Age Discrimination Law
London:
One Crown Court
Cheapside
London
EC2V 6LR
T: 020 7329 9090
F: 020 7329 5050
Reading:
Sovereign House
Vastern Road
Reading
RG1 8BT
T: 0118 959 6839
F: 0118 956 1749
Canary Wharf:
Level 10
One Canada Square
London
E14 5AA
T: 020 7042 7200
F: 020 7042 7211
www.doyleclayton.co.uk
Age Discrimination Law
1.
Introduction
1.1
The current law on age discrimination is found in the Equality Act 2010 (the “Equality
Act”), which came into force on 1 October 2010. Age discrimination has been unlawful in
Great Britain since 1 October 2006, when the Government introduced the Employment
Equality (Age) Regulations 2006 (the “Regulations”) to give effect to the EC Equal
Treatment Framework Directive 2000 (the “Framework Directive”).
1.2
Age discrimination took a while to take hold but there has been a big increase in age claims
brought in the Employment Tribunal in the last two to three years, and some high profile
discrimination claims which have brought the issue into the public eye. For example, exCountryfile host Miriam O'Reilly won her case against the BBC on the grounds of ageism.
The 53-year-old claimed she had been unfairly dropped from the rural affairs show when it
moved to a prime time Sunday evening slot in April 2009. The Tribunal heard allegations
that O'Reilly had been asked if it was "time for Botox" and was warned to be "careful with
those wrinkles when high definition comes in".
1.3
This summary has been written from the viewpoint of an employee/employer relationship.
Many of the cases referred to below were considered under the old law, before the
Equality Act. However they are still relevant under the current law. We will have to wait
some time for an equivalent body of cases under the Equality Act to build up.
2.
Basic Structure
2.1
One of the main purposes of the Equality Act was to harmonise the law on discrimination,
bringing together the different strands. The Equality Act centres around nine protected
characteristics, of which age is one. Individuals are protected against direct and indirect
discrimination, as well as harassment, and victimisation. It is also unlawful to instruct,
cause, induce or aid someone to discriminate against, harass or victimise another person,
or to attempt to do so.
-2-
www.doyleclayton.co.uk
2.2
The most important difference in relation to age compared to the general structure of
other discrimination laws under the Equality Act is that direct discrimination as well as
indirect discrimination can be justified i.e. it is lawful to discriminate against an individual
where it is a proportionate means of achieving a legitimate aim of the business. This is
very different from other areas, where direct discrimination (for example, race) is unlawful
and cannot be justified.
2.3
Age discrimination protects a wide range of individuals in the workplace, including
employees, agency and contract workers, office holders, those who do work personally, job
applicants, partners, the Police and servants of the Crown, although the protections are
not the same for all. Former employees are also covered. The Armed Forces, unpaid office
holders and unpaid volunteers, are excluded.
2.4
Age discrimination applies to all parts of the employment relationship, including
recruitment, terms and conditions, promotions, transfers and training and dismissal.
2.5
How old do you have to be?
The basic principle is one of non-discrimination on grounds of age, which means any age.
We tend to think of age discrimination protecting the old, but this is not what the law says,
and it does not simply cover workers over a certain age (as in the United States). This
perception is beginning to change - in the last few years there have been a few claims
where younger workers have been successful – for example, showing that they were
dismissed for being thought “too young” to do their job. In Wilkinson v Springwell
Engineering Limited (ET 2007), Miss Wilkinson was dismissed on grounds of capability. She
was 18 and Springwell made a number of inaccurate, stereotypical assumptions about her
abilities based on her age. Springwell did not put forward any arguments to objectively
justify their actions and Miss Wilkinson won her claim for direct discrimination.
2.6
What is age?
To bring a complaint of age discrimination, the individual first needs to establish their age.
For the purposes of the Equality Act, this is done by referring to their “age group”. An “age
-3-
www.doyleclayton.co.uk
group” is a group of persons defined by reference to age, whether to a particular age or a
range of ages (see further below).
2.7
Occupational Requirement
An “occupational requirement” can apply as a defence to claims of discrimination in
respect of recruitment, access to promotion, transfer or training, or dismissal (that is,
where, having regard to the nature or context of the work, being a particular age or a
member of a particular age group is an occupational requirement). To be able to use this
defence, the application of the requirement must be a proportionate means of achieving a
legitimate aim. This defence is very narrow in practice. In Prigge and others v Deutsche
Lufthansa AG (ECJ 2011), the ECJ held that air safety was a legitimate aim under Article
4(1) of the Directive. However, the maximum age of 60 for airline pilots, set out in the
relevant collective agreement, was out of step with German and international laws, which
fixed an upper age limit of 65 for airline pilots. For this reason, an age limit of 60 was not
"proportionate" and therefore could not amount to a genuine occupational requirement.
2.8
Positive Action
Positive action is permitted in limited circumstances. Where an employer reasonably
thinks that:
2.8.1 persons who share a protected characteristic suffer a disadvantage connected to the
characteristic;
2.8.2 persons who share a protected characteristic have needs that are different from the
needs of persons who do not share it; or
2.8.3 participation in an activity by persons who share a protected characteristic is
disproportionately low;
it is lawful for the employer to take positive action by taking proportionate measures to
overcome a group’s disadvantage, to meet specific needs or to enable or encourage
participation. Separate positive action provisions apply in connection with recruitment and
promotion (see below).
