A recent tribunal ruling means it is highly likely there will be more claims
for unfair dismissal from people over the age of 65
Stratford Employment Tribunal has just decided that it can hear unfair
dismissal and redundancy payment claims from an employee aged over 65, in the
case of Rutherford v Towncircle Ltd, 3203345/98 and 2200740/01.
Under the Employment Rights Act, ex-employees cannot bring unfair dismissal
claims if they are over the normal retirement age for their employment
position. If there is no normal retirement age, they cannot bring a claim if
they are aged over 65. The reason for this is that the exception applies to the
two preceding sentences, not only the second sentence. Also, over 64s are not
entitled to a full redundancy payment and over 65s are not entitled to any.
Rutherford was made redundant at the age of 67. He argued that the bar on
older employees bringing unfair dismissal claims and receiving redundancy
payments was indirectly discriminatory, and therefore invalid. This was because
the age bar affected more men than women because more men than women want to
work beyond the age of 65.
The case was heard by the EAT in 2001 ([2001] IRLR 599). It decided that the
statistics which Rutherford had used to try to prove that more men than women
want to work beyond 65 were inadequate. Also, because indirect sex
discrimination is not unlawful if it can be justified, the Government should
have been invited to give evidence on the question of why the age bar in the
Employment Rights Act is justified.
The EAT sent the case back to the Employment Tribunal to make a final
decision, which it has just done.
The tribunal was satisfied that new statistics produced by Rutherford did
prove that the age bar on unfair dismissal cases had more of an impact on men
than women. The statistics are attached to the decision so that other claimants
can make use of them. Furthermore, the tribunal did not accept the Government
could justify the provision. The age bar amounted to unlawful sex
discrimination and was invalid.
Implications
Although this decision is not binding on tribunals, it is now likely that
claims will be brought for unfair dismissal and redundancy payments from others
over the age of 65. Unless the EAT overturns the decision, claimants are likely
to succeed.
If there is a normal retirement age which is below 65, the claimant would
need to find additional statistics to cover the lesser age range, but there is
no reason, in principle, why this decision could not be followed.
Managers should, therefore, treat staff who are over retirement age no
differently than younger staff when it comes to handling dismissals.
What about calculating redundancy payments? Managers may be tempted to
follow the statutory rules and see whether they get away with paying nothing to
over 65s.
Employers should also look out for provisions to enforce the anti-age
discrimination provisions in the Framework Directive on Equal Treatment, which
must be introduced in 2006.
The directive allows member states to introduce age limits if these can be
justified for legitimate labour markets objectives. The Government has
consulted on whether employers should be able to fix the retirement age of
staff. We await the Government’s response to this exercise.
Key points
– A tribunal has decided that over 65s can claim unfair dismissal and
redundancy payments
– Employers should protect themselves by treating employees over the normal
retirement age fairly
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– Employers should budget for redundancy payments to over 65s.
Jill Kelly is an associate with Clarks Employment Team, Reading
