Update: employment

As we mark the passage of time by moving into the 'twenty tens', it is perhaps fitting that age discrimination and the default retirement age should be at the forefront of developments in employment law.

Following its Green Paper last summer, 'Building a Society for All Ages', the government is now seeking further information or evidence in response to its consultation on the default retirement age. The evidence requested, which should be submitted by 1 February, is on the following:

• the operation of the default retirement age in practice;
• reasons that businesses use mandatory retirement ages;
• the impact on businesses, individuals and the economy of raising or removing the default retirement age;
• the experiences of businesses that are operating without a default retirement age; and
• how costs of raising or removing the default retirement age could be mitigated and benefits realised.

It is clear that the government is evaluating doing away with a default retirement age altogether. The absence of a default retirement age could have a pretty radical effect on a whole range of employment relations and practices. It would abolish the statutory retirement procedures and thus give a right of protection from unfair dismissal at any age. It would also have potentially far-reaching consequences on employment planning and the process for termination of employment of older (and therefore younger) staff.

The government hopes to glean information from the experience of those who have operated without an age limit. Both positive and negative experience from other jurisdictions will be also taken into account. And, with such a very short timescale for further responses, it appears that the government might be intending to introduce changes before any general election is called.

Upper age limit for dentists

In the meantime, the European Court of Justice has also been busy on age discrimination issues. In Petersen v Westphalia and Lippe, the court was required to consider the validity of an upper age limit of 68 for state dentists and doctors. The German age discrimination law did not abolish or amend the existing age limit applicable to panel dentists in Germany. These are dentists registered to provide dental care services to patients insured under the state scheme. Under that, permission to practice expires at the end of the calendar quarter in which the panel dentist completes his or her 68th year. These rules do not apply to non-panel dentists who can continue to practice after that age.

The specific reason for maintaining a default age limit was to contain costs in statutory health insurance because there was a constantly increasing number of panel doctors and dentists and therefore a need to limit their number. The authorities considered that surplus supply should not be curbed only by restrictions on admission, at the expense of the younger generation of doctors. It was also considered necessary to maintain a mandatory age limit to impact on the older generation of doctors.

Ms Peterson, who was about to hit the age limit, lodged a complaint. In rejecting her claim, the local court in Dortmund also had regard to the need to protect patients insured under the statutory health insurance scheme against risks presented by older panel dentists whose work is no longer of the highest quality. The decision was based on a general discretion to take age into account by regard to 'general experience' which did not require an individual examination of the physical and mental capacity of every doctor who had reached the age of 68. It held that the legislature was entitled to adopt general rules based on experience.

The referring court was uncertain whether that analysis was also valid with respect of the directive or whether, if there was to be reliance on failing capabilities, there would need to be an examination of each individual person. One of the questions referred was, therefore, whether you can maintain an age limit as an 'objective and reasonable measure' if it is derived solely from an assumption based on 'general experience' that a general drop in performance occurs from a certain age.

The court's judgment is not absolutely clear on this point. It held that the national authorities in Germany could not apply a blanket age limit of 68 as a measure to protect the health of patients against decline in performance. However, they did not on the basis that that age limit did not apply to non-panel dentists. This, therefore, raises the possibility that in the event of a complete ban or prohibition, such regard could be had to 'general experience'.

By contrast, the German authorities succeeded on the employment market argument. The court upheld the argument that the aim of sharing out employment opportunities among generations in the profession of panel dentist was a legitimate aim and that the measure was both appropriate and necessary for achieving that aim.

This is the first direct ECJ decision relating to employment opportunities and the impact of age discrimination legislation. On a rather different scale, it echoes the decision of the Employment Appeal Tribunal in the case of Seldon v Clarkson Wright and Jakes [2009] EWCA Civ 889. In this case, the EAT held that the defendants' wish to open up partnership opportunities for younger people was a legitimate aim justifying an retirement age of 65. It is pending before the Court of Appeal this year.

