Like employers and employees in many areas of work, those involved in the business travel arena are uncertain about the present position regarding retirement age.
The default UK retirement age of 65 was introduced in 2006, and one aspect of this meant it was lawful for an employer to make an employee retire once they reached the age of 65, provided correct procedures were followed. The law changed completely with the Equality Act 2010 (introduced in April 2011), which stated the dismissal of an employee simply by reaching a specified age can amount to unlawful direct age discrimination, unless the employer can justify the retirement objectively or establish that it is an “occupational requirement” for an employee carrying out that job to be below that specified age.
The old retirement age of 65 was abolished due to the rise in the over 65s wanting to continue their employment. All employers need to consider carefully when it might be appropriate to suggest retirement to employees carrying out certain jobs. As it stands, employers cannot regard 65 as a ‘safe’ age where an employee can be dismissed. Employers have to be able to show objective justification for dismissing the employee at any set age for retirement. The fact that the workforce is ageing has been thrown into relief by the recently-announced government plans to raise the qualifying age for a state pension.
Many employers have abandoned a fixed-age for retirement, now retiring employees on a case-by-case basis where the decision can be justified. To achieve a fair system, many employers have introduced discussions about retirement, so the process becomes more transparent. Arbitration service ACAS has introduced guidance on these workplace discussions, entitled Working without the default retirement age, that suggests the employer asks open questions about the employee’s future plans, that these retirement discussions are built into the employer’s appraisal system, and
that the employer should avoid discussions that could be seen as discriminatory – for example, suggesting an employee is blocking the promotion of younger workers.
New procedures
On the procedural side, ACAS recommends a “fair procedure” but provides little detail for this. Clearly, employees should be given reasonable notice for impending retirement following the workplace discussions before there can be any question of the employee being forced to retire. The employer should also consider any request made by the employee to work beyond any fixed retirement age.
For some employers, they may be able to objectively justify a fixed retirement age, particularly where the job might involve physical activity, or long hours.
Contracts
Following the removal of any fixed retirement age, contracts of employment should alter and staff should be advised. The fixed date for retirement should then be replaced with details of the employer’s alternative structure for workplace discussions and other criteria that might be relevant to the decision-making process. If the retirement age in the contract is to be revised to a higher age, then this needs to be objectively justified. Any shares option, and other employee benefit schemes and pensions, should be reviewed to see whether they need to be revised to fit in with the new procedures.
Also, with some of the workforce being older, careful consideration needs to be given to issues of health and safety, and some of the more physical tasks younger employees should be carrying out.
The Equality Act 2010 makes it unlawful to discriminate against employees, jobseekers and trainees because of their age. There are no upper age limits for claims for unfair dismissal or redundancy. The regulations apply to all workers, including partners in a business. Employers need to have policies in place dealing with recruitment
and selection, pay discussions, selection for promotion, discipline, grievances and other issues where age may be relevant.
Legal recourse
The remedy for an employee alleging age discrimination is an application to the Employment Tribunal. There have been some landmark cases already, including a recent matter where a senior banker, more than ten years older than his colleagues, was chosen for redundancy. The judge ruled that the bank had decided he had no potential, despite his excellent skills and contacts, because of his age. The employee succeeded in his case and reached a settlement with his employers.
Compulsory retirement due to old age is a delicate issue. Given the potential sanctions against an employer for age discrimination, companies need to have a policy in force that is transparent for employees, and backed up by an appraisal system where the employees’ long-term future plans, proposed retirement dates and continuing benefits can be discussed in an open way.
Ian Skuse is a partner and head of Piper Smith Watton LLP’s Aviation, Travel and Tourism department. Piper Smith Watton LLP is a business and private client law firm based in Westminster