01 August 2008
You might be fighting fit and at the top of your game, but if you're 65 you can be forced out of your job. This could all change after a spate of age discrimination claims and a European Court hearing, which could cost public bodies dearly. Anat Arkin reports
It takes stamina to cycle from Land's End to John O'Groats, and to follow that up with a cycling expedition to Cuba. So there's no question that 60-something Nigel Speight, who has done both in the past 18 months, is in better physical shape than many people half his age. Nor is there any doubt about the former consultant paediatrician's professional competence – he received an award for clinical excellence two years ago. Yet last year, he was forced to retire from the teaching hospital he had worked in for 25 years.
'I asked to stay on and they said “no”,' he recalls. 'They said they were trying to reduce consultant numbers. But they then accepted that the work still needed to be done and appointed a long-term locum to do it.'
Speight, who believed he was still giving good value for money, says he was told he would not be an acceptable candidate for the locum post. He has now brought two age discrimination claims against County Durham and Darlington NHS Foundation Trust, one for ending his employment when he turned 65 and the other for denying him the opportunity to apply to work as a locum.
Speight's case, along with 250 others in England and Wales and ten in Scotland, has been put on hold pending the outcome of a legal challenge to the UK's age discrimination laws. This has been taken to the European Court of Justice by Heyday, the membership arm of the charity Age Concern. If it succeeds, employers will be able to force people to retire only if they are clearly no longer up to the job. With growing numbers of people enjoying good health and wanting to work into their late 60s and 70s, there could also be a flood of compensation claims from those sacked because of their age.
The Employment Equality (Age) Regulations 2006 banned age discrimination in employment but, following intensive lobbying from the CBI and some other employers' organisations, the government agreed to introduce a national 'default retirement age' of 65. Employees have the right to ask to stay on beyond this age, and employers are obliged to consider their requests – but can turn them down. They can also refuse to hire people who are within six months of their sixty-fifth birthday.
'The 1.3 million people in the UK working beyond retirement age do so only at the grace of their employers. Your right to work ends at 65,' says Heyday director Ailsa Ogilvie.
Heyday argued at a European Court of Justice hearing last month that the default retirement age contravenes the European Union directive on which the age regulations are based. The court is expected to publish its judgment before the end of the year, when the case will be referred back to the High Court in London.
As it is then likely to go to appeal, we are in for a long period of uncertainty and stagnation, according to Rachel Krys, director of the Employers' Forum on Age, a network of public and private sector employers that campaigns against age discrimination.
'Employers are saying that they are not going to make any big changes until they have a very clear idea of what the law is going to say ultimately,' says Krys, who estimates that half of central government departments and most local government organisations use the default retirement age.
That doesn't necessarily mean they get rid of every employee who turns 65. A spokeswoman for the Department for Business, Enterprise and Regulatory Reform, which is responsible for the age regulations, says the retirement age is a tool that employers can use to plan their workforce, but that many choose not to use it. Those that do, including Berr itself, approve 'a significant number' of requests from staff wanting to work beyond 65.
There is often a good business case for doing so, according to the vice-president elect of the Public Sector People Managers' Association, Dean Shoesmith, whose day job is executive director of human resources for the London Borough of Sutton, as well as interim head of HR for neighbouring Merton. 'For example, social workers are as scarce as hens' teeth, as are planners, so if someone is coming close to retirement age, it can make eminent sense to extend that person's employment,' he says.
Both boroughs have a history of allowing people to work past 65, which could be why neither is currently facing any age discrimination claims. Other public bodies, by contrast, are steeling themselves to defend multiple claims. They include the Land Registry, five of whose former employees have brought discrimination claims – all of them now on hold – after being made to retire at 65.
Tabitha Green, head of HR services at the organisation – which received an Age Positive award from the Department for Work and Pensions for promoting age diversity – defends the use of the default retirement age. 'This is necessary due to business imperatives to reduce staffing levels and improve progression opportunities for staff at all levels,' she says.
Sarah Brant, director of human resources at University College London, makes a similar point. UCL is also facing a tribunal claim, from a leading academic who landed a job at another top university shortly after being forced to retire.
