An age of reason
3 February 2003
7 October 2003
9 September 2002
27 October 1998
9 February 2004
27 September 2004
At the end of last year, the Government finally unveiled its plans to beat our deepening pensions crisis, including a proposal to scrap the compulsory retirement at 65 years.
At the Employment Lawyers Association (ELA) annual lecture in November last year, Michael Rubenstein, the editor of Industrial Relations Law Reports, called the problematic issue of what to do with the mandatory retirement age "the most contentious issue" on a packed employment law agenda at the moment. "The way this issue is resolved is likely to determine the overall impact of age discrimination law, because so much of discrimination flows from compulsory retirement," he argued.
The Government has a distant December 2006 deadline to tackle age discrimination, by which time it is obliged to comply with the EU framework Employment Directive 2000. However, despite last month's pensions green paper, it seems unhurried to act. Why are ministers dragging their heels over implementing an effective law to battle age discrimination?
Recent experience in the employment tribunals and courts suggests that older workers will be quick off the mark to assert their newfound rights, and that they are already giving their bosses and the UK Government a taste of things to come.
Last September, John Rutherford and Samuel Bentley, both 70-plus workers in the clothing industry, successfully persuaded a tribunal that the laws denying workers over 65 the right to redundancy payments and protection from unfair dismissal were unlawful. They argued that they were sexually discriminated against because men were disproportionately affected by the upper limit of 65, as Government figures showed that significantly more men than women work beyond that age. The Government, however, has decided to appeal the case.
More recently was the high-profile case of the 56-year-old chair of the UK operation of investment house Schroders, who was fired to make way for "someone younger" after 20 years of service. Sharon Haugh was dismissed from her job just 10 days after receiving an award for outstanding contributions to the industry. In the absence of any age discrimination law here, she launched a multimillion-dollar legal action to enforce her legal rights in New York.
"The Government has been pushing for as long as it possibly can to avoid implementing the framework directive," comments ELA chairman Julian Hemming, who is a partner at Bristol firm Osborne Clarke. As he explains, Haugh brought the claim in the US because she did not have a direct right to bring such an action here. "The US legislation applies to employees over the age of 40, but the legislation we're going to have in the UK will apply to age discrimination at any age, and so there's a potential here for a much broader range of claim, whether you're young or whether you're old," Hemming explains.
Some commentators see the Government's decision to appeal the Rutherford case as a measure of its reluctance to implement the European law. "It's certainly inconsistent," comments Paul Quain, an employment law specialist at Charles Russell, who represented Rutherford. "I suspect they're treading a very fine line between wanting to appeal the judgment and remaining employer-friendly."
In the Rutherford case, a Stratford employment tribunal ruled that the upper qualifying age for unfair dismissal claims fell foul of European law by discriminating against men. Now we are left with the anomalous situation that the Government is appealing that decision and, according to Quain, it looks set to go to the European Court of Justice (ECJ). But at the same time, ministers are framing legislation that promises to outlaw any unfavourable treatment of older workers.
Quain argues that workers of 65 years and over are becoming an increasingly significant part of the workforce, as people live longer and there is growing uncertainty over pension provision. That means Rutherford has become a leading case. "The lack of protection against unfair dismissal and redundancy hits twice as many men as it does women, as there are twice as many working men over 65 compared to women," he explains.
"If the Government is committed to fighting age discrimination, why go through the farce of numerous appeals to end up in a position where they've won a case which doesn't actually support the legislative position that they've adopted to go forward?" asks Robin Bloom, an employment partner at Dickinson Dees. "It's a nonsense really, and the only winners are likely to be the lawyers."
As Bloom points out, the Rutherford challenge is not entirely new. There was a challenge in 1998 by James Nash, who was forced to retire at 69 from his job as a warehouseman for a fruit and vegetable wholesaler. He won before a tribunal that the 65 years upper limit indirectly discriminates against men. Sadly, Nash died before his case went to the Employment Appeals Tribunal (EAT).
Bloom also believes that the Haugh case is significant in this context as an indication of the type of worker who would be relying upon any future legislation. He is presently advising a worker employed by a US company considering a similar action. Rubenstein calls the prospective legislation a "charter for the middle-aged", adding that it would be mainly used by people "who are not yet old, who are not yet retired".
"These are people who have been in the workforce for years," the legal academic continues. "They'll have the name of their solicitor handy in their filofax, if not in their PDA. They'll know their rights and they'll have the resources to sue their employer if they're wronged." And that is why age discrimination is likely to prove to be a "bonanza" for employment lawyers, he reckons.
As Hemming reflects, it is an irony of this new generation of anti-discrimination legislation that it will serve to further entrench the middle-aged, predominantly white and male, in their positions of power.
Rubenstein is reluctant to read too much into the Government decision to oppose Rutherford. "The ruling wasn't all that compelling in my view anyway," he comments. "It's discrimination at several removes and the issue in the case is whether somebody over the age of 65 years should be allowed to claim unfair dismissal and redundancy payment, and whether the exclusion of those who are 65 and over is discrimination under EU law."
The ruling holds that the Employment Rights Act 1996, which provides that an employee who has reached 65 does not have the right either not to be unfairly dismissed or to receive a redundancy payment, indirectly discriminates against men. The ruling has its origins in the leading sex discrimination case of Marshall v Southampton and South West Hampshire Area Health Authority (1986), in which the Government set an equal upper limit for an unfair dismissal of 65 years for both men and women.
"The problem for the tribunal was that it didn't alter the link to the state pension age, and that's the basis of their reasoning," Rubenstein explains. "The fact that a man who is dismissed between 60 and 65 years can get a redundancy payment or unfair dismissal compensation, whereas a woman who is dismissed between those ages can also get that, but she can also get a state pension, shows that the provisions are tainted with sex discrimination."
However, he feels that the point is somewhat "far-fetched" for a number of reasons. "The main one being that this decision doesn't relate to people between 60 and 65 - it relates to people over 65; and in any event, the pension age is expressly allowed under EU law," he continues. Whichever way the appeal goes, as the academic points out, "the real issue is not that statutory upper age limits and compulsory retirement represent sex discrimination, but that they amount to age discrimination. As such, neither is likely to survive for long," he reckons.
But Quain points out that the Rutherford hearing is likely to go to the ECJ for a second reason, as it will provide some clarity in the law on how groups of people should be measured in indirect discrimination. It was argued that there were approximately twice as many men at 65 years as women who are in work or who want to work, "therefore any age bar has a far greater impact on men than it does on women, and that constitutes indirect sex discrimination", he says. It was an analysis of the statistics that supported such an assertion that took up much of the tribunal's time.
"One of the key points of the case is what you should be measuring," Quain explains. The Government wanted to look at the number of men over 65 who were working as a proportion of the workforce as a whole, and then compare that with the proportion of women. By contrast, the applicants sought to compare the proportion of men who were not able to get this protection with the proportion of women.
"The tribunal eventually said they didn't think it was right to look at the workforce as a whole, because an 18-year-old couldn't be said to be affected by a rule that only kicked in when he or she was 65 years old," the solicitor continues. Instead it looked at people between the ages of 50 and 70, "because it seemed logical that a person started to think of retiring within that age-band".
It remains to be seen what the Government will do in terms of framing its age discrimination legislation, but until then the Rutherford appeal is due before the EAT on 22 May.