The first of the two cases involved a Mr Rutherford who claimed unfair dismissal and a redundancy payment from his employers Towncircle Ltd when he was made redundant at the age of 67. Towncircle argued that Rutherford could not pursue these claims because under the terms of the Employment Rights Act 1996 employees who have reached their companys normal retiring age and, in any other case, age 65 cant make a claim for unfair dismissal. And the restrictions dont stop there. Similar provisions also apply to redundancy payments the amount is reduced where the employee is aged over 64.
The employment tribunal that heard Rutherfords claim initially decided that it did have jurisdiction to deal with the claims. It thought that the statutory limits were contrary to European law as they indirectly discriminated against men and were therefore invalid. The employer then appealed to the Employment Appeal Tribunal.
While this case was being considered there was a second case highlighting the need for early action on age discrimination. It concerned a Mr Bentley who was dismissed at the age of 73 when his employer became insolvent. He brought a claim against the secretary of state for trade and industry for a redundancy payment but this was rejected because of his age at the time of dismissal. Meanwhile, the Rutherford case had been remitted for re-hearing and the two cases were considered together.
The tribunals conclusion that denying employees aged over 65 the right to bring a claim for unfair dismissal compensation or entitlement to redundancy payment was contrary to European law is an important one for the issue of age discrimination.
In reaching its decision the tribunal examined the impact of age limits on men at the time of their dismissal. This meant studying three age bands 55 to 64, 65 to 74 and a combined band 55 to 74 as well as the ratio of males to females in the workforce in 1998 and 2001, when Rutherford and Bentley were respectively dismissed. From these statistics, the tribunal concluded that the age limits legislation with regard to redundancy and unfair dismissal disadvantaged a higher proportion of men than women.
The tribunal then went on to consider why the age limits were there in the first place. In the case of redundancy payments the limits had originally been 60 for women and 65 for men. Then in 1989 a single age limit of 65 was introduced for both men and women.
The origins of the age limits relating to unfair dismissal were similarly scrutinised. The original limits which related to the normal retirement age or 65 for a man and 60 for a woman were amended in 1986 to 65 for both sexes, to bring UK domestic law into line with European Community law.
The effect of these changes was that a woman dismissed between the age of 60 and 65 could claim unfair dismissal or a redundancy payment as well as a state pension whereas a man in the same circumstances could claim only unfair dismissal compensation and a redundancy payment. This meant that the justification for the age limit, because it was related to state pension ages and policies linked with these, was tainted with sex discrimination. The Governments argument that all this would be rectified in 2006 with the implementation of the age discrimination laws did not sway the tribunal, and Rutherford and Bentley were allowed to pursue their claims.
In effect, what the tribunals decision in these two cases means is that is that where a company has no normal retirement age, an employee aged over 65 will be able to claim compensation for unfair dismissal or a redundancy payment. Where there is a normal company retirement age, it is arguable that this too will need to be examined. In any case, the outcome of the two cases suggest that age discrimination may need to be considered sooner than anyone thought.
janet.gaymer@haynet.com
Janet Gaymer is senior partner at Simmons & Simmons
