The Employment Rights Act 1996 - Essay Example

?Employment Law Default retirement age (DRA) under Equality (Age) Regulations 2006 has since been abolished from October and after the transition period, any forced retirement of an employee will tantamount to automatically unfair dismissal unless the organisation has an objectively justified retirement age. The relevant legislations to be referred are The Employment Rights Act 1996, Employment Equality (Age) Regulations 2006, and The Equality Act 2010. The Equality Act 2010 prohibits less favourable treatment on the grounds of age both direct and indirect which is unlawful unless it is justified by the employer. The justification will generally be under exceptional circumstances which not all organisations can meet when challenged at the Employment Tribunal. Such a justification will be found in posts for which the employer already has a retirement of age far below 65 due to nature of the jobs such as emergency services requiring a certain level of physical fitness or those requiring high level mental fitness such as air traffic controllers. Justifications can also be found in areas where Default Retirement Age (DRA) does not apply such as partners in a law firm. As DRA has been scrapped, employers must ensure that management of their employees’ performance is not discriminatory and not inconsistent to avoid possible litigation from the disgruntled employees who may be discriminated against on the grounds of age. Employer should apply non-discriminatory and consistent policies across the organisation. Employer should ensure that the managers are updated with latest procedures and trained in handling employees’ performance. Employers should conduct regular meetings or discussions with their employees regardless of their age for their performance review, know their expectations and future plans within the organisation. It is not discriminatory if all the employees are taken into confidence regarding their future plans without singling out the older workers. The meetings or discussions should be held with transparency and honesty. No discriminatory questions should be posed which would imply that an older worker is ready for retirement. The appraisal process is the ideal time for such discussions. It does not mean employers have to treat all the employees in exactly the same manner but should make sure there is consistency and fairness. In case of underperformance of an employee, employer must identify the cause. Neglecting on the poor performance by older workers can also be categorized as a discriminatory act of the employer by other employees. Employer should avoid assuming that older workers are associated with underperformance. All cases of underperformance should therefore be dealt with promptly through right and fair procedures and any resultant dismissals should only be on the basis of capability. Employers must also make sure that they comply with Equality Act when dealing with older employees who might have acquired disabilities in their old age and therefore not discriminated against (Thompson, 2011). The instant case relates to the grievance of Albert 64, an employee on the verge of retirement that he is being forced to retire under the pretext of poor performance. With more than twenty years of service, he started declining in performance of late only after his wife fell sick resulting in additional responsibilities for him at home. Although he wanted to work at home one day a week, his request was declined as his manger Chris did not want to set a precedent in finance department where Albert worked although a female employee of the administration department had been permitted to work at home one day a week. While at first, Albert’s poor performance was being discussed with him personally at regular meeting, later he was being called in for specific purpose of discussing his poor performance only with which he felt uncomfortable and was convinced that the management’s aim was to terminate his service on capability grounds. At first glance it appears that Albert’s case has not been handled by the management with care. Age related poor performance cannot be sudden as found in Albert’s case. The retirement age of 65 is only a bench mark just as the age of majority where a minor cannot be said to have become major in true sense overnight. Albert had already informed his employer of his wife’s degenerative disease and his inability to maintain work/life balance and requested for one day work at home every week. Employer could have considered his request since there was already a female employee of administrative department working one day a week at home. This itself is an instance of partiality/discrimination. Albert’s manger’s contention that finance department cannot afford to have work at home arrangement does not seem fair. He could have been shifted to any other department which could accommodate his request. Manager’s contention that she does not want to set a precedent that would encourage others to make similar request itself is evidence that it has no bar specific to finance department. Albert could have been allowed to work as he wanted on condition that his performance would be reviewed for justifying age related termination of service later in case he still performed poorly. Management has missed this opportunity. Management’s only contention is Albert cannot continue on capability grounds and nature of his work in finance department is only an excuse. In order for these findings to be dispassionate, it is necessary to analyse relevant provisions of enactments and case law. It has been estimated people over age 50 will form 50 % of U.K. population by 2020 and life expectancy for men aged 65 is 82 and women, 85 as per the government estimates in 2008. And only one third of U.K. employers had a compulsory retirement age as of 2008 (Davies, 2011, p. 434). Equality Act 2010 Under this new enactment compulsory retirement is a kind of direct age discrimination. Direct age discrimination is legally valid if the employer can justify it by showing that it is in pursuit of a legitimate aim and that compulsory retirement is necessary to achieve that aim (ACAS, 2011), (Legilsation.gov.uk, 2010) The aims that courts have recognized are 1) giving access to employment for younger generation, 2) there must be a planned departure of existing and entry of new staff. 