UK: Age discrimination: Unfair dismissal

The Employment Equality (Age) Regulations 2006 make specific changes to the law on unfair dismissal. The changes are to remove the age limits applicable to such a claim, create a new ‘retirement’ dismissal reason and process, and change the potential award of compensation resulting from a successful claim.

Evidence of an employer’s age discriminatory conduct before the regulations come into force will be admissible in any age discrimination/unfair dismissal claim based on acts after 1 October, so employers should act now to amend their processes, rather than wait.

The main changes the regulations will make to unfair dismissal law are:

• Remove the upper age limit for eligibility to bring a claim of unfair dismissal;

• Remove the tapering of the basic award for claimants over age 64;

• Allow the employment tribunal to make a minimum basic award of four weeks capped pay when the dismissal is unfair because the employer did not consider a request to continue working after 65 (or the employer’s normal retirement age).

• Change the lower age limit from 18 to 16 for the purposes of calculating continuous employment.

In effect, the regulations will deem an enforced retirement, even though the retirement date was agreed in the original contract of employment, a deemed dismissal. However, this sort of imposed dismissal can be fair, and the regulations set out detailed provisions about this, including a formal process to be followed in enforced ‘retirement’. Fundamentally, the reason for dismissal is likely to be accepted as retirement if:

1. The dismissal was genuinely for retirement;
2. The employer had previously notified the employee of his or her impending retirement in accordance with the regulations;
3. The enforced retirement takes effect at or after the employee’s 65 birthday or the employer’s normal retirement age (which will need to be objectively justified if it is below 65);
4. The contract of employment terminates on the intended retirement date. However, a retirement dismissal will be automatically unfair where (and only where):
5. The employer has not informed the employee in writing of the right to request to continue working and of the intended retirement date at least two weeks before the retirement date; and/or
6. The employer has either failed completely to consider a request to continue working or the request has not be considered in accordance with the procedure set out in the regulations; and/or
7. The employer has failed to consider an appeal against a decision to retire him/her.

The statutory minimum disciplinary and dismissal procedures will not apply to dismissals for retirement (because the duty to consider process should be used instead in these circumstances).

Although the bulk of the changes to current unfair dismissal law focus on retirement, it is important to note that unfair dismissal claims could be brought in conjunction with a claim under the Age discrimination regulations by employees of, in theory, any age.

For example, if a younger worker is discriminated against under the age discrimination regulations they may resign in response to what they perceive as a fundamental breach of contract and then bring a constructive unfair dismissal claim, as well as a claim under the regulations.

What can employers do to safeguard themselves against unfair dismissal claims

• Review your termination procedures, in particular any procedures which deal with redundancy and retirement;

• Consider how to deal with any notification requirements or 'duty to consider' procedures when a request is made in advance of October 2006.

For full listings on our Age discrimination series, please click here.

This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq

The original publication date for this article was 26/04/2006.