Currently, the law on both unfair dismissal and statutory redundancy pay contains a rule excluding claims where an individual is aged over the normal retirement age. In the absence of a normal retirement age, employees aged over 65 have no protection against unfair dismissal or entitlement to statutory redundancy pay.
Employment Alert No. 46 "Compulsory Retirement Ages at Risk" (sent on 11 September 2002) reported that in the conjoined cases of Rutherford v. Town Circle and Bentley v. DTI, an Employment Tribunal held that these upper age limits constituted indirect sex discrimination against men (as more men than women were working or seeking to work beyond the age of 65) and were therefore unlawful.
The EAT has overturned the Employment Tribunal's decision.
The EAT held the Tribunal had selected the wrong pool when looking at whether or not the age limit had a disparate impact on men. In addition, the Tribunal had been wrong to find that the age limit was "tainted with sex discrimination" by being linked to the state pension age, which is different for men and women. This differential is not unlawful under Community law, and in any event these appeals were not connected with the state pension.
What does this mean for Employers?
Employers can, for the time being, still rely on the rule that employees over normal retirement age, or if none, over 65, cannot claim unfair dismissal or a statutory redundancy payment.
However, employers should bear in mind that the Government is currently consulting on the introduction of age discrimination legislation on 1 October 2006. The consultation period ends on 20 October 2003 and draft regulations are expected in the first half of 2004. Amongst the current proposals, the Government is considering:
· Making compulsory retirement ages unlawful, except in exceptional circumstances where the employer is able to justify a compulsory retirement age.
· Allowing a default retirement age currently proposed as 70, where employers will be able to retire their employees compulsorily without having to justify their decision;
· Amending the current upper age limit for bringing a claim for unfair dismissal to either the employer's normal retirement age, (which would have to be justified if under the default age), or in the absence of the normal retirement age, the default age.
· Removing the upper age limit for entitlement to a statutory redundancy payment altogether, or amending it to either the default age or to the employer's normal retirement age (which would have to be justified if less than the default age).