3) fair participation in employment opportunities by both new and old generations. 4) mix of experienced and new staff for sharing ideas and experiences among themselves. 5) avoiding situations dismissing the employees on the grounds of capability and thus avoiding humiliation to the employees concerned and 6) avoiding necessity of having to prove employees’ unfitness after a certain age (ACAS, 2011). In this connection it is relevant to cite the case Seldon V Clarkson Wright and Jakes (2012). In this case a solicitor who was a partner of the law firm was compulsorily retired at the age of 65 as per their partnership agreement. Supreme court dismissed the solicitor’s appeal as the employers could successfully establish two aims of “intergenerational fairness and dignity (Insley, 2012). An employer must show that his policy of retirement is reasonable as it is necessary in the above circumstances. An employer need have a policy if there are less discriminatory ways of meeting the aims are available. For example, if it is possible to do without retirement age, then implementation of a retirement age will be considered disproportionate. Thus in the case of European Commission v Hungary (2012), the ECJ ruled that reduction of retirement ages of Hungarian judges from 70 years to 62 is against equality principle enshrined in the Equal Treatment Framework Directive as an unjustified discrimination on the grounds of age (Europa.eu, 2000). As a matter of fact, Equality Act 2010 is also in pursuance of this directive that prohibits discrimination in employment on the ground of age among other grounds. Disproportionateness is judged by the importance of the aim vis-a-vis the negative aspects of the disadvantage to employee community. This is a question of fact (ACAS, 2011). Therefore, the facts and circumstances of the case on hand compel the need to examine as to whether management’s stance is justified. The facts presented state that it is not the aim or policy of the employer herein to justify compulsory retirement age under the above said circumstances such as 1) giving access to employment for younger generation, 2) there must be a planned departure of existing and entry of new staff. 3) fair participation in employment opportunities by both new and old generations. 4) mix of experienced and new staff for sharing ideas and experiences among themselves. 5) avoiding situations dismissing the employees on the grounds of capability and thus avoiding humiliation to the employees concerned and 6) avoiding necessity of having to prove employees’ unfitness after a certain age. There is no declared policy of the employer to achieve these aims. The only aim of the employer is to avoid situations dismissing the employees on capability grounds. Age discrimination and constructive dismissal. In the present case Albert notifies his resignation on the grounds of age discrimination and constructive dismissal. Generally constructive dismissal is invoked in the event of employer violating the contract of employment. It is unclear whether Albert can successfully make out case as in the case of an Ireland decision in Barry v Quinn Insurance Limited UD1775/2010 wherein the court observed that employee could terminate employment contract on constructive dismissal basis only when the employer has committed breach going to the fundamentals of the employer-employee agreement.. Reasonableness test applied showed that employer did not conduct their affairs so unreasonably to justify employee’s leaving the job. In the case of Albert, the employer has not taken any steps to dismiss him either on the grounds of capability or on age discrimination (Dunne, Buggy, Dunne, & Glenfield, 2013). Age discrimination is the only ground under which Albert can claim relief following the decision of European Commission v Hungary (2012) wherein the judges’ retirement ages were sought to be reduced but which the court declared as disproportionate and against Equal Treatment Directive. But in the present case all the conditions are present short of actually dismissing Albert. Albert will therefore be found discriminated on the grounds of age since he has not been given an opportunity to improve his performance by agreeing to his proposal of working at home one day a week. The employer would have been justified had Albert been given an opportunity and then proved his poor performance even after doing so. It would be in the interest of employer therefore to invite Albert for a grievance procedure before he proceeds with his planned action to move the Employment Tribunal for discrimination on the grounds of age and constructive dismissal. Equality Act 2010 and Employment Rights Act 1996 apply in this case since discrimination on the grounds of age has been prohibited under both the Acts. Lessons learnt Chris and Ann could have better handled the case of Albert by encouraging him to undergo grievance procedure. Even assuming the employer is justified in their plan to dismiss Albert on capability grounds, offering him to avail of grievance procedure would have given the employer an edge in the legal proceedings. Refusal to give him one day work at home every week, allowing a female employee in another department, calling him separately for meetings to show his poor performance as a humiliation in front of other employees would all weigh against the employer’s genuine concerns and justifications to dismiss Albert on the grounds of capability. Recommendations Since management is concerned with the repercussions of the removal of retirement age. The following are recommended in relation to age. Good people management is the best manner of tackling DRA removal. Managers should hold talks with employees and giving them chance to communicate with managers openly and on regular basis. Holding regular dialogues with all employees about employer’s expectations of them, their performance and future plans is highly essential without limiting it to only a section of them i.e young or old. Employer should maintain record of conversations without making it highly bureaucratic. All employees need not be treated alike i.e. different ages need not have the same treatment. But all should receive fair treatment in a consistent manner. Any evidence of poor performance should be immediately attended to without a complicated policy and procedure but system of dealing with such issues should be fair enough. A person on the verge of retirement performing poorly should