-4-
www.doyleclayton.co.uk
2.9
The Equality and Human Rights Commission (EHRC) Code gives as an example of “different
needs” an employer whose monitoring data on training shows that its workers over the
age of 60 are more likely to request training in advanced IT skills compared to workers
outside this age group. The employer could take positive action by providing training
sessions primarily targeted at this group of workers.
2.10
However, positive action needs to be handled carefully – as it carries with it the inherent
risk that taking positive action in respect on one group (older workers), ends up
discriminating against another group (younger workers). It also requires some analysis of
the employer’s resources to see whether the conditions are met and whether it was
reasonable for the employer to think that there actually was a disadvantage, different
needs or low participation in a certain age group.
Thinking based on stereotypical
assumptions will not be reasonable and is likely to be discriminatory.
2.11
Under the old law, employers were not allowed to take positive action in selection for
employment – they could not recruit someone, or promote them, because of their age or
to address any under-representation. The Equality Act (Section 159) changes this and
makes positive discrimination possible at the recruitment stage – but only to a very limited
extent. Where an employer reasonably thinks that
2.11.1 persons who share a protected characteristic suffer a disadvantage connected to the
characteristic;
2.11.2 participation in an activity by persons who share a protected characteristic is
disproportionately low
the employer can treat the person more favourably in connection with recruitment or
promotion in order to enable them to overcome or minimise the disadvantage or
participate in the activity but this is only where the candidates are as qualified as each
other. If there are two candidates for a job, one, say, in her thirties and one in her sixties,
and there are disproportionately few older workers in the employer’s organisation, then
age can tip the balance in the older woman’s favour but only if the comparative merits of
the two employees are otherwise equal. Otherwise, the employer would be guilty of
unlawfully discriminating against the younger worker and would have no defence. Positive
-5-
www.doyleclayton.co.uk
discrimination in recruitment is possible, but not mandatory - if the two candidates are
equal, the employer can positively discriminate, but does not have to. It will be interesting
to see how many employers try to rely on this provision, and how easy it is. How ready will
a Tribunal be to agree that two candidates were “otherwise equal”, which is a subjective
and uncertain test? And how often will an employer want to put its neck on the line and
try to rely on this very narrow exception?
3.
Direct and Indirect Discrimination, Harassment and Victimisation
3.1
Direct Discrimination
3.1.1
The basic concept of direct age discrimination is that A treats B less favourably because of
age than A would treat other people in a comparable position. This includes discrimination
based on the perception of age, whether right or wrong. This focuses on the employer’s
reason (conscious or subconscious) for the treatment.
This means that any age
requirement for a job or position is potentially capable of amounting to direct
discrimination because of age unless, of course, it can be justified. A minimum age for
someone to be appointed to a particular position, or to be promoted to that position, may
bear no relevance whatsoever to the necessary levels of experience and qualifications
required for the role. When scrutinised, it may appear arbitrary. The same applies to a a
maximum age which disqualifies someone from applying for a job. Other examples of
direct age discrimination could include stereotypical, ageist tendencies (for example, not
recruiting an older applicant into a junior position on the basis of a mistaken assumption
that the older employee would not like to be managed by a younger employee, and/or was
too old to adapt).
3.1.2
An example of direct age discrimination is Baker v National Air Traffic Services Limited (ET
2007), where the respondent Company had a blanket ban on anyone over the age of 36
applying to become a trainee Air Traffic Controller. The Employment Tribunal found that
this was direct age discrimination and could not be justified. The employer was criticised as
it did not approach the issue of the age bar with an open mind and instead worked
backwards by relating evidence to back up its pre-conceived view that the age bar was
justified. This case is also a good reminder that the test for objective justification has two
steps. Not only must there be a legitimate aim, but the means of achieving that aim must
-6-
www.doyleclayton.co.uk
be proportionate. Here, the employer failed at the second step, and was criticised for
failing to consider any other, less discriminatory, alternatives to a blanket age bar, which
might have addressed its concerns.
Whilst the employer had a legitimate aim (i.e.
achieving a high success rate in training, providing an adequate pool of qualified
individuals, allowing for a reasonable period of service after training and also ensuring
safety), there was a lack of correlation between these aims and the blanket age bar.
Although ability may tend to decline over time, this will not be enough to make
stereotypical assumptions about a particular individual’s ability lawful.
3.1.3
The Equality Act makes clear that discrimination is unlawful if it is “because of” age, but
this does not have to be because of the victim’s age. You can be discriminated against
because of someone else’s age (for example, if you are discriminated against because you
have young children).
3.1.4
In order to demonstrate direct discrimination, the individual must identify a comparator.
The nature of age means that identifying the comparator can be more difficult, or more
flexible, than is the case with the other strands of discrimination. Comparisons made
between men and women, for example, are more straightforward – obviously, a
comparator for a man is a woman. With age, we have to make a comparison with another
person of a different age or age group. But what age? Is it correct to compare a 50 year
old to a 45 year old? There are no hard and fast rules as this will depend on the facts of
each case. The explanatory notes to the Equality Act give the example of a protected age
group comprising a group such as the “over-fifties”, or people of a particular age, such as
“21-year-olds”. It is up to the Claimant to specify the age group they want to compare
themselves against. They will need to consider whether their case is best made out by
comparing themselves against a wide age gap (for example, “under 18s”), or a narrow age
group (for example, “people born in 1976”), or even a relative age group (for example
“older than me”). This flexibility means that one person can belong to various age groups.
