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Age shall not weary them.

A carriage clock and golden handshake are no longer enough to appease an employee who is dismissed at retirement age against his will. Sue Nickson examines the problem of unfair dismissal because of age

Section 109 of the Employment Rights Act (ERA) 1996 provides that an employee cannot claim unfair dismissal once at or over the normal retirement age for the job. In addition, s.156 imposes a similar restriction on entitlements to a redundancy payment. Despite these conditions, much uncertainty has surrounded the application of these apparently straightforward statutory limitations since a tribunal decided in Nash v Mash Roe Group Ltd in 1998 that they were discriminatory in effect and should not be followed.

In the Nash case it was not alleged that the provisions discriminated on grounds of age, but that they were indirectly discriminatory on the grounds of sex. Indirect sex discrimination occurs when a requirement or condition is applied to both sexes, which in practice excludes substantially more of one sex than the other, and which cannot be objectively justified. Mr Nash persuaded the employment appeal tribunal (EAT) that at the time his employment ended, 67 per cent of those working beyond normal retiring age were men, and the tribunal accepted that this meant that substantially more men than women were the victims of prejudice. On that basis Mr Nash successfully challenged the provisions.

In July this year, Harvest Town Circle v Rutherford came before the EAT and the matter was looked at again. The EAT found in Mr Rutherford's favour on the same grounds as in the Nash appeal. Mr Rutherford had a normal retiring age of 65, but was 67 years old when he was made redundant. He claimed unfair dismissal and a redundancy payment, although on the face of it he was excluded from both by his age.

The EAT found that the statistics relied upon by Mr Rutherford to support the alleged inequality between men and women at retiring age were inadequate. They covered the five-year period before Mr Rutherford's dismissal and included all those who had been at or available for work in any two-week period while over the age of 65. This included those who were self-employed and others who would probably not have been affected by unfair dismissal and redundancy legislation anyway.

Conversely, it did not take into consideration those who were dismissed at the age of 65, or those who had resigned in order to avoid being dismissed. Nonetheless, if the sex discrepancy was anything like as large as that in Nash, it is tempting to conclude that these issues would not have made any real difference had the EAT been willing to take them as at least broadly correct.

Equally, it was found to be unreasonable to expect a small company like Harvest to be able to put forward fully the objective justification points potentially necessary to support important primary legislation. Having ducked the risk of having to find that a piece of primary legislation was unlawful, the EAT allowed the appeal, but its only action was to remit the case back to the tribunal for a rehearing. Further evidence from statistics should be considered at the rehearing, and the secretary of state has been invited to take part and put forward any necessary arguments about justification. One imagines that these might include social policy issues such as ensuring movement at the bottom end of the job market by maintaining turnover at the top.

The upper age limit on claims stays intact for now, but the EAT has done little to remove the lingering uncertainty. It would appear that in the present circumstances the safest course of action for employers is to ensure that something approaching a fair dismissal procedure is followed, irrespective of the age of the employee in question.

However, it isn't clear exactly how a fair dismissal process can take place when the only ground relied upon is age (rather than some age-related issue of health, speed or technical skills). The days of palming off old Joe from the mailroom with a clock, a leaving card and some warm Liebfraumilch within hours of his hitting retirement age may be over, but there is no immediate alternative solution if the employment tribunal in Harvest is correct and those provisions are genuinely unenforceable.

In addition, you should consider the likelihood of further legislation on age discrimination by 2006 under the EU's equal treatment framework agreement, which seems likely to outlaw dismissals on age grounds. Urgent guidance from the higher courts and/or Parliament would be of great assistance to employers and employees alike.

Sue Nickson is head of the National Employment Law Unit at Hammond Suddards Edge
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Title Annotation:age/sex discrimination and the Employment Rights Act 1996
Author:Nickson, Sue
Publication:Financial Management (UK)
Article Type:Brief Article
Geographic Code:4EUUK
Date:Oct 1, 2001
Words:781
Previous Article:Letters.
Next Article:Data to remember.
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