be dealt with just as the employer would in the case of junior employees. Even without default retirement age, employer can still have lawful retirement age that can be objectively justified. ACA’s guidance on Employer Justified Retirement Age (EJRA) should be followed though EJRA is at present only used for cases of retirement under 65 such as jobs in emergency services requiring a high level of physical fitness and air traffic controllers requiring high mental alertness. The employer needs to consider that his prescribed age of retirement meets with a legitimate aim. The employer should be ready with evidence if challenged. The justification should be objective and not subjective. Once EJRA is established, any retirement will be treated as a dismissal for a significant reason as per section 98(1) (b) of Employment Rights Act. There should be a fair procedure in retiring employees on their reaching the compulsory retirement age. Employees should be served with sufficient notice of their ensuing retirement and their request if any for continuing in employment must be considered if conditions permit as an exception to the general policy but there should be inconsistent manner of treatment among the employees willing to continue. Unless it can be objectively justified, no older employer can be dismissed on the grounds of retirement. Employer should make the employees aware of their choice to retire earlier and draw their occupational pension they are eligible under any scheme. Employer may note that abolition of DRA does not however make employees perpetually continue in employment. It only shows that employer cannot force retirement unless it can be objectively justified. For example, in Albert’s case if any other person of his age cannot also perform finance functions, then it is an objectively justified retired age. Thus, if he is given the choice to work at home one day a week and still under performs, it would be easy to convince him to retire when the time comes (65 years). Employee with poor performance should be taken into confidence and causes of underperformance should be established. Failure to address this in older employees may well be branded discriminatory. Establishing the reasons of poor performance is of utmost importance. In the absence of DRA, an employer can still adopt one of the reasons for fair dismissal. Although employer can have a contractual agreement for retirement at a certain age, it cannot have any legal force as employees cannot sign off their employment rights (ACAS, 2011). Employers should not associate poor performance with older workers. McDonald reports a higher performance by 20 percent in outlets where 60 plus workers are employed as part of mutigenerational workforce. Demographics reveal that UK is running out of workers. Whereas the estimated requirement of workers is 13.5 million in the next ten years, only 7 millions young people are expected to leave School and college and the Government is already committed to curb immigration which is now 200,000 immigrants per year. Employers must realize that older people are untapped source of labour readily available. Older people of 65 years are expected to live beyond 80 years and some even beyond 110 years. Employers should offer older workers flexible working which will help them stay in the labour market. It is not that since DRA has been scraped, employees will stay in jobs till they drop. Normally employees become aware when they are no longer able to work and self select the time of retirement. It is once again emphasized that an older worker found with under performance should be advised through performance discussion for the benefit of both the employee and the employer (DepartmentForWorkAndPensions, 2013). Conclusion The case of Albert is a critical and thought provoking as it is difficult to find fault neither with the employer nor the employee. Both are justified in their own respects. Albert wants to make it known to his employer about his intention to continue in employment and wants employer to create a situation whereby he will be able to achieve the required work/life balance. On the other hand, employer wants to ensure his consistence performance on par with standards and is rather ignorant of the law that an employee cannot be forced to retire without objectively justifying his aim. Employer herein is more worried about form over substance in that he is unwilling to see reason in the employee’s genuine request for working at home one day a week. Ignoring the genuine need of the employee cannot be justified under the pretext of objective justification of retirement age. Though Albert cannot succeed for constructive dismissal claim, he can earn the sympathy of the court on his being discriminated on age grounds under the pretext of capability especially when the employer is not ready with evidence for objective justification of retirement age. Employment Tribunal will therefore find in favour of Albert for discrimination on age under the provisions of Equality Act 2010 and Employment Rights Act 1996. Although Seldon case is land mark judgment favoring the employers, it does emphasize how difficult it for them to fix a retirement age. References ACAS. (2011). Guidance for employers: Working without the default retirement age. Avialable at accessed 22 April 2013 ACAS. (2011). Working WIthout Defaualt Retirement Age. ACAS. Davies, A. (2011). Workplace Law Handbook 2011: Employment Law and Human Resources. Cambridge: Workplace Law Group. DepartmentForWorkAndPensions. (2013). Employing Older Workers: Am employers' guide to today's mutigenerational workforce. Department for Work and Pensions. Dunne, B., Buggy, B., Dunne, J., & Glenfield, P. (2013, April 11). Ireland: Employer Successfully Defends Constructive Dismissal Claim . Mondaq : Employment and HR . Europa.eu. (2000). Council Dircetive 2000/78/EC of 27 November. Official Journal L 303 , 0016-0022. European Commission v Hungary , C-286/12 (Court of Justice of the European Union November 6, 2012). Insley, J. (2012, April 25). Age discrimination ruling allows employers to set retirement dates. the Guardian . Legilsation.gov.uk. (2010). Section 13(2) Equality Act. Available at accessed 22 April 2013 Seldon V Clarkson Wright and Jakes , UKSC 16 (para 50 2012). Thompson, H. (2011). Retirement . In WorkPlaceLawGroup, Employment Law and Human Resources Handbook 2012. Cambrdge: Kogan Page Publishers. Read More