The EHRC Code gives the example of a man of 86, who would be in all of the following age
groups: “86 year olds” (the narrow, specific end of the spectrum), “over 65s”,
“pensioners”, “senior citizens”, “older people” and the “elderly” (at the wider, looser end
of the spectrum).
3.2
Indirect Discrimination
-7-
www.doyleclayton.co.uk
3.2.1
Indirect discrimination looks at group disadvantage. It occurs when A applies to B a
provision, criterion, or practice which he applies or would apply equally to persons not of
the same age or age group as B, but which puts persons of B’s age or of the same age
group as B at particular disadvantage when compared with other persons, puts B at that
disadvantage and A cannot show that the provision, criterion or practice is a proportionate
means of achieving a legitimate aim.
Indirect discrimination provides protection where
requirements are ostensibly neutral (for example, a requirement for ten years’ experience
which applies across the board, to young and old alike) but which, in fact, have the effect
of disadvantaging employees of a particular age group (as younger people are less likely
than older people to have ten years’ experience).
Another example could be the
requirement to hold a particular qualification.
3.2.2
Indirect discrimination, can be justified. “Last in first out” (or “LIFO”) as a selection
criterion for redundancy, on its own, might indirectly discriminate against younger
workers. The lawfulness of “Last in first out” was considered in Rolls-Royce v Unite the
Union (CA 2009). The Court of Appeal said that, in the particular circumstances of that
case, the use of length of service as a selection criterion in redundancy was lawful. RollsRoyce and Unite had collectively agreed that length of service would be used as a selection
criterion in any future redundancies. Rolls-Royce wanted to circumvent this criterion. In
an unusual move, Roll-Royce decided to apply to the High Court for a determination as to
whether the criterion could be used or if it would be indirectly discriminatory against
younger workers. On appeal, the Court of Appeal decided that the length of service
criterion could be justified and was in fact a proportionate means of achieving the
legitimate aim of securing loyalty and a stable workforce, when viewed objectively. It was
one of a number of criteria used and length of service alone was not determinative.
Ultimately, use of the criterion in this context was fair. This does not mean that length of
service is automatically safe to use in a redundancy selection exercise. If it had been the
only criterion for redundancy and had not been determined with assistance from the
Union, then it is possible that the Court would have decided that the criterion was
indirectly discriminatory and could not be justified.
3.3
Harassment
3.3.1
A subjects B to harassment where A engages in unwanted conduct related to age which has
the purpose or effect of either:
-8-
www.doyleclayton.co.uk
a)
violating B’s dignity; or
b)
creating an intimidating, hostile, degrading, humiliating or offensive environment for
B.
In deciding whether conduct has one of these effects, the Tribunal must take into account
B’s perception; the other circumstances of the case; and whether it is reasonable for the
conduct to have that effect.
3.3.2
When it comes to age, harassment might occur in a number of ways. For example, younger
workers ridiculing someone who is older, or shunning an older worker from work-related
social activities because they regard him/her as “too old” to fit in. Or take the example of
an older manager, who harasses or undermines a much younger worker through bullying
behaviour or commenting about the individual being “fresh faced” or “too young to know”.
Management could also be guilty of harassment if, for example, in wanting to get rid of an
older worker, it embarks on a campaign of criticism, setting difficult (if not impossible)
deadlines, making unwelcome remarks about them, or through isolation or freezing them
out. Harassment can also occur though expressly ageist behaviour, for example, telling
ageist jokes, or making disparaging comments such as “the grey workforce”.
3.3.3
One of the important changes made by the Equality Act was to clarify the position on
association and perception harassment across all the protected characteristics (including
age). The new law makes clear that harassment is unwanted conduct related to a relevant
characteristic. It does not have to relate to the victim’s characteristic – here, their age.
This means that an employee who found ageist jokes offensive (irrespective of their own
age) could claim that they had been harassed – for example, a young employee who took
offence at a lot of jokes and remarks in the office about “old codgers”.
3.4
Victimisation
3.4.1
Victimisation occurs where a person, B, is subjected to a detriment by A because B has
made or intends to make (or is suspected of making or intending to make) a claim or
allegation of age discrimination, or has assisted another in their claim or allegation of age
-9-
www.doyleclayton.co.uk
discrimination. In essence, victimisation is “discrimination by retaliation”. Normally the
employer (or its employees) or former employer will be the culprit, but, conceivably, a
prospective new employer could be liable for victimisation if it refuses to employ someone
because, for example, they gave evidence against a previous employer in a discrimination
case. There is no protection if a person makes allegations or gives evidence which they
know to be false, but a person who complains mistakenly but in good faith is protected.
This should raise a warning light as soon as someone alleges discrimination or harassment
in a grievance or elsewhere, as this could form the platform to go on to claim victimisation.
