Ageism will remain the centre of attention as new
anti-discrimination directives look set to complicate the matter of mandatory
retirement
Recently, age discrimination has rarely been out of the news. A few months
ago, John Rutherford successfully claimed in an employment tribunal that the
upper age limits on unfair dismissal and redundancy protection in the UK
infringe EU sex equality laws. Then we heard reports that Schroders is facing a
multi-million-dollar lawsuit in the US from 56-year old Sharon Haugh, who
claims she was dismissed because her employer "wanted someone
younger".
Meanwhile, the Government has published a major Green Paper on the reform of
pension provision in the UK and a consultation document, Towards Equality and
Diversity, in preparation for the implementation of the 2000 EU
anti-discrimination directive.
Age discrimination looks certain to remain in the spotlight, with the DTI
appealing the Rutherford decision and the Government due to publish a further
consultation document in the late spring/early summer, specifically focusing on
the age aspects of the EU directive.
Under the terms of the directive, the UK is obliged to introduce laws
covering direct and indirect age discrimination, as well as age-related
harassment and victimisation, by December 2006.
Perhaps the most important issue for the UK will be mandatory retirement. On
the face of it, requiring an employee to stop working merely because they have
reached a particular age represents one of the most obvious forms of age
discrimination.
However, the directive states that its measures are "without prejudice
to national provisions laying down retirement ages" (of which there are
currently none in the UK). It also permits direct age discrimination that is
"objectively and reasonably justified".
In light of this, the Government would appear to have three options: to
exclude mandatory retirement from the scope of the UK legislation, enabling
employers to retire people at a particular age; to permit mandatory retirement,
but only in circumstances where the employer can objectively and reasonably
justify it; or to make no specific provision in respect of mandatory
retirement.
The Government is likely to adopt the second option. But justifying
mandatory retirement on objective and reasonable grounds is likely to be far
more difficult than employers expect.
Factors that might support mandatory retirement could include adequate
pension provision and an established seniority plan. In the US, for example,
where federal age discrimination laws have been in place since 1967, employers
are entitled to retire senior executives over 65 who have been in employment
for at least two years and have a pension of more than $44,000 (£26,726) per
annum.
Providing an exemption for mandatory retirement at a particular age should
not be confused with setting an upper age limit on age discrimination
protection. In the event that an employer is able to justify mandatory
retirement, it will only have a one-off opportunity to dismiss the employee in
question. Perversely, this may result in staff being forced out of the
workplace prematurely by employers who fear discrimination claims from
employees allowed to work beyond retirement age.
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Employers would be well advised to review their employment practices in
general, with a view to identifying practices that might be vulnerable to litigation.
By James Davies, who chairs the Employment Lawyers’ Association’s working
group on age discrimination, and is a partner at solicitors Lewis Silkin
