14 July 2003
In employment law the issue of age discrimination is an old one. The validity of the statutory provisions preventing those who are over 65 from bringing employment claims has been mooted since an employment tribunal in the case of Nash v Mash/Roe Group in 1998 refused to apply them. The saga continues today with the Employment Appeal Tribunal deliberating over the same issue in the case of Rutherford and Bentley v Harvest Town Circle.
Back in June 1999, the Government launched a non-statutory code of practice to encourage employers to adopt policies designed to avoid age discrimination in employment. However, it was completely toothless and without any legal status, and employers could and did ignore it in practice. This was a deliberate omission by the Government, as it was reluctant to legislate on the issue, which is not so surprising considering the recognised norms in the employment field.
There is a general acceptance that the older you get the more difficult it is to find new employment. This is taken into account in any unfair dismissal case when the employment tribunal awards compensation. A general principle applies that the younger the employee, the lower the rate of pay. The National Minimum Wage legislation recognises this by maintaining a higher rate of pay for those aged 22 or over.
The reluctance to legislate has now been overtaken by the need to comply with European directives. The first step to putting in place statutory provisions prohibiting discrimination on the grounds of age was taken with the publication on 2 July of the consultation paper 'Equality and Diversity: Age Matters'.
The unions pick up on the issue that, under the new legislation, employees may be expected to work until the age of 70. While for some working beyond 65 might be attractive, for others the right to retire and enjoy free time is equally important. This may just be a red herring, although it is likely that the separate issue of pension entitlement may dictate when an employee leaves work. The fact is that pension funds are failing to materialise sufficient returns by the targeted retirement age. Unrelated to any new legislation, more and more employers are already increasing the age when employees can retire and claim an occupational pension.
The proposed changes may, on the other hand, abolish any default retirement age. Where will that leave employers? Some would say that it would be impossible to plan for future recruitment needs and that administratively it would be a nightmare if in every situation the retirement would have to be justified. However, if a contract of employment terminates in any other way, the employer is expected to follow a fair procedure and show fair grounds for a dismissal.
It has been said that it would be demeaning to an employee with long service to be subjected to dismissal procedures and that employees of a certain age should be allowed to retire with grace. However, if an employee is no longer able to do their job because of health reasons, the reasonable employer doesn't just launch into a capability procedure - the performance issue would be discussed with the employee and the options considered. If the employee feels fit enough to continue work, then following medical assessments a final decision would be taken. Is that wrong? The law requires that the process is followed for every employee below normal retirement age. There appears to be no valid reason why a person over a certain age should not be afforded the same treatment. The fact that one day an employee is treated as a valued member of the workforce and the next day is surplus to requirements is not a palatable one in the modern age.
Whichever option is finally selected, there will be huge cultural changes; and if employers get it wrong, there will be serious financial consequences. However, the same complaints were made when maternity rights were introduced.
Times move on and attitudes change: 75 years ago women were allowed to vote for the first time on the same terms as men - today such inequality would not be condoned for a moment. Will our contemporaries in 75 years wonder why our society ever condoned the removal of rights because of a person's age?
Clive Garston was assisted by Halliwell Landau London head of employment Tola Ogundimu with the week's Opinion