In last month’s newsletter we reported on proposals to abolish the state retirement age of 65. This view has been reinforced by a policy briefing paper published by the Equality and Human Rights Commission on 25 January which proposes total abolition and a statement to Parliament made by the Solicitor-General on 28 January in which it was indicated that the default retirement age is “probably past its sell-by date”.
There is still a great deal of misunderstanding about the operation of the default retirement age under the current law, even among employment lawyers. In reality “default retirement age” is a misnomer because it is no longer enough to terminate employment merely because someone has reached age 65. Rather, there is a procedure to be followed which requires a “constructive dialogue” to take place between employer and employee before retirement is implemented. If an employer has a standard procedure which provides that employees will usually retire at age 65 there is still a requirement to follow the consultation process but, in general, retirements implemented within the standard procedure will not be unfair. However, it is vital to remember that you get one bite at the cherry. For example, it would be quite wrong to be selective in deciding to whom the “default” retirement age applies. It takes only a little thought to realise how vulnerable such an approach is to accusations of unfairness. Similarly, considerable caution has to be exercised when implementing retirements for those above 65. While retirement dismissals for those aged under 65 are in most circumstances automatically unfair, those in respect of employees over 65 remain potentially unfair. Take the example of an employee who has requested to work beyond 65 and the request has been granted. How will the employer be able to say that it has acted fairly in requiring retirement at, say, 66 or 67 if there has been no material change in employment circumstances so that the only relevant change is that the employee is a year or two older? – age discrimination on a plate! It is also worth bearing in mind that these claims can be horrendously expensive. The employee will no doubt argue that, given the chance, they would have gone on working for years and, of course, since we are dealing with discrimination there is no limit on the amount which can be awarded. Equally, other than in cases of sudden degeneration, it would be a brave employer who takes action to terminate employment based on incapacity if, only a year or so earlier, the employer and employee have agreed that the employee is fit to carry on working.
The removal of a “default retirement age” will certainly not make matters easier for employers but there are a few precautions which can be taken with a view to minimising risk. It is sensible to have a policy or at least a commentary in the staff handbook which deals with retirement in general terms. As long as the principles outlined are adhered to this will encourage consistency. Employers should also take the opportunity of consultation with a view to encouraging employee initiated retirement. Few employees want to carry on working indefinitely and there is nothing wrong with agreeing well in advance with an employee that he or she will continue working until aged, say, 67 or 68, or even older. If employment is terminated in accordance with an agreement made with the employee it is very unlikely to be considered unfair. Above all, employers must avoid knee-jerk decisions and attempts to use retirement as a cover for dismissal for other reasons. We frequently encounter situtations in which an instruction is issued at board level to retire Mr X or Mrs Y as part of a restructure or just to reduce wage costs (older and long-serving employees are generally higher paid). Any dismissals prompted by such an instruction are very likely to result in unfair dismissal as well as discrimination.
In the meantime it is worth considering that age discrimination is age discrimination even if the person subjected to the discrimination is not “old” and there is an age gap of only a few years as demonstrated in the recent case of Achim Beck reported here.
Another example of the potential for confusion has been demonstrated by an MP’s question in Parliament concerning whether a golf club in the questioner’s constituency was right to propose to stop offering reduced rates for pensioners on the basis of its understanding of the Equality Bill. The Solicitor-General’s reply was clear enough: “No…take it from me – it has got it wrong”.
Meanwhile, according to a report in The Sun, the boss of a hairdressing salon in Newcastle has been told that she cannot advertise for a “junior stylist” because this would discriminate against the elderly. Michelle Hilling, 39, commented, “This country has gone completely mad”.