The Case C-229/08 Wolf v Frankfurt am Main (see solicitorsjournal.com, 12 January 2010) also involves age limits, but those relating to the start of employment. Mr Wolf argued that an age limit of 30 for recruitment to career posts in the fire service was unlawful. The court held that fire fighting and rescue duties which were an integral part of the particular career posts in question could only be performed by younger officials. Officials who were older than 45 or 50 carried out other duties. Accordingly, the legitimate need to ensure the efficient functioning of the intermediate career in the fire service, and to permit the assignment of older officers to less physically demanding duties, both combined to make the age limit of 30 permissible in the circumstances of these roles.

These two decisions reaffirm the European Court's approach to age discrimination issues to date. The court has not been very quick to adjudicate such claims in a radical way. And both these decisions indicate a significant margin of appreciation for member states and their employers in the setting of both lower and upper age limits having regard to occupational requirements.

Evidence of age discrimination

In the long running saga of Beck v Canadian Imperial Bank of Commerce [2009] UKEAT 0064090203, which has already been to the Court of Appeal on the issue of disclosure of documents, the Employment Tribunal has now promulgated its judgment at first instance. This case has made fascinating reading as it examines the practices of investment banks and especially global organisations. Mr Beck claimed unfair dismissal and failure to consult, both of which he won. However, given the statutory cap of around £66k, the employer would probably have paid off those claims and admitted liability.

The more interesting and potentially expensive claim was always around the issue of race discrimination and the extent to which a Canadian bank was going to look after Canadian nationals in a redundancy exercise in the UK. Mr Beck claimed both direct and indirect discrimination and brought a lot of evidence to show that the head office of CIBC was providing help to redeploy Canadians, which it was not extending to him.

In a neat illustration of the specificity of discrimination laws, the tribunal decided that, while this evidence did exist, there was also evidence, which it accepted, that Mr Beck was dismissed not for not being Canadian, but for being Mr Beck '“ i.e. that his senior colleagues had decided they didn't want him any more. Most of the discrimination issues, evidence and argument were around this point.

However, Mr Beck, who had one year's employment with CIBC between the ages of 41 and 42, had also thrown in (and no disrespect is intended) a claim of age discrimination. This succeeded largely because the tribunal did not feel that the employer was able to explain away a brief provided to employment recruitment professionals. In that brief, the employers had asked for inter alia someone who was 'younger' and 'entrepreneurial'. The respondents' attempts to explain this adjective as meaning 'less senior' were unsuccessful even though apparently the shortlist of candidates were all in fact older.

The tribunal held that the use of a specific age-related word was sufficient both to transfer the burden of proof onto the respondent and also to cause the respondents to fail to satisfy the tribunal that the age of the claimant was not a factor in his dismissal, thus supporting a finding of direct age discrimination. It should be noted that this is a small part of an extremely long judgment, but is of course the basis for unlimited damages. No doubt the issue of how to balance apparently conflicting evidence, and what it is permissible to draw from the use of certain words, will now proceed on a second set of appeal hearings up to the EAT and potentially beyond.

Religion or belief and tribunal hearings

In Khan v Vignette Europe [2009] UKEAT 0350082204, the tribunal refused to grant the claimant an adjournment request made late in the day, and during the hearing, on account of his wish for a period of 'spiritual purity' during Ramadan. In so doing, the tribunal gave very measured and thoughtful consideration to the representations of a claimant who arguably had not behaved particularly reasonably, not least in that he had agreed the date for the hearing (presumably knowing when Ramadan was), had already caused a hearing to be abandoned previously and had also made two previous unsuccessful applications for adjournment. They heard the case and determined it without the further participation of the claimant, although his counsel apparently remained present.

On appeal to the EAT, the court held not surprisingly that the tribunal had not breached articles 6 and 14 of the Human Rights Act, reference to which was not to be taken as a trump card but simply a relevant factor.

Employment legislation

The Equality Bill is proceeding through its stages in the House of Lords and looks set to pass into legislation in March.

For the first time in living memory, the compensation limit has gone down so that the cap on unfair dismissal compensation is now £65,300 rather than £66,200, with effect from 1 February. The limit on a week's pay of £380 remains unchanged.