UK: Age Discrimination Two Years On

Age discrimination has now been a part of UK employment law for two years, with the Employment Equality (Age) Regulations (Regulations) coming into force on 1 October 2006.

2007 did not see the influx in claims expected, despite a recent survey carried out by the Age and Employment Network finding that nearly all jobseekers over the age of 50 experience age discrimination. Over the last year there has been a threefold increase in the number of age discrimination claims and there is now a range of judicial guidance on what constitutes discriminatory conduct. The common theme emerging from the cases is the need for employers to clearly define their legitimate aims and demonstrate that their PCP's (provision, criteria or practices) are a proportionate means of achieving those aims.

Age discrimination: What is protected?

The Regulations are designed to implement the age related provisions of the European Equal Treatment Framework Directive (the Directive). The Directive prohibits discrimination on the grounds of age and the Regulations essentially make it unlawful to discriminate against an employee on the grounds of age throughout the entire employment process from recruitment to termination. Age discrimination applies to all age groups and includes:

• Direct discrimination: where an employee can show that they have been treated less favourably than an employee of a different age on the grounds of their age.
• Indirect discrimination: where an employee can show the employer has applied a provision, criteria or practice that puts them (and people within their age group) at a disadvantage compared to employees of a different age group.
• Harassment: where a person is subject to unwanted conduct which has the purpose or effect of violating their dignity or creating an intimidating, hostile, degrading, humiliating or offensive environment.
• Victimisation: where an employee is treated less favourably as a result of doing a protected act, which includes bringing proceedings or giving evidence in proceedings under the Regulations.

There are however, exceptions to these provisions. Unlike any other UK anti-discrimination legislation, direct age discrimination is capable of being justified. In the UK, potential discrimination can be objectively justified if an employer can demonstrate the discriminatory provision, criteria or practice is a proportionate means of achieving a legitimate aim.

These exceptions have been the focus of recent cases, at both a European and national level.

OBJECTIVE JUSTIFICATION

Advertising based on age unjustified: Rainbow v Milton Keynes Council

The Tribunal recently found that advertising, based on length of experience, can constitute unjustified indirect discrimination.

Ms Rainbow, aged 61, was employed as a part time teacher. Her employer advertised internally and externally for a full time teaching post, stating "it would suit candidates in the first five years of their career".

Ms Rainbow applied for the position. She had 34 years teaching experience and was on a higher pay scale than the outgoing employee. Ms Rainbow was not shortlisted, despite having experience teaching the relevant year group. The successful candidate had approximately four years' teaching experience and was on a salary approximately £7,000 less than the full-time equivalent for Ms Rainbow.

Mrs Rainbow claimed both direct and indirect age discrimination. The Council admitted that cost had played a part in its decision arguing it was justified and that the school's financial constraints should be taken into account.

The Tribunal concluded that there was unjustified indirect discrimination on the facts. The provision, criteria or practice of employing candidates in the first five years of their career, although applied to all candidates could put people of Mrs Rainbow's age (who were likely to have more experience) at a disadvantage.

The Tribunal found that a decision based on financial reasons could be a legitimate aim. In these circumstances, however, the Tribunal found that the employer had failed to demonstrate that cost considerations were objectively justified. The Tribunal set a high threshold for cost being a justification and explained that before financial constraints can justify discrimination the employer must be more or less compelled to discriminate.

Requirement to have qualifications justified: West Yorkshire Police v Homer

The Employment Appeal Tribunal (EAT) recently found that a requirement to hold a law degree did not amount to indirect discrimination, overturning the Employment Tribunal decision.

Mr Homer, aged 61, worked as a legal advisor for the Police National Legal Database. During his employment, the West Yorkshire Police established a new career structure which meant that to move to the top band of the new career structure (and obtain a higher salary) employees were required to hold a law degree.

Mr Homer did not hold a law degree. When he commenced employment, to qualify as a legal advisor he had to:

• Hold a law degree;
• Hold the equivalent of a law degree; or
• Have exceptional experience/skills in criminal law, combined with a lesser qualification in law.

Mr Homer met the third requirement. However, following the review and implementation of the new structure, Mr Homer was not able to reach the top grade. Mr Homer claimed age discrimination on the basis that at 61 he could not re train to obtain a law degree before his retirement at 65 and was therefore disadvantaged. Mr Homer did not allege indirect discrimination on the basis that younger people were more likely to have higher education and therefore would have been more likely to hold a law degree which may have had a different result.

The Employment Tribunal found there was unjustified indirect age discrimination and the requirement to hold a law degree placed employees between 60 and 65 at a disadvantage.

The EAT overturned this decision and found there was no age discrimination:

• There was no particular disadvantage for employees aged 60 to 65.
• All employees, irrespective of age were treated the same. All employees were required to hold a law degree and it was not something required only for those over a certain age.
• In principle, it is no more difficult for an older employee to obtain a law degree than a younger employee.
• Any improvement an employer gives will benefit older workers for a shorter period than younger workers. That in itself does not amount to age discrimination.
• Any disadvantage to Mr Homer was an inevitable consequence of age, but it is not age discrimination.

The EAT did however comment that had it found there was discrimination, it could not be justified as a proportionate means of achieving a legitimate business aim.

Attempt to avoid enhanced pension unjustified: Wooster v LB of Tower Hamlets

Mr Wooster, 49, was employed by the housing department of Tower Hamlets. In 2001, his role was deleted and he was given a temporary secondment to a social landlord with the intention to find him a permanent role. No permanent position was found, and Mr Wooster was given notice of redundancy.

