeal being heard.

Every
time an employee is retired, there is a risk that they may present a complaint
of unfair dismissal. Employers either have to follow a full dismissal procedure
and identify a fair reason for dismissal, or bite the bullet and see whether
they submit a claim.

This
uncertainty could be quickly addressed by the introduction of new legislation.
Everybody knows that age discrimination laws must come into force. Delay now
means that employers are left in limbo and the tribunals lists are getting
longer.

Yes,
there are practical difficulties in introducing age discrimination regulations.
But there must also have been difficulties introducing similar legislation
outlawing race, sex and disability discrimination.

It
will take time for employers to become accustomed to age discrimination
legislation, and it is likely that for many, an inability to recognise it as a
serious issue will result in costly claims and potentially large compensation
awards.

However,
the benefit will be a return to certainty – which has got to be in everybody’s
best interests.

By
Michael Ball, Employment partner, Halliwell Landau

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