“In job adverts, for instance, employers will have to avoid language that may imply that they’d prefer someone of a certain age — adverts asking for energetic candidates in touch with latest thinking may fall foul of the new regulation as they indicate a younger candidate is preferred.”
The new laws will make employers more susceptible to claims from older workers asked to leave when approaching 65, the default retirement age, says Mayer, Brown, Rowe & Maw. Louise Hobbs, a partner, says: “Employers must ensure that their workplace does not become a breeding ground for any sort of ageism and ensure that employees are well managed so that they do not believe that they are — and are not — discriminated against.”
The laws also affect occupational pensions. In response to concern from the pensions industry and employers, ministers are to delay those provisions to December 1 to give schemes more time to adjust; and there is a short consultation period next month. Kris Weber, head of pensions at Charles Russell, welcomes the delay. Among issues causing the biggest headaches, he says, are ill-health, children’s and death benefits; whether employees can accrue pension benefits just because they have reached a certain age; and early and late retirements. But he cautions: “The delay is for two months only — not a long period of time.”
Below, two experts examine the implications of the ageism laws
OPPONENTS of Tony Blair are finding it harder than they would like to be rid of their leader. But after May next year, the Prime Minister would — in law at least — be almost impossible to oust. The age discrimination laws that came into force last Sunday give older workers, including ministers appointed by the Crown, the right to claim age discrimination and purport to give them the ability to contest their retirement.
It will now be almost impossible to impose retirement on staff aged less than 65. An employer would have to show that the lower retirement age was “objectively justified”. Except for airline pilots, the consensus is that this will be hard to do. The generation that witnessed their bosses taking early retirement may feel that they have been dealt a cruel blow by this piece of legislation. The villa in Spain or the allotment may still beckon, but many years later than hoped.
Employers are probably none too happy either. Staff who have been compassionately left to “serve out their time” until the company’s retirement age of, say, 60, will now be a burden for another five years. That is, unless human resources devises a strategy to performance review, reprimand and expel. Alas, redundancy, once a useful tool to dignify elderly dismissals, is likely to be subject to challenge under the age discrimination rules. A 61-year-old will probably find it easy enough to convince an employment tribunal that his age was a key factor in selecting him for redundancy rather than the 35-year-old, particularly if he would already have been retired had not the age discrimination regulations come into force.
What is perplexing is that the rights given to employees under the new retirement provisions do not include a right to continue working. The legislation, dumbed down after several public consultation exercises, merely gives the employee the right to request to remain in work. But employers have carte blanche to refuse that request. They do not have to have grounds or fabricate reasons. A straight “no” will suffice.
If the “right to request” is a vain cry in the wasteland of retired souls, why then should employers be worried? It is because the retirement provisions are a trap for the unwary. Get it wrong and employers face a claim of up to eight weeks’ pay (capped at £290 a week) and automatic unfair dismissal. Get it partially wrong and the employer may have some chance of successfully defending the claim. In addition, after April 1 next year, employees will be regarded as still employed even if they have been presented with their gold watches, until, however flawed, the process is completed. Gordon Brown may therefore find himself sharing the podium with Tony Blair if the retirement process is not followed.
Many employers have argued that this is red tape run riot. Heyday, a working rights group backed by Age Concern, is seeking a judicial review of retirement provisions of the age discrimination regulations in the High Court, on the basis that they do not properly implement the EU directive. It anticipates getting the go-ahead before Christmas, with the full hearing next year. What the regulations mean as they stand is that a justified and well-considered retirement dismissal will be undefendable if the employer messes up the process. Whereas an employer whose decision is completely arbitrary may win — provided the correct notices were issued within the specified-time limits and lip service given to the employee to have his say in a meeting and an appeal hearing.
Worse still for employers is that it is not only their ageing employees that they have to worry about. While the retirement rules apply only to employees and parliamentary staff, terminating self-employed consultants and “letting go” older non-executive directors, office holders or partners, may also bring them face to face with a claim for age discrimination. Their get-out-of-jail card is convincing an employment tribunal that their decision was objectively justified. Only time and case law will show how effective this card will prove to be.
The retirement rules and age discrimination provisions may lead to a new genre of claimant. The sex-in-the-City cases notching up £1 million-plus awards for women subjected to harassment and bullying may be replaced by already wealthy pale stale males who seize upon the age discrimination regulations to augment their retirement pot. And indeed why not? A claim for age discrimination could net awards for salary and bonus calculated on the basis that they would have remained employed until 65. They are not likely to get another job and are therefore free of any fear of market blacklisting or a bad reference. Other than paying their own legal fees, they are unlikely to face a claim for costs from the employer, so, they may reasonably ask themselves, what have they got to lose?
The author is a partner and head of the employment department at Howard Kennedy
