Age is one of the nine protected characteristics under the Equality Act 2010 (EqA 2010). However, in general, there appears to be less awareness about the importance of tackling ageism in the workplace, when compared with racism, sexism, or homophobia.
Although one in three people in the UK report experiencing age prejudice or discrimination, historically fewer age discrimination claims have been brought in the Employment Tribunal when compared with other forms of discrimination, such as race, disability and sex. However, that may be changing. Statistics released by the Office for National Statistics showed that 15,336 employment claims included a complaint of age discrimination between 2020 and 2021, compared to 2,434 claims between 2019 and 2020.
Given that onethird of today’s workforce in the UK is aged over 50, age discrimination should be a significant concern for employers. This article addresses the following key issues for employers managing an aging workforce:
- Why do we need to tackle workplace age discrimination?;
- Mandatory retirement ages;
- Managing conversations about retirement;
- Ageist assumptions; and
- Disguised redundancy dismissals.
Why do we need to tackle workplace age discrimination?
Unemployment amongst over-50s has come under the spotlight in recent months, with Jeremy Hunt, the Chancellor, highlighting the impact of the “economically inactive” on the UK economy. The Government has estimated that the number of people who are no longer in work since 2019 has increased by 630,000. This group is partly made up of the over-50s who took early retirement during the pandemic. Statistics published by the Department for Work and Pensions recently show that the employment rate for 50 to 64-year-olds is not yet back to pre-pandemic (2019) levels. Meanwhile, UK employers are facing the biggest talent shortfall on record.
It had been assumed in some quarters that many over-50s no longer want to be in work, but a national survey of 4,000 over-50s published in November 2022 revealed that a third of workers felt forced to retire earlier than they would like to because of ageism.
Tackling age discrimination has become important for older workers, the state, and employers.
Mandatory retirement ages – where does the law stand?
The default retirement age, which allowed employers to impose a compulsory retirement age of 65, was scrapped in April 2011, meaning that requiring an employee to retire at a fixed retirement age will normally amount to direct age discrimination. However, employers can still legally impose a mandatory retirement age if it is “a proportionate means of achieving a legitimate aim”.
For a mandatory retirement age to be lawful, an employer must show they have a legitimate business reason for imposing it, and that the means deployed to achieve it were proportionate.
Workforce planning and facilitating career advancement for younger workers are examples of aims which Employment Tribunals have found can legitimately justify the mandatory retirement of older workers. Employers must demonstrate that the aim is legitimate in the particular circumstances of the business concerned. This was highlighted in the Supreme Court case Seldon v Clarkson Wright and Jakes (A Partnership) [2012]. When discussing the aim of improving the recruitment of young people in order to achieve a balanced and diverse workforce, Baroness Hale stated: ‘This is in principle a legitimate aim. But if there is, in fact, no problem in recruiting the young and the problem is in retaining the older and more experienced workers, then it may not be a legitimate aim for the business concerned.’
When deciding whether a mandatory retirement age is a proportionate means of achieving a legitimate aim, the Employment Tribunal is required to weigh up the aim against the discriminatory effect that retirement has on employees who reach retirement age. The Tribunal will consider a range of factors, such as alternatives to mandatory retirement, how the retirement age has been applied, and why the employer chose the particular retirement age.
The Oxford University claims
The three recent Employment Tribunal claims brought against Oxford University (the “Oxford University Claims”) demonstrate the difficulties for employers seeking to justify mandatory retirement ages.
In 2019, two claims were brought by two Oxford University professors, Pitcher and Ewart, who were compulsorily retired at the age of 67 and 69, respectively by the University in accordance with its “employer justified retirement age” (“EJRA”). Oxford University relied on three legitimate aims to defend the EJRA namely:
(1) promoting inter-generational fairness;
(2) facilitating succession planning; and
(3) promoting equality and diversity.
Both Tribunals accepted these aims and that the EJRA was intended to achieve them by ensuring that vacancy creation was not delayed so that recruitment into senior academic roles might take place from a younger, more diverse cohort. However, while the Tribunal found that the EJRA was a proportionate means of achieving the aims in Pitcher, the Tribunal in Ewart reached the opposite conclusion.
The Employment Appeal Tribunal dismissed both Pitcher’s and Oxford University’s appeals and delivered a joint judgment in September 2021 in which it found that it is possible for different Tribunals to reach different conclusions when considering the same measure adopted by the same employer in respect of the same aims. The EAT also acknowledged, however, this is an undesirable outcome for employers.
A further claim was subsequently brought against the University by three academics and one senior administrator in Field-Johnson and others v Oxford University (2020). In March this year, the Employment Tribunal found that the EJRA was not a proportionate means of meeting a legitimate aim in relation to all of the claimants. The Tribunal reviewed the University’s statistics on vacancy creation, which demonstrated that the majority of relevant vacancies would arise whether or not the EJRA was in place. As such, the University was unable to objectively justify the continued use of the EJRA.
There is no indication that the University has appealed the Tribunal’s decision. Given the outcome of the Tribunal claims to date, it may be safe to assume that the University is keeping the continued use of the EJRA under close review.
Practical guidance for employers seeking to justify a mandatory retirement age
The Oxford University Claims show that there is no one correct answer to the question of justifying mandatory retirement ages; it is a matter for each Tribunal to decide based on the evidence it hears.
