With
the advent of laws preventing age discrimination, the concept of looking
forward to retirement is undergoing a drastic rethink. By Linda Goldman & Joan Lewis
In
2006, the part of the EC Equal Treatment Framework Directive that deals with
equality of opportunity for those with more years under their belts, as well as
for those with very few, will become law in the UK.1
As
the net of political correctness closes in on what would, in some
circumstances, be described as a grey area of the law, businesses are preparing
to deal with an older workforce and increasing rights for younger people.
The
occupational health (OH) team needs to be aware of the impending change in the
law because of the links between health issues and those at the diverse ends of
the age spectrum. An older workforce may need to have age-specific risk
assessments, provided the assessments themselves are not seen as
discriminatory.
The
new law is designed to promote equality for all ages within the workforce. It
will apply similar concepts to those of race, sex and disability discrimination
so that it will be unlawful to discriminate against a person by reason of their
age, whatever that age is.
The
rules will apply not only to all age groups, but also to all sizes of employer,
both large and small. Consultation, through the document entitled Equality and
Diversity: Age Matters,2 was completed in October 2003 on the scope of the new
regulations, which must be finalised and in force by October 2006.
Remit
of the new law
The
law will prevent age discrimination in employment and vocational training. Duties will be imposed on employers,
educational establishments (but not schools) and organisations such as trade
unions and professional associations.
Protection
will be far-reaching, covering all workers and applicants for work, as well as
students and course applicants.
Although office holders will be also be protected, at present the
indications are that voluntary workers will be excluded. In line with recent
developments in other areas of discrimination law, post-termination
discriminatory acts, which are related to employment or other protected
situations, will amount to victimisation, for which compensation can be
awarded.
Direct
and indirect discrimination will be covered. Thus, it will amount to direct
discrimination to do or omit to do an act on the grounds of a person’s age,
subject to some defined exceptions. It is currently proposed that indirect
discrimination will occur where, even if the effect is inadvertent, a
condition, policy or practice affects a person because of their age. It will be
necessary to show a strong defence of justification in order to defend a claim
of indirect age discrimination when this comes into law.
Employers
or providers of vocational training will have to justify age-related criteria
within the following parameters:
–
Health, welfare and safety
–
Planning for succession in employment
–
Specific training requirements for the job or course
–
Encouraging loyalty
–
The need for a reasonable period of service prior to retirement.
The
age limit for bringing unfair dismissal claims will go for employees who have
reached the age of 65 or the normal retirement age for their job. However,
employers will be able to dismiss employees who have reached their contractual
retirement age or such statutory retirement age that the Government may impose.
Employers will have to be able to justify the imposition of a contractual
retirement age.
Retirement
Other
changes in the law will follow. Thus,
the right to a redundancy payment will accrue in relation to years of work
completed before the employee’s 18th birthday and persons over 65 will be
eligible.
The
new law will provide for unfair dismissal compensation to be at the rate of one
week’s pay, subject to the current statutory limit, for up to 20 years of
service, without reference to the employee’s age.
Although
the impending change will be welcomed by workaholics, late starters and those
who need an income that cannot be provided by a pension, there should also be
considerable benefits for skilled young people. The most obvious effects will
be on older workers as there will be a revision to the retirement age for
achieving a state pension. However, as the directive allows for late entry to company
pension schemes in that it allows employers to set age requirements for entry
and to use age in actuarial calculations on benefits, it is likely that the new
UK law will encompass provisions allowing people to work longer and accrue
further long-term benefits.
Effects
on employment
At
a time when pension funds are suffering dramatic shortfalls, it appears to be
essential that there is legislation in place that encourages people to continue
working to maintain income. Employers need to consider the cultural impact of
newly-qualified older people coming into the work arena, as well as looking at
varying their modus operandi in recruitment, selection and promotion.
Guidance
is anticipated in relation to variation of retirement age and whether
retirement should be compulsory at a specific age. Since there is a perception
of increasing levels of ill-health as the human body suffers the onslaughts of
age, there may be increasing links with disability discrimination, which needs
to be borne in mind when drafting equal opportunities policies.
Getting
ready
The
Department of Work and Pensions published a survey on age discrimination in
October 2003.3 It showed that 67 per cent of those surveyed were aware that the
new laws will be in force in three years’ time. Almost as many (62 per cent)
base recruitment and training purely on skills needs and do not rely on age as
a determinative factor. More than half (55 per cent) do not use age as a
criterion in redundancy selection.
It
is sensible to start looking at the database on age for job applicants,
entrants for training programmes, candidates for promotion, length of time in
post and current actual retirement age.
It
may be worth considering a confidential survey to find out the aspirations of
the workforce so future planning can be based on an internal equal treatment
framework.