Brant says: 'As rates of turnover, particularly among academic staff, have traditionally been low, there is a UCL-wide need to retain a planned retirement date, other than in exceptional circumstances. In a rapidly changing and highly dynamic marketplace, a healthy level of turnover is required to introduce new skills and approaches.'
Most higher education institutions are taking a similar approach but Middlesex University is one exception. It scrapped its fixed retirement age in 2006, and hasn't had cause to regret this. 'Under the previous policy of compulsion, the vast majority of staff left by the age of 65. That didn't make sense because we were losing people with knowledge, experience and skills just because of their age,' says equalities and diversity manager Michael Howard.
It also seemed 'blatantly unfair', he adds, so the university now offers employees the choice of retiring at 65, continuing to work after that age or working reduced hours, if that makes operational sense.
In the past, it was traditional in the sector for academics to work beyond 65. But since the age regulations came into force, universities have taken a more formalised and restrictive approach to retirement, says Roger Kline, head of equality and employment rights at the University and College Union.
'It's happening at a time when universities, having done relatively well in terms of funding for the past five or six years, are now seeing the good times coming to an end,' he says. 'That's made employers more nervous about the financial implications of keeping people at the top end of pay scales for longer, when they could get younger people for perhaps half the cost.'
Kline believes that employers also want to get rid of highly paid people now, while the age regulations are weak, rather than later, when they might be strengthened.
That could turn out to be a false economy. If the Heyday challenge succeeds, it will probably have the effect of making the default retirement age unlawful from the word go, explains Nony Ardill, legal policy adviser for Age Concern.
'That would mean that people forced to retire from October 2006 up to the point where the law is changed, and whose claims are now pending, will be able to have their claims heard under the re-interpreted version of the regulations,' she says.
With no upper limit on awards for age discrimination, successful claims could leave employers seriously out of pocket. The public sector, which appears to have run into more difficulties with the default retirement provisions than other aspects of the age regulations, could be especially hard hit.
Individuals can be awarded compensation for all losses caused by an act of discrimination, although they are expected to mitigate their losses, if they can. They can also win compensation for injury to their feelings, says Arpita Dutt, a partner at Russell Jones & Walker, a law firm representing one of the five Land Registry claimants.
'The best course of action would be to stop relying on retirement as a reason for dismissal and allow employees to continue working beyond the normal retirement age,' she says. 'If an employee… can no longer work effectively, the employer should then manage them in the same way as an employee of any other age by using performance, ill-health or other appropriate procedures.'
Even if the Heyday challenge fails, employers might eventually have to follow this advice. The government plans to review the default retirement age in 2011 and to scrap it if evidence shows that it is unnecessary. That, of course, assumes that the present government will still be in power in three years' time. With the Conservative Party yet to say whether it will carry out the review if it forms the next government, the issue remains clouded in uncertainty.
However, solicitor general Vera Baird told Public Finance that 'the tide is already flowing against' the default retirement age. 'The overwhelming majority of people are allowed to stay on (in employment) in one way or another if they want to do that, so it's almost going to become irrelevant in due course,' she said.
Plans for a new Equality Bill announced a few weeks ago by equalities minister Harriet Harman did not address the question of forced retirement. But it did promise to replace existing statutory duties requiring public authorities to promote race, gender and disability equality with a wider duty that will also cover age. The details of this duty have not yet been announced, but Jayne Hardwick, a lawyer at the Equality and Human Rights Commission, believes it could have an impact on employment practices.
'At the moment, under the race equality duty, there is a requirement to monitor employees by race,' she says. 'So there is a possibility that public authorities might be asked to monitor staff by age, to see whether that reveals any particularly difficulties or disadvantage – for example, in relation to access to training.'
Krys, from the Employers' Forum on Age, believes the new duty will send out a strong message to public sector employers that age discrimination is as unacceptable as any other form of discrimination. 'To achieve actual change we need a massive culture change, and I don't think we've had that on age yet,' she says. 'Ageism is still acceptable and endemic, but this is a step in the right direction.'
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