3.4.2
A detriment in the context of victimisation can take many forms, and has no definition in
the Equality Act. The EHRC Code explains that it is anything which the individual concerned
might reasonably consider changed their position for the worse or put them at a
disadvantage. It gives the examples of being rejected for a promotion, being denied an
opportunity to represent the organisation at external events, being excluded from
opportunities to train, or being overlooked in the allocation of discretionary bonuses or
performance-related awards.
It can also cover grievances such as exclusion and
marginalisation at work. An example of victimisation in the context of age could be that a
senior manager hears a worker’s grievance about harassment on the basis of being the
subject of ageist jokes, and constant references to when he intends to “hang up his boots
and spend time with the grandchildren”. The manager upholds the grievance and directs
the perpetrators to be disciplined. As a result, the manager falls into bad favour and is
denied promotion and shunned by his colleagues. This is likely to amount to victimisation
against the manager. Employers often find it hard to ignore the fact that an employee has
complained of discrimination and, inadvertently can end up (albeit unintentionally)
shunning and excluding an employee or treating him differently. Care needs to be taken to
make sure things continue in as normal a way as possible, as otherwise this could amount
to victimisation.
4
Who is liable?
4.1
If one employee discriminates against or harasses another, the employer will be liable,
although it has a defence if it has taken reasonable steps to prevent such conduct from
taking place. The offending employee may also be personally liable. Employers may also
be liable for actions of their agents and third parties. This can cover employment agencies,
and so care is needed in giving instructions to them to make sure they do not discriminate.
- 10 -
www.doyleclayton.co.uk
4.2
Showing that the employer has taken “reasonable steps” to prevent discrimination and
harassment can be hard. As a starting point, the employer should have an accessible and
up to date Equal Opportunities Policy, and should be able to show a commitment that not
only does it have the written policy, but that this is reinforced with training, which is kept
up to date and refreshed. It should also be able to demonstrate in actions as well as words
that it takes complaints seriously.
5
5.1.
Objective Justification
If a policy or act is discriminatory then, as we have seen above, an employer may be able to
objectively justify its actions. This is likely to be absolutely key in most cases. In order to
rely on justification, the employer must show two things. One, that there is a legitimate
aim (that is, a real business need) and, two, that the discriminatory measure is a
proportionate means of achieving that legitimate aim (which means showing that the
measure is both reasonably necessary in order to achieve that aim and that there are no
less discriminatory means available). Part of this is getting away from and questioning
stereotypical assumptions.
Age needs to be replaced by considerations of relevant
experience, skills, and qualifications for the role.
5.2.
The Equality Act uses the same wording for objective justification for both direct and indirect
discrimination. However, this ignores that the two tests are not, in fact, the same under the
Framework Directive. In Seldon v Clarkson Wright and Jakes (Supreme Court, 2012), the
Supreme Court ruled that when justifying direct age discrimination it is necessary for the aim
relied upon by the employer to be linked to social policy aims. Employers cannot therefore
rely on purely individual business reasons. The aims relied on must be linked to social policy
aims such as distributing work fairly amongst the generations and avoiding disputes with
older workers over fitness to work. By contrast, an employer seeking to justify indirect age
discrimination can rely on their own private business aims.
5.3.
“Legitimate aims” are not set out in the Equality Act and it is for the tribunals and courts
ultimately to decide what can be a legitimate aim. When the Government consulted on the
Regulations, the following examples of legitimate aims were given which are still useful in
giving a flavour of what might pass the test:
5.3.1. health, welfare and safety;
- 11 -
www.doyleclayton.co.uk
5.3.2. facilitation of employment planning;
5.3.3. particular training requirements;
5.3.4. encouraging and rewarding loyalty;
5.3.5. the need for a reasonable period of employment before retirement; and
5.3.6. recruiting or retaining older people.
5.4.
Many age cases at the Employment Tribunal have turned on the question of whether the
discrimination was justified. In MacCulloch v Imperial Chemical Industries PLC (EAT,
2008), ICI used a contractual redundancy scheme, whereby employees received payments
calculated with regard to age. The EAT found that encouraging turnover and facilitating
career progression for other staff are, in principle, capable of being legitimate aims. ICI
argued that one of the aims of their redundancy policy was to cushion older employees
from the effects of joblessness. However, and crucially, it was not required to produce
evidence that older workers find it harder to obtain work than younger workers, and it was
permissible for the ET to draw on its own experience or perception in this regard.
However, in this case, the ET had failed to go on to consider the second part of the test for
objective justification and to consider the proportionality of the means of achieving the
stated aims – i.e. was there a less discriminatory way of achieving the aim? The differential
between the payment Ms MacCulloch received and the payment received by her older
comparators was massive. The ET should have considered whether the differential was
reasonably necessary to achieve the stated aims, or whether it went too far (meaning that
there was a less discriminatory way of achieving the aim). The EAT also commented that
direct discrimination is likely to be harder to justify than indirect discrimination. When the
case returned to the Employment Tribunal, it held that the measures were proportionate.
Changing the scheme to make it less discriminatory would have been detrimental to the
legitimate aims of maintaining a contented workforce and promoting good industrial
relations, which in turn would affect the commercial viability of the company.
5.5.