Policies
need to be reviewed so that harassment and victimisation are prohibited on the
grounds of age. Training should be considered as there are many words and
phrases that are unacceptable in terms of good taste, and could amount to a
basis for a discrimination claim.
Recruitment
programmes need to be reviewed. The advertisement for a ‘mature’ candidate may
be discriminatory against a suitably-qualified younger person. All job
specifications should be reviewed against the background of early sex
discrimination law.
References:
1.
EC Equal Treatment Framework Directive (No.2000/78)
2.
www.dti.gov.uk/er/equality/age.htm
3.
www.wired-gov.net/NWC8394A7F/ WGLaunch.asp?ARTCL=20453
Linda
Goldman is a barrister at 7 New Square, Lincoln’s Inn. She is head of training
and education for Advisory, Consulting & Training Associates Ltd (ACTA).
Joan Lewis is the lead consultant in employment law and HR for ACTA. ACTA, also
trading as Virtual Personnel ™, is licensed by the General Council of the
Bar under the BarDirect scheme in employment law matters, 020 8943 0393.
Casebook
Baker
v Cornwall County Council, (1990), CA
Notions
of whether people will ‘fit in’ by reason of their age will have to be set
aside. In Baker v Cornwall County
Council, the Court of Appeal said: “An excuse such as ‘we wanted someone who
would fit in’ is often a danger signal that the choice was influenced not by
the qualifications of the successful candidate but by the sex or race of that
candidate.”
Fast-forward
to 2006, and add ‘or age’, and the spectrum of discrimination is widened. And
what about training and promotion? History tells us that objective grounds will
be the only satisfactory way to establish that no discrimination took place if
an otherwise suitable candidate is overlooked.
Sheriff
v Klyne Tugs (Lowestoft) Ltd, (1999), CA
The
Employment Tribunal has jurisdiction to award compensation for personal injury,
including psychiatric damage, arising out of unlawful sex discrimination. The
Court of Appeal held that where there is a link [between cause and effect], the
employee is better to bring a discrimination claim rather than one for personal
injury as the civil courts require the claimant to show their injury was
reasonably foreseeable. More recently, in Essa v Laing Ltd, this principle was
upheld. The decision, under appeal at the time of writing, was that the
applicant does not have to show that psychiatric damage as a result of
discrimination was reasonably foreseeable. It is enough to show that
discrimination caused the psychiatric injury.
The
problem for employers is that high awards can occur even without an element of
personal injury, such as in cases where the applicant has no clinically
diagnosed condition but suffers hurt feelings and a consequent loss of
self-esteem. The loss of a job may plunge the individual into a depressed job
market where, but for the employer’s discrimination, he need not have been. It
was said in British Sugar plc v Kirklees (1998), EAT: “Those prejudices are
particularly relevant to an applicant claiming disability discrimination…”
Therefore, consider the implications for age discrimination.
Price
v Civil Service Commission, (1977), EAT
When
considering the wording of advertisements or recruitment criteria, this case is
a salutary reminder. Price was 35 when she applied for a job in the Civil
Service, where the age criteria for entry was set between 17 and 28. Under the
Sex Discrimination Act 1975, that amounted to indirect sex discrimination
because the proportion of women who qualified on age grounds was significantly
less than the number of men because women tend to start their careers later or
may interrupt their careers in favour of family obligations. After October
2006, this sort of claim could be brought under the heading of age
discrimination.
Wall
v British Compressed Air Society, (2003), EAT
Section
109 of the Employment Rights Act 1996 provides that an employee is barred from
bringing a claim for unfair dismissal to an employment tribunal if he has
reached the age of 65 unless his employer has a “normal [or contractual]
retiring age” for staff, which is higher. In this case, Wall had a contractual
retiring age of 70 and he held a unique position as the employer’s director
general. Therefore, he could not be compared with any other employee.
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The
EAT considered the case of Age Concern Scotland v Hines (1983) EAT, in which
the applicant was not unfairly dismissed after the contractual retirement age
of 60 despite the employer having agreed that she could work past that age. She
too was in a unique position. In this case, the EAT said that the policy
underlying section109 was that employees who have a contractual retiring age
over 65 are entitled to bring a claim for unfair dismissal to the employment
tribunal if they are dismissed before reaching retirement age. The EAT said the
fact there was a unique position meant there could be no comparator but the law
does not provide for making a comparison. Thus, the EAT took the view that
Wall’s case could proceed in the employment tribunal. However, the employer has
been given leave to take the case to the Court of Appeal.
Recently,
a London employment tribunal held in another case that the upper qualifying age
of 65 for unfair dismissal was unlawful but the EAT has overruled that
decision. Until the law is changed, employees over normal retirement age
(which, by contract may be above statutory retirement age) are not eligible to
present a complaint of unfair dismissal nor are persons over the age of 65
eligible for a statutory redundancy payment.
