Age-old values

Age discrimination legislation will not take effect in the UK until October 2006, but two important age-related cases with potential impact on UK employers are continuing to progress through the Appeal Courts.

In the first (Rutherford v Secretary of State for Trade and Industry; Bentley v Secretary of State for Trade and Industry) Rutherford and Bentley have recently requested leave to appeal to the House of Lords against the Court of Appeal’s decision in their claim against the Secretary of State for Trade & Industry. Further, they hope to take their case to the European Court of Justice.

The second case, Chanin & Others v British Airways Plc [Case No. 3300124/2002 & Others] involves a group of ex-British Airways cabin crew who were forced to retire at the age of 55 under the terms of their contract. An employment tribunal found earlier this year that BA had discriminated against them on grounds of sex but that this was justified because of the cost to BA of increasing the retirement age. The group of employees is taking the case to the Employment Appeal Tribunal, where it will be heard in March 2005.

In the Rutherford and Bentley claims, both men had been dismissed from their jobs in the clothing industry as they were over 65, but were unable to bring claims for unfair dismissal or to claim statutory redundancy payments because they had reached the statutory upper limit for bringing unfair dismissal claims. They were found by the Court of Appeal not to have been discriminated against on the grounds of sex, despite having succeeded on this argument in the employment tribunal.

Both of these cases have had to challenge retirement ages and the law in relation to retirement age via sex discrimination claims and both have involved complex legal arguments in relation to the pools for comparing advantaged and disadvantaged groups. It remains to be seen whether these individuals succeed, but will the introduction of age discrimination legislation in 2006 make such claims easier to bring?

Organisations wishing to retain a compulsory retirement age after 2006 will have to justify that practice objectively. Retirement ages that employers set for employees will be unlawful under the directive unless they can be said to be “pursuant to a legitimate policy aim” and “objectively and reasonably justified”.

The DTI’s provisional view in its response to consultation on this matter (Equality and Diversity: Age Matters [2003]) is that compulsory retirement ages will be unlawful, but that employers will exceptionally be able to justify mandatory retirement ages by reference to certain aims. It is not clear what those aims might be, but the guidance suggests that only very few aims will be justifiable. The guidance even gives an example of a large commercial airline requiring its cabin crew to retire at 60. The example provides that health and safety would be a difficult aim to justify, so it must be hoped that costs should not be allowed to stand in the way of employees such as Chanin and his colleagues having the freedom to work as long as they wish.

How would Rutherford and Bentley fare under the new legislation? The DTI guidance proposes changing the provisions relating to unfair dismissal so that employees can seek redress at any age, but that retirement at a justifiable retirement age will be a fair reason for dismissal.

Quite what would be a ‘justifiable’ age remains to be seen, although the Government is considering a retirement age of 70. This would have helped Rutherford, who was 67 when he lost his job, but not Bentley, who was 73. If this proposal does go forward in the legislation, it would remove the upper age limit for bringing claims, but would still limit the chances of success of such claims for unfair dismissal by allowing employers to argue that the retirement age imposed on employees was justifiable.

So much for retirement ages, but employers should not make the mistake of thinking that age discrimination applies only to older workers. Although no draft regulations have been produced, the new law is likely to have a massive impact on recruitment, selection and promotion processes. For example, advertisements must not contain any wording that suggests applicants should be of a certain age. Promotion based on years of experience may also cause problems if selection criteria cannot be justified in order to avoid tribunal applications from younger workers. Equally, benefits based on length of service may be difficult to justify. These are only a few examples of the likely effect of the forthcoming age legislation.

It is clear that the new legislation will impact employers from recruitment to termination and will affect everything in between. The concern for employers will therefore be whether they are able to able to justify discriminatory treatment. The directive gives a non-exhaustive list of possible justifications including the need for a certain level of experience or seniority to carry out a particular role and the need for a reasonable period of employment before retirement. It is hoped that the legislation implemented in the UK will provide more specific guidance on possible justifications. Employers will be well advised to carry out an ‘age audit’ on all policies to ensure they are not directly or indirectly likely to discriminate on the grounds of age.

If discrimination is possible, they will need to consider justification, ensuring the measure is ‘objectively and reasonably justified’ and ‘pursuant to a legitimate policy aim’, as described above. Having gone through such an exercise, employers will be in a stronger position if challenged, as they will be able to show that a process was gone through in which areas of possible discrimination have been considered along with the reasons for that discrimination. Employers should ensure that they keep a record of such an audit.

Editor’s note: City law firm Charles Russell, whose employment & pensions service group is behind the claims by Rutherford and Bentley and the ex-BA cabin crew, is seeking to deal with potential issues of age discrimination well in advance of the new legislation and has set up an Age Taskforce. Members of the Taskforce combine experience in retirement age cases with a keen interest in the development of this area of the law and its effect on employees and employers. Employers are invited to complete an age discrimination questionnaire, which can be found at, and to attend a seminar to be held at Charles Russell’s offices in January. Details will be available shortly on the website which will aim to prepare employers for the changes by providing practical advice and guidance on analysing processes and systems, in order to look out for possible areas of discrimination and consider whether these may be justified.

Sophie Whitbread is assistant solicitor at employment and pensions service group Charles Russell

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