In Bloxham v Freshfields Bruckhaus Deringer (ET 2008), Freshfields introduced changes to
its partners' pension scheme in an attempt to provide a scheme which was more
financially-sustainable and was fairer to younger partners. Mr Bloxham argued that he was
put at a disadvantage (by £4.5m in income) as a result of transitional arrangements that
had been put in place for partners over the age of 55 and therefore claimed direct and
indirect discrimination. The ET found that, although the arrangements were discriminatory,
they were justified. Freshfields argued that their aim was to reform the pension scheme,
- 12 -
www.doyleclayton.co.uk
which included making the division of the firm's annual profits fairer on younger partners,
and this was found to be legitimate and necessary. The firm had taken detailed steps to
consider the options and achieve the aim, including:

ensuring that lengthy and thorough consultation took place, representations
were given due consideration and queries answered;

seeking legal advice from Leading Counsel with regard to the proposals;

by the end of the consultation period, no less discriminatory alternative had
been identified;

the reforms had been subject to the consent of a two-thirds majority of
partners; and

putting in place transitional arrangements to mitigate the impact of the
change.
It was found that the aim could not have been achieved in any less discriminatory way and
was therefore proportionate.
5.6.
In the case of Swann v GHL Insurance Services UK Limited (ET, 2008), GHL offered a
flexible benefits package to its staff with which staff could purchase benefits such as
private health insurance. The ET held that the provision of that package could not amount
to less favourable treatment on grounds of age. However, the Tribunal went on to decide,
by majority, that if the offer of the health insurance to its staff was age discriminatory, the
company would have been able to justify this as a proportionate means of achieving staff
recruitment and retention. This was another case where the company provided robust
evidence. The Tribunal was swayed by the following:
• GHL wanted to enhance recruitment and retention of staff (note that this might not
justify direct age discrimination now as it may not be found to be related to a social
policy aim);
• GHL sought professional advice in order to identify a package of benefits that fulfilled its
aim;
• GHL surveyed its employees about the benefits which they considered to be most
attractive and used this in order to establish which benefits to offer through the flex
funds. This included health insurance;
- 13 -
www.doyleclayton.co.uk
• The health insurance company used actuarial assessments in order to arrive at the
premiums. This was not decided by GHL.
5.7.
The case of Rainbow v Milton Keynes Council (ET 2008), provides a good contrast and
shows the hurdles employers will have to get over to convince a Tribunal of objective
justification. In this case, the employer was unable to provide such evidence and was
therefore unable to justify its actions. The Council advertised for a teacher and stated that
the role would “suit candidates in the first 5 years of their career”. Mrs Rainbow was 61
years old and had 34 years’ experience. As a supply teacher at the school, she made an
application for the new role. Mrs Rainbow was not even shortlisted for interview and
claimed that this was due to age discrimination. At Tribunal, the Council argued that Mrs
Rainbow would be too expensive to employ and, on this basis, they tried to justify their
actions. However, they did not provide any evidence to support this. The Tribunal stressed
that, whilst cost on its own will not usually be a decisive factor for justification purposes, it
is a relevant consideration. Given the lack of evidence from the Council, the Tribunal
concluded that they had not balanced the cost against the discriminatory consequences of
their actions, which is key.
5.8.
In Martin v SS Photay (ET 2007), the employer tried to justify the forcible retirement on
health and safety grounds of a 70 year old employee who cleaned a medical surgery. The
employer simply thought that the older employee was in a higher risk category for health
and safety, but had not presented any medical evidence upon which to justify its decision.
The employee’s claim succeeded, because the employer had no evidence as to Mrs
Martin’s abilities and had not consulted with her about any health issues.
5.9.
In Pulham and others v London Borough of Barking and Dagenham (EAT 2008), the
Borough operated a scheme whereby those with long service were entitled to extra pay.
The payment was awarded when the employee reached both 55 years of age and had 25
years’ continuous service. When the Regulations came into force, the Borough reviewed
the scheme and felt that it was potentially discriminatory. In consultation with the Unions,
it was agreed that the scheme would be closed to new entrants and those who had
received increments under the scheme would not receive any further. Mrs Pulham had 25
years’ service but she had not reached 55 years of age. She complained that the scheme
was discriminatory and she was entitled to a pay increase from the date the Regulations
- 14 -
www.doyleclayton.co.uk
came into force. The EAT considered that Mrs Pulham had been discriminated on grounds
of her age, but that the ET had not considered correctly whether or not the actions of the
Borough were justified as they had attached too much weight to the negotiations with the
Unions and the fact that the Borough did not have funds set aside to pay for equal
pay/discrimination claims.
These factors by themselves cannot be decisive when
determining whether the discrimination is justified and therefore should not be relied on
by themselves as a means of demonstrating objective justification.
5.10.
Whether costs alone can be used to justify discrimination has been a vexed question. In
Woodcock v Cumbria Primary Care Trust (CA 2012), the Court of Appeal accepted that
case law from the European Court of Justice precludes an employer from relying on costs
alone as a justification for discriminatory treatment. This is known as the “costs plus”
approach. However, the EAT in this case did say that preventing cost alone from being able
to justify discrimination meant that employers, employees and the Tribunal would have to
play an artificial game of looking for the additional factor. In this case, the Council timed
Mr Woodcock’s redundancy dismissal notice to expire before his 50th birthday, when he
would have become entitled to an enhanced pension at an additional cost of £500,000.
