Companies must traverse a treacherous legal landscape fraught with litigation risks and must choose their actions wisely to avoid falling foul of the Employment Tribunal.
Employers should note that age-related discrimination can be both direct and indirect; the former involving an individual being treated less favourably due to their age, and the latter occurring where an age group is disproportionately affected by an employer’s policies or actions.
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Compulsory retirement policies can have nightmarish ramifications for employers if they fail to tread carefully.
In principle, such a policy constitutes direct discrimination, unless the employer can demonstrate such a blanket policy can be objectively justified, and the burden lies on the employer to prove this – for instance, a real business need.
Failure to provide this can invite a landslide of litigation from employees, including discrimination and constructive dismissal claims.
Even the largest organisations can get it wrong when retiring employees.
The Ministry of Defence recently learnt this the hard way, after one its employees successfully brought a discrimination claim in the Employment Tribunal. It involved an employee in his 60s who raised a grievance about his employment.
During the grievance process, the MoD asked him if he planned to retire. The MoD’s explanation that it asked this question because it needed to manage its staff and “ensure effective succession planning” was not accepted, and the Tribunal ruled that asking an employee who is concerned about their employment if they were considering leaving was not reasonably necessary.
Employers must diligently follow a fair dismissal procedure to protect themselves from any legal fallout. Employees must be given adequate retirement notice, and employers must inform staff of any fixed retirement age policies as well as checking in on those approaching retirement age. Fair consideration should be given to requests from employees to stay on after the compulsory retirement age.
Companies should also utilise the tools at their disposal to ease the retirement transition. Pre-retirement training is a helpful means of reducing any potential frostiness between employees and management, whilst a gradual changing of the guard whereby older workers mentor their younger colleagues can prevent any unexpected surprises.
Open dialogue between employers and employees can help reduce friction, and accommodations such as flexible hours, job-sharing or part time working can help make the process easier for both sides.
Employers should also remember that seemingly innocent gestures can backfire. A recent case involved an Asda employee with dementia and an incident in which a manager helped her look for her keys.
Despite acknowledging that this was done “with the best intentions”, the Tribunal found that the employee’s dignity was violated, and the company’s actions amounted to disability-related harassment. The Tribunal also found the employee had been constructively dismissed by reason of her age and disability.
Compulsory retirement continues to be a tricky situation to navigate for employers. By establishing and rigorously following proper procedures many risks can be mitigated. Employers should remember that the burden of proof falls on them to justify their actions, and that their objective justifications must be ironclad to avoid any unwelcome surprises from the Employment Tribunal.
Nelu Abeygunasekera is a partner and specialist employment lawyer at Excello Law
