Curb on Age Discrimination Slips in the Back Door

The recession has started to affect you. Your profits are down. You decide that you need to cut costs. One of your employees is older than the others, he’s 66.  He’s still performing reasonably well but he’s a bit long in the tooth for the image that you like to present. You decide that now would be an ideal time to let him go and you can say that it’s a redundancy situation.

You’d better just check the procedure with Human Resources first. You are told that there is a statutory upper age limit for claims of unfair dismissal and redundancy payments and it’s 65. Excellent, you’ll pay him notice and holiday pay and there is no financial risk involved if you dismiss him. You don’t even have to pay him redundancy.  He can’t make a claim of unfair dismissal or claim a redundancy payment because he’s too old.

Or, perhaps not. On 22 August [reported on the Workplacelaw Network, 27 August 2002] an Employment Tribunal at Stratford issued a decision in the cases of Rutherford and Bentley -v- Towncircle Limited and the Secretary of State for Trade and Industry that an Employment Tribunal did have jurisdiction to hear the applicants’ complaints (of unfair dismissal and redundancy respectively) despite the fact that each was over 65 at the time of their dismissals.

What! How did that happen? You thought the rule is no claims after age 65.

Correct, that’s what the Employment Rights Act provides but the Employment Tribunal pointed out that they have a duty to disapply any national measure that conflicts with the treaties of the EEC.

But didn’t you read somewhere that the Government had until 2006 to bring in national laws to prevent age discrimination?

Right again, but these claims were allowed to proceed on the basis of indirect sex discrimination. The Employment Tribunal noted that there requires to be equal pay for equal work as between men and women. Compensation for unfair dismissal and redundancy is “pay” for those purposes. The statistics the Employment Tribunal looked at showed proportionately more men than women are affected by the upper age limit since more in the relevant age group are either working or want to work.

It would have been possible to avoid the conclusion that the upper age limits were discriminatory if the Tribunal had been satisfied that they were justifiable. But they weren’t. They took the view that upper age limits were linked to the age at which employees could access their state retirement pension. That policy itself was inherently discriminatory because women can access their pension earlier than men so it couldn’t be used to justify the upper age limits for unfair dismissal and redundancy payments.

So should you be reconsidering dismissing your employee on the grounds of redundancy?

Possibly. You should certainly review the issues critically and don’t assume that individuals who have reached 65 will continue to have no right to claim unfair dismissal or redundancy payments. Whilst it is possible that the Employment Tribunal decision will be appealed the writing now seems to be on the wall for the current upper age limits. This affects a host of issues including retirement policies, redundancy and dismissal procedures to name a few, all of which may also benefit from review following this decision.
This document is for general guidance and research purposes only, and does not purport to give professional advice. Please check the date at the top of the article; the Workplace Law Network retains historic articles for general research.