The Court of Appeal concluded that this was justified. The additional factor it found here
(in addition to costs savings to meet the “cost plus” test) was to give effect to the Trust’s
decision to end Mr Woodcock’s employment on grounds of redundancy and to prevent
him from receiving a pure “windfall”. This case, does not, however, give carte blanche to
end employment to avoid pension liabilities – it turned very much on its own, unusual,
facts and consultation history leading up to Mr Woodcock being given notice.
5.11.
The EHRC Code also gives a number of good examples of possible justification of age
discrimination. For example, a fashion retailer rejects a middle-aged woman as a sales
assistant on the grounds that she is “too old for the job”. They tell her that they need to
attract the young customer base at which their clothing is targeted. If this corresponds to a
real business need on the part of the retailer, it could qualify as a legitimate aim (although
it is now doubtful whether there is a social policy aspect to this aim). However, rejecting
this middle-aged woman is unlikely to be a proportionate means of achieving this aim; a
requirement for all sales assistants to have knowledge of the product and fashion
awareness would be a less discriminatory means of making sure the aim is achieved.
- 15 -
www.doyleclayton.co.uk
5.12.
These cases demonstrate the importance of clearly indentifying a legitimate aim from the
outset.
Then consideration should be given to whether the treatment or policy is
discriminatory. If so, the employer then needs to go on to consider whether there is
another, less discriminatory means of achieving the same aim. It is essential that proper
analysis of the financial and other considerations is carried out before the policy is
implemented. A Tribunal is much more likely to be swayed by evidence and information
gathered before the policy was put in place than that cobbled together after the event, in
defending an employment tribunal claim. As demonstrated in Swann v GHL (above), it is
often a good idea to obtain external advice and/or the views of the workforce when
deciding on and implementing new policies.
Without this written contemporaneous
evidence, it may prove difficult to demonstrate justification.
6
Recruitment
6.1
Employers must make sure that they do not make recruitment decisions that are directly or
indirectly age discriminatory. This means making sure that recruitment decisions are
specific to the role in question and stand up to objective scrutiny. As mentioned above,
employers can take positive action in recruitment in very limited circumstances.
6.2
As a first step, job descriptions or person specifications should only include requirements
that are necessary to the role. Job titles should show that all applicants are welcome.
Titles such as “office boy” could, unconsciously, suggest that the employer intends to
recruit a younger (male) person and would not welcome applications from, for example,
someone in their 60s.
6.3
Employers should also take care to make sure that person specifications for the role are
not discriminatory. In the age context, it would be direct discrimination to state in a job
description that the post is only open to those under 40. Indirect age discrimination might
be harder to spot. It could be indirect age discrimination to ask for, say, 10 years’
experience, unless this requirement could be objectively justified – not only in the need for
experience, but for ten years’ experience.
Employers should also avoid specifying
qualifications that were not available when some applicants were younger (for example,
GCSEs). This can be dealt with by making sure that any request for GCSEs makes clear that
equivalent qualifications are also acceptable.
- 16 -
www.doyleclayton.co.uk
6.4
Employers should also consider the risk of age discrimination in the arrangements it makes
for advertising its jobs. For example, if an employer’s workforce is drawn largely from one
age group and it recruits mostly friends/contacts of its employees by word of mouth rather
than relying an advertising, this could lead to self selection and the continued exclusion of
older people. The role should therefore be advertised widely, so that older applicants have
the chance to apply and be considered.
6.5
Employers should also check that any adverts do not put off applicants of a particular age
group, referring to “youthful” or specifying that the role would be suitable to those at the
start of their career.
In McCoy v James McGregor & Sons Ltd, Dixons and Aitkens (ET
2007), the use of the words “youthful enthusiasm” in a job advert and the employer’s focus
on “drive and motivation” at interview were used as evidence to support a claim of direct
age discrimination.
6.6
Employers also need to be aware of allowing stereotypes to creep in – for example,
rejecting a candidate because they seem too young, or, at the other end of the spectrum,
too old. Discrimination based on perceived age, as well as on actual age, is unlawful.
6.7
As we have seen, in certain, very limited cases, positive action at the recruitment stage is
allowed. The EHRC Code gives the following example: “The vast majority of workers
employed by a national retailer are under the age 40. Consequently, people over the age
of 40 are under-represented in the organisation. The retailer is looking to open new stores
and needs to recruit more staff. It would be lawful… for that retailer to place a job advert
encouraging applications from all groups, especially applicants over the age of 40.”
6.8
It can help reduce the risk of discrimination (or inference of discrimination) if the section of
the application form used for recruitment or requesting personal information (including
age, or date of birth) is detachable or requested separately so that it is not used when
decisions are made and will emphasise the positive message that the employer really does
not consider that age is relevant to the appointment.
6.9
There used to be an exemption which meant that employers do not discriminate because
of age by refusing to recruit someone who is older than 64 years and six months old or
within six months of the normal retirement age, where such normal retirement age is over
- 17 -
www.doyleclayton.co.uk
65. This exemption was repealed on 6 April 2011, along with the default retirement age
(see below).
7
Service Related Benefits and other exemptions
7.1.
Many employers use length of service when deciding upon benefits. For example, after a
certain period of service, the employee may qualify for extra holiday leave, sick pay, private
medical cover or share options.