However, Pitcher and Ewart starkly illustrate the importance for employers to produce objective evidence that its chosen retirement age is a proportionate means of achieving the legitimate aims it has identified. In Pitcher the Tribunal took into account evidence from a survey of retirees that indicated that around a quarter said that they would have continued in employment for a further three years had it not been for the EJRA, to satisfy itself that the EJRA sufficiently contributed to the creation of vacancies. However, in Ewart the Tribunal found that the University had failed to produce sufficient evidence to show that the EJRA could contribute to the achievement of the legitimate aims, having regard to a statistical analysis which showed that the rate of vacancies created by the EJRA was trivial.
Guidance can also be taken from the Field-Johnson judgment as to the steps employers will need to take to justify a particular retirement policy. An employer should:
- monitor a policy, periodically review it and collect data on it;
- keep contemporaneous evidence such as determining at exit interviews why an employee is leaving and whether their departure was due to a mandatory retirement age;
- obtain reliable statistics to show the employer is achieving a social policy aim; and
- demonstrate that they have considered alternatives to a mandatory retirement age.
Managing conversations about retirement
In the absence of a mandatory retirement age, employers may be in the dark about the intentions and future plans of their older workers, which can make workforce and succession planning a challenge for businesses. It is important for employers to have regular, informal conversations with older employees about their career progression and plans in order to:
- identify any training or development needs;
- discuss future work requirements;
- ensure the employer has effective procedures in place to deal with any potential health or performance issues; and
- enable effective workforce planning.
However, employers may be unsure about how to approach these discussions with their older employees, and they may be concerned that raising such topics could make employees feel pressured to retire or provoke age discrimination claims. This may be a legitimate concern, as a published study, The Unretirement Uprising, by 55/Redefined, found that almost a third of retirees felt forced to retire.
Acas suggests that some employers may incorporate such discussions into their formal appraisal procedure and that open questions regarding an employee’s short, medium, and long-term goals and plans could be asked. General discussions involving questions about where an employee sees themselves in the next few years and how they view their contribution to the organisation are unlikely to amount to age discrimination.
Employers should, however, be careful that discussions about retirement don’t cross the line into age discrimination. For example, in Hutchinson v Asda Stores Ltd (2020) the Employment Tribunal found that repeated suggestions that were made to the claimant, who was aged 73 and showing clear symptoms of dementia, that she might want to consider retirement was found to be direct age discrimination. The ET held that the suggestion to retire would not have been raised with a younger employee showing mental impairment in similar circumstances. In addition, the fact that the suggestion of retirement was repeated more than once, after being rejected by the claimant was age-related harassment.
Ageist assumptions
Another area of risk for employers is making assumptions about employees’ career plans based on their age. Employers should be careful not to make stereotypical assumptions about the intentions of their older workers, particularly in the context of an ageing workforce where older workers may be more reluctant to retire or feel entitled to retain their jobs.
This was demonstrated in the Hutchinson v Asda Stores Ltd case mentioned above. Although the claimant was demonstrating clear symptoms of dementia at work, such as being forgetful, getting confused, and needing greater assistance to carry out her role, the employer did not seek any medical advice on how her condition should be managed and simply assumed that she would need to retire. The ET held that as the employer was aware of her symptoms, it was incumbent on it to investigate them via a referral to occupational health.
In addition, in Imperial College Healthcare NHS Trust v Matar (2023) the claimant, an NHS locum consultant, brought a successful direct age discrimination claim after he resigned and a younger consultant in a similar position to him was treated more favourably and supported and encouraged to seek specialist registration. The claimant was in his late 50s and planned to retire at 60, and rather than being encouraged to seek specialist registration, early retirement was explored for him. The EAT upheld the Tribunal’s finding that the assumption that he would not be interested in or willing to join the specialist register was based on his age.
Disguised retirement dismissals
In order to fairly dismiss an employee with two years or more continuous service, whatever their age, an employer must show that the reason for the dismissal falls within one of the potentially fair reasons for dismissal (i.e. capability, conduct, redundancy, or some other substantial reason) and that they followed a fair dismissal procedure.
Employers who are unsure of how to manage discussions about retirement and want to bring about the exit of an older employee may be tempted to disguise retirement dismissals as dismissals for another reason, such as misconduct or redundancy for example. However, this is a very risky approach which would put employers at significant risk of age discrimination claims. The Employment Tribunals have been quick to identify cases in which an employer has attempted to disguise a retirement dismissal.
For example, in Constandinou and anor v Supadance International Ltd (2016) an Employment Tribunal upheld the age discrimination and unfair dismissal claims of two older employees who were made redundant.
Although the tribunal accepted that there was a genuine redundancy situation, it found that there were a number of indications that the dismissals were significantly tainted by age. For example, in his witness statement, the managing director referred to previous redundancies as “retirements”. In addition, the fact the employer had followed a fair procedure during an earlier redundancy exercise, whereas the claimants had been given no prior warning that they were at risk of redundancy, allowed the Employment Tribunal to infer that age was a consideration in the claimants’ selection.
Conclusion
These cases demonstrate that age discrimination claims are increasingly on employees’ radar, particularly in the context of retirement. Given the significant financial compensation that can be awarded for a successful claim and the knock-on impact on reputation, employers would be wise to review their current practices in relation to managing older employees.
A proactive approach to ensuring that people policies are fit for purpose and reduce the risk of all discrimination claims (not just age) is always a good idea. Further, employers may find that a positive and inclusive approach towards an older workforce expands the current talent pool and allows more junior employees to benefit from the experience and client networks of their older colleagues.
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