A recent case involving Asda and an employee who suffered from dementia has demonstrated the risks around even well-meaning discussions about when someone plans to give up work. Ellen Goodland advises what employers can and can’t do.
Although age discrimination has, by and large, been outlawed since 2006, it was only in 2011 that employers were prevented from retiring people because they had reached a certain age (albeit with some limited exceptions).
Up until then the standard employment contract would include a compulsory retirement age – usually the employee’s 65th birthday – at which point they would be expected to give up work.
Since then, employers have become used to operating without the option of a blanket retirement age, but tricky situations can still arise, as shown by the recent case of Hutchinson v Asda Stores.
Mrs Hutchinson had been employed by Asda as a shop floor assistant for 20 years. When she was in her early 70s, she started to exhibit symptoms of dementia. Over time, Mrs Hutchinson acknowledged her symptoms were worsening and her colleagues also noticed that she was getting more forgetful.
There then followed various discussions with her about her condition, during which time retirement was suggested as an option on more than one occasion.
Eventually, having brought an unsuccessful grievance for bullying and harassment due to her age and disability, she resigned and brought claims against Asda including for age and disability discrimination.
The employment tribunal found that, following a deterioration in Mrs Hutchinson’s health, managers had raised retirement as an option with her on more than one occasion.
Well-meaning but unlawful
The tribunal accepted that the managers’ actions were well-meaning – there were numerous instances detailed which demonstrated that her managers had tried to be supportive – but by raising the option of retirement with Mrs Hutchinson, Asda had unlawfully discriminated against her on the grounds of age.
They argued that the managers would not have raised this as an option for someone not of retirement age.
A third of all workers in the UK are over 50, and this number is predicted to increase. So how can employers approach workforce and succession planning – which remain valid objectives – while avoiding the risk of age discrimination claims?
Can you justify a retirement age?
One question to consider is whether you can legitimately impose a retirement age which operates for some parts of your workforce.
As a rule, direct discrimination – where you treat somebody less favourably because of a protected characteristic such as sex or race – cannot be justified.
However, the Equality Act provides that there is no discrimination if someone is treated less favourably because of their age and that treatment can be objectively justified.
In The Incorporated Trustees of the National Council for Ageing (Age Concern England) v Secretary of State for Business, Enterprise and Regulatory Reform, the European Court of Justice confirmed that objective justification must be limited to achieving social policy aims.
These could be related to employment policy, the labour market or vocational training, so aims with a public interest as opposed to aims solely for the benefit of the employer.
“Intergenerational fairness” and “dignity” were identified as social policy aims and these were also referred to by the Supreme Court in Seldon v Clarkson Wright & Jakes in accepting that the law firm’s retirement age of 65 for its partners had such aims.
It will be easier for an employer to show it has legitimate social policy aims if it restricts the retirement age to a particular role or function – in the Seldon case the retirement age applied to the law firm partners only.
Supporting evidence to demonstrate that the aim is legitimate and that the retirement age is a proportionate way of meeting that aim will also needed. This is why a blanket retirement age that operates across the board will be difficult to justify as the evidence is unlikely to be available.
Just because an employer does not want to operate a retirement age, or cannot justify doing so, doesn’t prevent the employer from having conversations with an employee about their future work plans.
It is entirely legitimate for an employer to want to ask about its employees’ intentions in respect of their employment from time to time. The important thing is that the employer should be asking this across all demographics within their workforce.”
It is entirely legitimate for an employer to want to ask about its employees’ intentions in respect of their employment from time to time.
The important thing is that the employer should be asking this across all demographics within their workforce. For example, you could include a standard question as part of the annual review process which asks employees about their medium- and longer-term plans. This is fine provided that the same question is asked of all employees – regardless of age.
If an older employee does say they have plans to retire at a particular point in the future, you, as the employer, should make it clear that the employee won’t be held to that and that they are free change their mind should they want to.
One thorny area where employers can trip up centres around performance issues.
Line managers faced with an older employee who is under-performing will often want to suggest to the worker that they retire in a bid to save the potential embarrassment of starting a performance management process.
While this may be a potentially laudable aim (in Seldon ‘dignity’ was identified as a potential legitimate aim for a retirement age), those good intentions may come back to bite as was the case with Asda.
With the latest tribunal statistics showing compensation awards for age discrimination to be amongst the highest, it may be safer to treat performance management issues for this demographic as you would any other.
In any event, line managers should be trained so that they understand the framework around age discrimination, retirement and the dangers of making assumptions – however well-meaning.
Equipping them with this knowledge so they feel confident to manage these sorts of conversations is likely to be a wise investment.