The Equality Act contains an exception permitting
employers to provide benefits which reward long service, providing that certain conditions
are met. The reason for this is that, otherwise, younger workers (who are less likely to
have had the opportunity to accrue the qualifying length of service) would be indirectly
discriminated against. A length of service requirement is generally exempt (i.e it will not be
discriminatory) but, where it exceeds 5 years or more, it must reasonably appear to the
employer that, if it disadvantages older workers, it will fulfil a business need. The Equality
Act does not give examples of “business needs” which will qualify for this purpose, but the
EHRC Code says that this could include rewarding higher levels of experience, or
encouraging loyalty, or increasing or maintaining the motivation of long-serving staff. It is
generally considered that the test of “fulfilling a business need” is an easier one to satisfy
than the test of objective justification but the employer will still need to be able to support
its “reasonable belief” with evidence. Ideally, an employer should be able to point to
evidence gathered before any decision is implemented, for example, from monitoring, staff
surveys and focus groups.
7.2.
If employers use a service requirement of less than 5 years, they don’t have to go on to
consider the “business need” test. Length of service can be calculated either by the length
of time doing work at a particular level or length of time in total for the employer. The
employer must choose from the outset which will apply and should keep a clear record of
its decision and of the thinking behind it.
7.3.
Enhanced Redundancy Schemes - There are also exemptions which apply to redundancy
schemes. Statutory redundancy pay is calculated with reference to both age and length of
service and so is inherently age discriminatory on two counts, but this has a special
legislative exemption. There is also an exemption for enhanced redundancy schemes,
which recognises that they often work on similar lines to the statutory redundancy
scheme. This is necessary because the service related benefits exception does not cover
- 18 -
www.doyleclayton.co.uk
benefits provided by virtue of the employee’s ceasing to work, so does not cover enhanced
redundancy schemes. To rely on this exemption, enhanced redundancy payments must be
based on the statutory formula but can include one or more of these permitted changes:
7.3.1 disapplying (or increasing) the statutory cap on a week’s pay;
7.3.2 multiplying the amount allowed per year of service by a factor of more than one;
and/or
7.3.3 multiplying the overall amount by a factor of more than one.
Enhanced Schemes which do not fall squarely within these permitted changes will be
discriminatory unless justified.
7.4.
National Minimum Wage (“NMW”) - A special exemption applies here so that if an
employee is paid below the adult rate of the NMW but at least the relevant NMW in the
young worker groups (sixteen to seventeen and eighteen to twenty-one), they cannot
complain about discrimination, if someone over twenty-two is paid at a higher rate. If a
worker in a young worker group is paid less than someone older than him within the same
young worker group, this must be objectively justified. The exception is narrow and only
applies if the young worker receives less than the adult national minimum wage rate - if a
young person is paid more than the adult rate of NMW, they are entitled to complain of
age discrimination if an older worker is paid more, unless objectively justified.
The
Equality Act also provides that it will not be unlawful age discrimination to pay an
apprentice who does not qualify for the national minimum wage at a lower rate than an
apprentice who does.
7.5.
Life Assurance – There is an exemption which allows employers to cease providing life
assurance at the age of 65. However, this is problematic, as it seems only to apply if the
employer ceases life assurance at the age of 65 on the dot, and not later. This could cause
problems in relation to employees who work beyond 65 and may mean the employer has
to fall back on objectively justifying ceasing cover for these employees. Getting this wrong
could be costly because of the amounts which could be involved.
- 19 -
www.doyleclayton.co.uk
7.6.
Childcare Facilities - The Equality Act introduced a provision making it lawful for an
employer to provide childcare facilities for employees caring for children of a particular age
group.
10.
Retirement Age
10.1
The default retirement age (“DRA”) of 65 was abolished by the Coalition Government with
effect from April 2011 (subject to rather complicated transitional provisions between April
and October 2011). This has meant a sea change in how employers will need to approach
the whole issue of retirement. While there was a DRA of 65, it was lawful for most
employers to force someone to retire if they were at or over the age of 65 and the
employer followed the prescribed “duty to consider” procedure. Special exemptions
meant that the retirement would not be either unfair dismissal or age discrimination.
10.2
The Coalition Government set out its reasons for abolishing the DRA in its Response to the
Consultation called “Phasing out the Default Retirement Age”, saying ““As the structure of
our society changes we have to reappraise fundamentally the important role older people
will play...... A culture change is needed and we believe that removing the default
retirement age is a key step in helping that change take place. Working longer is good for
the economy, for society and for individuals.....It is estimated that, if everyone worked a
year longer, annual GDP could increase by £13bn. We want employers to draw their
workforces from the widest possible talent pool and to make decisions based on merit, not
stereotypes....”
10.3
Does the abolition of the DRA mean employers cannot retire staff at all?
No. Employers need to decide whether to retain a fixed retirement age, or abandon it
altogether. What the abolition of the DRA means is that employers are now required to
objectively justify any contractual retirement age.
If they cannot, any dismissal for
retirement will be unfair and also age discrimination.
Claimants are likely to claim career
long loss in these cases, and so awards could be high.
