Age of reason
19 September 2005
5 March 2013
Case law update: employment tribunal finds that setting a compulsory retirement age is not age discriminatory in certain circumstances
4 July 2013
21 February 2013
22 October 2013
27 September 2013
In July, the Department of Trade and Industry (DTI) published in draft the Employment Equality (Age) Regulations 2006 with a commencement date of 1 October 2006. That might seem a long way off, but employers (including professional partnerships) need as much time as possible to wrestle with the implications of the new law. Educating managers not to take employment decisions based on age cannot be left to the stroke of midnight on 30 September 2006. So what should employers now be doing?
First of all, employers will need to digest more than 50 pages of statutory instrument. The good news is that they will find the new law strikingly familiar because it follows the framework of other EU-inspired discrimination laws. Direct and indirect discrimination on the grounds of age in the fields of employment and vocational training will be unlawful, as will discrimination by way of victimisation or harassment. Job applicants and employees will be protected, together with agency workers, office-holders, barristers and partners. Employment tribunals will have jurisdiction to hear claims and the power to award uncapped compensation.
But there are some interesting differences that make the new law more challenging. Very significantly, it will be possible to objectively justify direct (as well as indirect) discrimination by showing the employer's action was a proportionate means of achieving a legitimate aim. Furthermore, the law will include a host of exceptions unseen in other strands of discrimination. Employers will want to check that some of their long-cherished HR practices remain lawful.
Unsurprisingly, recruiting or promoting on the basis of age, whether by using a minimum or maximum age, will become unlawful unless justified objectively. There is one exception: it will be possible to refuse to recruit a person "who has attained the age of 65". Curiously, this will not apply to workers who are not employees, office-holders or partners. Employers would be well advised to base decisions about recruitment and promotion on skills rather than age. Importantly, even avoiding age requirements may not be enough because of the breadth of coverage of indirect discrimination. For example, will a graduate-only intake policy be lawful? This could be indirect discrimination as it disadvantages younger employees. Perhaps it could be justified objectively if, for example, only graduates have the skills to do the relevant job. Another task for employers is to audit their job adverts or application forms for age or age-related elements. While, for example, the law will not outlaw asking for someone's age at a job interview, the risk is that a rejected job applicant may convince a tribunal that the question demonstrated a selection system unlawfully based on age.
Turning to benefits, employers will be relieved that the setting of an age criterion for entitlement to invalidity benefits will not be unlawful, plus there are major exceptions for age-related pension rules. But withholding other benefits because of age will be at risk. Consider, for example, benefits granted as an inducement to retire early or benefits not granted because retirement is close. In addition, indirect discrimination could catch eligibility requirements that have a greater impact on a particular age group. The classic example is a service-related benefit. To retain these, employers will have to seek out objective justifications. The DTI draft does offer three potential exceptions. A length-of-service requirement of five years or less, or one that mirrors a similar requirement in a statutory benefit (such as redundancy pay) will be exempt; similarly, a length-of-service requirement which rewards loyalty, encourages motivation or recognises experience. Nevertheless, these exceptions are quite limited. For example, length of service must be the sole criterion to determine access. Thus, a benefit offered only to employees who have a certain number of years of service and have reached a certain age would not be within the exception. Employers need to test each of their benefits against the new law and implement required changes before October 2006.
Possibly the most talked about provision in the new law is that employers will be able to retire employees at 65 (although the Government will review this in 2011). But retirements will have to comply with age discrimination law and unfair dismissal law (because the upper age limit will be abolished). This means retirements will have to be "planned retirements" and employers will have to comply with the new "duty-to-consider" procedure. The former requires giving the employee six months' notice of retirement. Presumably, transitional provisions will be introduced into the legislation - otherwise notice for a retirement on 1 October 2006 would have to be given six months before the legislation came into effect. The duty-to-consider procedure is modelled on the right to request flexible working. The employer has to notify the employee, between six and 12 months prior to retirement, that the employee can request to work beyond retirement. Following a request, employer and employee are to meet and the employer is to give its decision within 14 days. The employer's duty is to consider the request "in good faith". The employee can appeal within 14 days and thereafter the employer must give its final decision within another 14 days. The big question is whether this is only a matter of process or whether the employer requires a legitimate reason to reject. The current text suggests it is the former.
What about employers which have a standard contractual retirement age of below 65? Enforcement of this will be unlawful unless it can be justified objectively. A blanket retirement age of below 65 looks very vulnerable. On the other hand, there could be circumstances where a younger age is justifiable, such as to comply with international age restrictions. Having said that, employers might find it more productive to put in place procedures to effect fair dismissals irrespective of age. After all, one problem in seeking to defend, say, a retirement age of 60 is that, if unsuccessful, the compensation awards could be significant.
One of the most potent rules of discrimination law is the employer's secondary liability for the acts of its employees. Investing time in educating staff to be 'non-ageist' will reap dividends. It is not a joke that ageist jokes will be unlawful harassment. They could be if they violate the victim's dignity or amount to an intimidating, humiliating or offensive environment. Tomorrow, ageism will become as much a taboo area as racism is today. A cultural shift will be required for some. One crumb of comfort for the office comedian is that his age will no longer be a lawful ground for dismissal, although the age of his jokes might be.
Raymond Jeffers is chairman of the Employment Lawyers Association and global head of employment at Linklaters
which will demand a total cultural shift. By Raymond Jeffers