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Recent UK legislative changes mean assumptions about when an employee will retire can no longer be relied on, particularly in the current financial climate

Age discrimination has been unlawful in the UK since 2006, but until 2011 there was a legal default retirement age. Since its abolition, the majority of employers have simply scrapped their mandatory requirements and are no longer forcing staff to retire.
This means that employers have found that older employees may carry on working after they had been expected to leave. The safest approach for any employer is to manage employees individually based on their own capability and performance in a job. If this means that a long-serving employee’s time ends in acrimony rather than with dignity, that is the difficult by-product of avoiding discrimination on the grounds of age.
Whether it is possible for any UK employer to have a compulsory retirement age remains uncertain. Those who wish to keep a retirement age must demonstrate that forcing all employees to retire at that age is justified, that is it is a proportionate means of achieving a legitimate aim.

Uncertainty

The uncertainty of this test is probably why most employers have shied away from relying on it. A retirement age of 65 for recorder-level judges was held to be unlawful in Hampton v Lord Chancellor, and in football, retiring assistant referees at 48 was also held to be discriminatory in Martin v Professional Games Match Officials.
However, the key legal authority -- Seldon v Clarkson Wright & Jakes -- held that a partnership’s retirement age of 65 could be justified. Retirement was legitimate to ensure staff retention and workforce planning. More controversially, the country’s Supreme Court accepted that a legitimate aim could be retiring partners as a way of avoiding the need to expel them by way of performance management. However, as this was a case about a small partnership, reliance on its own facts means it does not provide much reassurance to larger employers with different workforces.
 In practice, age discrimination in the workplace can be less overt. Workplaces that consider themselves modern or dynamic will frequently tend towards having younger staff. Certain industries, such as advertising or media, are perceived as being those where older workers are pushed out and, in particular, older women. Where older employees are jettisoned by their employer-- and particularly where there is a lack of older workers in the workforce generally -- employee advisers are now frequently alleging that age is a factor.

Training costs

Age discrimination can also arise from other alleged detriments, such as access to training and promotion. A recent study suggests business leaders are happy to invest in training projects for younger members of staff, but more reticent to do so for employees older than 60. This can be discriminatory, but as age discrimination can potentially be justified it is harder for employers to assess the position.  
Justification requires a balance, which means that an employer can be justified in refusing to provide a worker close to retirement with training that is expensive and may take several years to complete. However, as employees stay in work longer it becomes harder to have a consistent line and, in practice, most training provision is neither that expensive nor that dependent on any employee remaining in the job long-term.
There are also traps for the unwary. The Supreme Court held in Homer v Chief Constable of West Yorkshire Police that it is discriminatory for an employer to require a degree for an employee to qualify for a newly created role, where that precluded employees from gaining that role when they neither had a degree nor the time before retirement in which to obtain one.

Higher awards
 
All workers can potentially claim age discrimination, comparing their age group with that of others. There have been claims from younger workers; however, claims from older workers can involve higher risk for employers because those workers feel less able to find new work in a tough job-market and, if they cannot do so, their losses are greater (meaning a higher award).
Many employers are now grappling with the challenge of asking employees to leave with dignity when retirement is no longer an option. Some employees will remain invaluable to the business no matter what their age, but there are others whose ability and desire to do the job will have left long before they choose to do so.
It is generally accepted that in the future employees will have less pension provision and will only gain access to it at a higher age. As employees feel less financially able to stop working, managing older workers that are assessed no longer to be up to the job will become an even more frequent challenge for employers.

Posted by:

Phil
Allen

30 January 2013

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