Employers will also still be able to dismiss older workers fairly for one of the five potentially
fair reasons (conduct, capability, redundancy, illegality, or “some other substantial reason
- 20 -
www.doyleclayton.co.uk
justifying dismissal”). Capability and conduct are perhaps likely to be the most common
grounds relied upon, but care needs to be taken to ensure that relying on these does not
open the door to other claims, such as disability discrimination. “Some other substantial
reason” is also likely to be a popular ground.
10.4
What procedure should be followed?
Employers will also have to show that a fair procedure was followed before retiring an
employee. ACAS’s Guidance (“Working without the default retirement age”) suggests that
a fair procedure would involve giving the employee adequate notice of the impending
retirement and, if circumstances permit, giving consideration to requests by employees to
stay working beyond the fixed retirement age as an exception to any general policy.
Employers should not feel that they cannot discuss the issue of retirement with their
employees. On the contrary, ACAS’s Guidance is that, whatever the age of an employee,
discussing their future aims and aspirations can help identify their training or development
needs and provide an opportunity to discuss future work requirements and how these
impact on the employee. However, in order to avoid age discrimination, it is best to have
these discussions with all employees and not just older employees.
These discussions will need to be handled with care. One purpose served by the DRA and
the “duty to consider” procedure was that they provided a focal point for such
conversations. This framework is now removed completely. Employers will fear age
discrimination and breach of contract claims from mishandling discussions about
retirement. Employees, for their part, may worry about compromising their future in the
business if they show a willingness or desire to discuss retirement.
10.5
What is a legitimate aim in the context of retirement?
As above, objective justification involves the employer showing that its actions were “a
proportionate means of achieving a legitimate aim”.
In the context of retirement, this
means that the employer needs to identify the legitimate aim, that is, the real business
need and as retirement will amount to potential direct age discrimination, the aim will
need to be linked to a social policy aim. Then, it needs to show that the retirement age
- 21 -
www.doyleclayton.co.uk
selected serves that legitimate aim and that it is proportionate to that aim. This demands a
balancing act on the part of the employer to look at the alternatives available, to weigh up
the discriminatory impact, and to decide what is the most appropriate method to serve the
aim in mind.
Employers will need to show, with evidence, why they need a fixed
retirement age at all, why they selected a particular age and whether they applied this
consistently.
While we wait for a significant body of cases on retirement age after the abolition of the
DRA to build up, cases already decided against the backdrop of the DRA may provide some
guidance. Examples of legitimate aims might include: workforce planning; promoting the
recruitment and retention of younger employees; contributing to a pleasant workplace and
protecting the dignity of older workforce by not requiring them to undergo performance
management procedures; avoiding disputes with older workers over fitness to work; and
having an age-balanced workforce (promoting the exchange of experience and innovation,
and the quality of the work). Some of these legitimate aims are surprising, as they seem
inherently to support stereotypical assumptions about age, and should be treated with
caution.
The case of Seldon v Clarkson Wright & Jakes (see above) may provide some guidance. In
this case, a law firm had a contractual retirement age of 65 for partners. The DRA applied
to employees, but not partners, so a requirement that partners retire at a certain age could
be discriminatory in the absence of objective justification. Mr Seldon was a partner and
was compulsorily retired on 31 December 2006, the end of the year in which he reached
65. He wanted to work beyond this, but the Firm refused and he brought a claim of age
discrimination. This case went all the way to the Supreme Court, which ruled that the
Firm’s aims of retaining associates, facilitating work force planning and avoiding the need
to performance manage partners were capable of justifying compulsory retirement.
However, it remitted the case to the Employment Tribunal to consider whether
compulsory retirement at age 65 (as opposed to any other age) was a proportionate means
of achieving these aims.
The Supreme Court said that, when justifying direct age
discrimination, it is necessary for an employer’s aims to be linked to a social policy aim, and
the legitimate aims identified were so linked. However, the Supreme Court judgment is
clear that the aim relied on must be legitimate to the particular employer’s needs.
Employers will need to go beyond a box ticking exercise of saying that aims identified in
- 22 -
www.doyleclayton.co.uk
Seldon apply to their business too – and show that they have identified a legitimate social
policy aim in their business and that this is served by retirement at a particular age.
11.
Conclusion
11.1
Employers should conduct audits of their current and new pay and benefit practices to
eliminate any ageist assumptions, particularly where these are not covered by any relevant
exemption. They should review all employment documentation (for example, recruitment
and promotion policies, equal opportunities statements and policies, appraisal procedures,
conduct and capability procedures, retirement policies and stock option plans and rules) to
look for any references to age and retirement or anything that might tend to show ageist
assumptions. Written polices only go so far, however, and need to be backed up by
effective implementation, including regular training for management and staff.
11.2
Although at present there is no statutory obligation to monitor work practices, employers
may wish to review the age dynamic of their workforce and collect information to assess
age profiles of applications and workers and to ensure there is no problem over access to
training or promotion.
11.3
In 2011-12, Age Discrimination was one of the very few types of claim (along only with
Disability Discrimination and Breach of Contract) where the number of claims did not
decrease. Instead, it increased by 5%, with the highest award being £144,100. Many
expect this trend to continue given the abolition of the default retirement age and rising
levels of redundancy and unemployment. Employers need to audit their existing policies
and practices to avoid such claims and also to defend themselves against any claims which
are brought.
© Doyle Clayton Solicitors
April 2013
- 23 -
www.doyleclayton.co.uk