Age discrimination and retirement

The government recently announced its intention to move towards implementation of the European Employment Directive on equal treatment in respect of age discrimination. While there is a relatively long time frame for the introduction of the legislation – the Minister Margaret Hodge talked of legislation being introduced “within 6 years” – and the promise of extensive consultation, it is clear that the proposed changes will lead to a radical change in employment practices.

Currently an employee who reaches what is termed “Normal Retiring Age” is excluded from the right to bring a claim for unfair dismissal. Many contracts of employment specify a contractual retirement age. If that provision is strictly adhered to and employees of a particular group are required to retire at that age then the contractual retirement age will be the “Normal Retirement Age”. If, however, a practice has grown up of ignoring the contractual retirement age and workers of a particular group are required to retire at a different age, then that age will have become the Normal Retirement Age. If there is no Normal Retirement Age for a particular group of employees then the employees will normally lose the right to claim unfair dismissal when they reach the age of 65. Whilst the details of the new legislation remain to be determined it is clear that the intention is to sweep away the above provisions. The emphasis will be on the objective justification of any age-based provisions relating to retirement.

The legislation when it is introduced may well seek to eliminate age discrimination more widely – various pressure groups are lobbying in this regard. Pending the introduction of the legislation the government is seeking vigorously to promote the Code of Practice on Age Diversity in Employment which was published last year. Whilst this code is non-statutory it is a useful guide to good employment practice and the anti-discriminatory intention of the code is likely to be reflected in the new legislation. The emphasis of the code of practice – as with the codes on race and sex discrimination – is that at all stages of the employment cycle decisions should be made on the basis of the objective requirements necessary to carry out a job rather than on arbitrary criteria referable to gender, age or race.

It would seem that the days of the advert seeking “young and enthusiastic employees” are probably numbered.

Whilst the new proposals reflect a Europe-wide commitment to equal treatment in employment, they also reflect social policy concerns at the impact of an aging population on employment practices. As the baby-boom generation heads towards grey hair there is a desire to keep their skills within the market place. Whilst it has been said that “sixty is the new forty”, it remains to be seen how many older employees will wish to take advantage of these new provisions.

Bulletins are for general guidance only. Legal advice should be sought before taking action in relation to specific matters. Where reference is made to Court decisions facts referred to are those reported as found by the Court. Please note that past bulletins included in the Archive have not been updated by any subsequent changes in statute or case law.