Loophole may lead todismissalclaims

Feb 26 2008 by jez Davison, Evening Gazette

A LOOPHOLE in the UK Age Discrimination Regulations could leave Teesside businesses facing backdated unfair dismissal claims from older workers.

But North-east employment law specialists said there is nothing unlawful about asking staff to retire at 65 - although they should have a consistent policy, or face potential difficulties later down the line.

Currently, employers who relieve staff of their duties at the age of 65 are acting within the law, but the National Council on Ageing (NCA) has instigated a review by the European Court of Justice (ECJ) on the regulations, which were introduced on October 1, 2006.

The NCA’s concern is that these regulations allow employers to retire employees at the age of 65 even if they wish to continue working. While the new law permits employees to appeal against forced retirement, it also allows employers to retire them compulsorily without having to justify the decision.

But Tim Smith, partner in Ward Hadaway’s employment unit, said even if the ECJ rules in favour of the NCA, it was unlikely small firms would be hit by backdated claims as they would usually have to be filed within three months of the date of retirement.

He said: “The NCA’s challenge has some merit although the typical three-month time limit should reduce the number of claims brought against businesses.

“However, company owners should act in accordance with current law and not retain the services of an employee beyond the age of 65 just because they think the law might change in future.

“My advice is to use current statutory procedures to retire staff at 65. It is very difficult to get them to retire later without being open to age discrimination claims.”

International retirement research by AXA revealed that of those in retirement now, 28% said it was imposed by their employer. In an attempt to avoid future claims, some employers are now considering abandoning a compulsory retirement age altogether while others have already done so.

Wendy Parker, ACAS’s area director for the North-east, said companies should be wary of setting a precedent by asking one person to retire at 65 while allowing another to continue in employment.

She said: “It is far more difficult for businesses to justify one rule for one employee and one for another.”

Currently there is no cap on compensation awards made for discrimination claims.

The ECJ is expected to make its decision on the review within one to two years.