Legal advice: Age equality regulations

MORE THAN a year has passed since the Employment Equality (Age) Regulations 2006 were brought into force. It was hard to miss their introduction, because of the alarmist tone taken by advisers and the media towards their clients and audience. But what's been happening in the employment tribunals since then?

Firstly, not surprisingly, this legislation is popular with claimants. Apparently, around 200 age-related claims a month are currently being presented to the employment

tribunals service. Actual judgments are still thin on the ground, however, as these claims are still percolating through the system. This also excludes the active use of the legislation by employment lawyers in negotiations.

Not mature enough

In a recent widely reported case, Megan Thomas, aged 20, won a claim for age discrimination and unfair dismissal against her employer - a private members' club known as Eight (see details in box). Apparently, she had been told that she was not "mature enough" to deal with members.

The employer's spokesman seemed to say that the organisation had not had a chance to deal with the matters she raised before the tribunal, from which one can infer that it did not respond to her claim and may have been barred from defending it, hence the stark outcome. This is known as cutting off the only leg on which one has to stand.

If this inference is correct, then Eight missed an opportunity to try to justify the discrimination. Justification can be successfully argued if the discriminatory behaviour is found to have been a "proportionate means of achieving a legitimate aim".

The judgment in another recent case, Bloxham v Freshfields Bruckhaus Deringer, which is detailed, thoughtful and balanced, carefully addresses the issue ofjustification.

Although it is only a High Court decision (rather than being an appeal decision), it can provide some comfort for employers who have difficult decisions to justify.

This case was brought by a former partner, of all things, in a City law firm. The firm, having studied matters in detail, had concluded that its retirement provisions, which essentially required working partners to fund retired partners' income in retirement, was no longer viable for the firm's long-term future.

Among other matters, this clearly discriminated against younger partners, who would have to work longer for less money. Accordingly, the firm engaged in a detailed review of the options, with the benefit of external specialist advice, including advice from a leading barrister, and then consulted in depth with the partnership with a view to agreeing reforms.

Bloxham was a member of a particular group of partners, self-styled as 'Grey Panthers', who, by reason of age, was likely to be most immediately affected by the reforms.

Consultation with them as well as other partners resulted in certain changes being made to the proposals - one of which was eventually implemented. As a result, Bloxham claimed he had lost around £4.5m in income.

The employment tribunal found the reforms to be discriminatory on the grounds of age. The firm, however, successfully defended Bloxham's claim, because the tribunal found that the reforms were objectively justified.

Pension scheme

The firm had identified a legitimate aim, that was to provide a more financially sustainable pension scheme which reduced the inter-generational unfairness on younger partners. Further, the manner in which this was achieved was found to be proportionate - particularly as the firm had taken such detailed steps to consider the options and achieve the aim, and that no less discriminatory alternative had been identified.

The judgement is helpful as it clearly shows that, provided an organisation takes the necessary detailed steps, backed up by documentary evidence, to consider the impact of the relevant provisions (and whether or not any less discriminatory course of action can be taken), the decision might be justified.

It is hoped that this judgment sets the standard, as it is well presented and, it seems, unlikely to be open to successful appeal.

A contrast is provided by Martin v SS Photay and Associate. In this case the employer tried to justify the forcible retirement on health and safety grounds of a 70-year-old employee who cleaned a medical surgery, but had not presented any medical evidence upon which to justify its decision.

The employee's claim succeeded, because while it was legitimate for the employer to have its premises cleaned to a high standard, it was not proportionate to dismiss her without discussing her medical condition with her.

The next question, therefore, is: can UK legislation allowing employers to retire employees at 65 be justified? Currently, only retirement ages below 65 need to be justified and employers can compulsorily retire employees provided they follow the prescriptive provisions set out in the legislation. This is the subject of the 'Heyday Challenge', where Age Concern has asked the European Court of Justice (ECJ) to rule whether or not the above provisions accord with EU law.

Problems for employers

A judgment in this is unlikely to be given until 2009, which now causes a serious problem for employers because of the Employment Appeal Tribunal's (EAT) separate judgment in Johns v Solent SD Ltd. This involved a private sector employer retiring an employee when she reached the age of 65 by following the statutory retirement procedure to the letter.

The employee claimed unfair dismissal and age discrimination on the basis that it should not be heard until the Heyday Challenge had been determined.

While the tribunal struck out her claims, the EAT, surprisingly, and worryingly for all employers, agreed with the employee and held that her claims be frozen until the ECJ has ruled on the Heyday Challenge. Currently the EAT has not published its reasons for this, but it seems to believe not only that there is a real possibility that the Heyday Challenge will succeed, but that there is an argument that private sector employees must follow EU law, regardless of what UK law says.

This decision has significant implications for all employers, as it is now likely that the president of the employ- ment tribunals will order all retirement-related age discrimination claims to be put on hold in the same way.

Finally, for any of you in despair over this issue, there is some hope offered in another recent case in which a tribunal confirmed that an individual who is offended by a job advertisement which names a minimum age has no claim if he or she does not actually apply for it. Surprising, that!

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Darren Clayton is partner of Doyle Clayton Solicitors based in London and Reading. Doyle Clayton specialises in employment law and acts for a wide range of employers. If you require any further information go to the website in the right hand column or contact Darren Clayton on 020 7329 9090 or by emailing dclayton@doyleclayton.co.uk