The social landlord still had secondment work available and offered to retain Mr Wooster until July 2007. This would have taken him past his 50^th birthday, allowing him to retire with a pension from the council together with a lump sum. The Council declined the offer and stated "if you are going to pay his salary you can pay his bloody pension when he is 50".

Mr Wooster claimed age discrimination and the Tribunal found there was direct discrimination on the basis someone who was not 49 would have been treated differently if there was no objective justification for doing so on the facts.

RETIREMENT

The Heyday Opinion

The legality of the retirement age of 65 is currently under review as a result of a challenge brought by the National Council on Ageing (also known as Heyday) to the European Court of Justice (ECJ). The retirement provisions take the objective justification defence further and provide a defence to age discrimination if the employer requires an employee to retire upon reaching 65 and the statutory retirement procedures are followed. This means, employers do not need to demonstrate that retiring an employee at 65 is a proportionate means of achieving a legitimate aim.

Heyday argued that this aspect of the Regulations is incompatible with the criteria in the Directive justifying age discrimination. The Directive permits difference in treatment on the grounds of age if it is "objectively and reasonably justified by a legitimate aim, including legitimate employment policy, labour market and vocational training objectives and if the means of achieving that aim are appropriate and necessary".

The Advocate General has rejected Heyday's challenge and confirmed the Directive does permit national states to objectively justify their retirement age. The Advocate General's key recommendations are:

• National law can include a justification defence and member states do not need to list the types of treatment that may be justified. This essentially means that whether a PCP can be objectively justified will depend on the circumstances of the individual case.
• The retirement age is compatible with the Directive, provided it can be objectively justified. It is up to the UK courts to assess whether the objective justification test is met here.

The challenge now needs to be decided by the ECJ and it is likely the ECJ will follow the Advocate General's opinion. If it does the UK courts will then have the opportunity to consider whether the default age can be justified and the UK government will need to demonstrate why a national retirement age is necessary in terms of social and employment policy.

Retirement provisions: how do they apply to individuals who are not employees?

The default retirement age of 65 does not apply to office holders or partners and the Tribunal has recently considered the position of retirement of non employees. Essentially, to avoid a claim of age discrimination when retiring someone who is not an employee the employer is required to demonstrate that the retirement is objectively justified.

Two recent examples of the Tribunal considering such circumstances and coming to different conclusions are the decisions of Hampton v Ministry of Justice and Seldon v Clarkson Wright and Jakes. The Employment Appeal Tribunal has reviewed the decision in Seldon v Clarkson Wright and Jakes and issued its decision in December 2008. The case has been referred back to the Tribunal, leaving the question open.

Retirement not justified: Hampton v Ministry of Justice

Mr Hampton was a recorder (an office holder) with the Ministry of Justice and the default retirement age did not apply to him. When Mr Hampton reached 65, the Ministry of Justice had to demonstrate that his retirement was objectively justified to avoid a claim of age discrimination. The Ministry argued that the retirement was objectively justified on the basis that they needed to create vacancies for new blood and give younger recorders more experience.

The Tribunal rejected these arguments and found that in these circumstances, the suggested approach was neither proportionate, nor did it inevitably identify a legitimate aim, because:

• Vacancies could be created by other methods, for example, recorders moving to become judges or Recorders could be removed for not sitting a minimum number of days;
• The requirement for new blood conflicted with the Ministries' plan to reduce the number of recorders by 10% over 15 years; and
• Younger recorders could gain more experience by rearranging the listing arrangements for cases.

Retirement justified?: Seldon v Clarkson Wright and Jakes

Mr Seldon was a partner in a law firm and was compulsorily retired when he reached 65 in accordance with the terms of the partnership deed. The partnership deed also permitted partners to stay on past 65 with agreement of the partners. Mr Seldon offered to continue and perform consultancy work following his retirement. The firm declined the offer. . Mr Seldon indicated he intended to raise an age discrimination claim. The firm proceeded to compulsorily retire Mr Seldon in accordance with the partnership deed.

The Tribunal concluded the retirement provisions were justified for the following reasons:

• To ensure associates were given the opportunity for partnership and in turn ensure staff retention.
• To facilitate planning of the partnership and workforce having a realistic long term expectation of when vacancies will arise; and
• Limiting the need to expel partners for poor management thus contributing to the congenial and supportive culture of the firm. In this respect, the Tribunal accepted that partners over 65 would not make the same performance contribution younger partners.

The EAT heard submissions from the parties, the Equality and Human Rights Commission and concluded the Tribunal was entitled to find that the principle of compulsory retirement was justified. The EAT accepted that the first two first two objectives and the objective of achieving collegiality were justified. However, the EAT found the partnership had not established they were justified in fixing that age at 65 on the basis that performance would drop off at 65. There was no evidential basis for this assumption and the EAT did not accept this was reasonable or self evident. On this basis, the EAT was unsure what conclusion the Tribunal would have reached if it had only considered the first two objectives and remitted the case to the Tribunal for reconsideration.

CONCLUSION

The key message is the importance of forethought to indentify the relevant legitimate aim and to test whether the approach is proportionate. This requires employers to turn their minds to why a certain practice is being implemented before doing so. Tribunals are focusing closely on the issue of proportionality; they are testing whether in fact there is evidence to demonstrate that the employers approach is genuinely no more discriminatory that is necessary and that there were no alternatives to the employer's decision. Employers need to ask questions and have answers: Why do we need this? What are we trying to achieve? Can we do this differently to achieve the same result? If not, why not? Employers who do so will be in a much stronger position to justify their actions, and defend potential age discrimination claims.

Julia Hurren
Dundas & Wilson CS LLP
Julia.hurren@dundas-wilson.com

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.