[author: Katie L. Clark]
In Europe, many employers are currently caught in the middle of a conflict between older and younger employees. Many older employees want to work longer (whether by choice or necessity), while younger employees feel that an aging workforce is hampering their career progression. Both feel that that their age is being used against them. In the United Kingdom, the repeal of default retirement ages in April 2011 has only aggravated the problem.
UK employers may lawfully use age directly or indirectly in decision-making if “justified.” But where is the line drawn?
Two recent English Supreme Court cases provide some much-needed clarification for employers, particularly with regard to possible justifications for direct age discrimination.
Justifying Age Discrimination
Both direct and indirect age discrimination may be justified, that is, found to be lawful, if the employer can demonstrate that the discriminatory measure is “a proportionate means of achieving a legitimate aim”. The Supreme Court in the United Kingdom has now ruled that the “legitimate aims” that can justify direct age discrimination are narrower than those that can justify indirect age discrimination.
Indirect age discrimination covers situations in which a workplace provision, criterion or practice puts people in a particular age group (young or old) at a disadvantage. A requirement of obtaining a degree to gain a promotion, for example, puts older people at a disadvantage because of lesser university access for prior generations. Keeping such a policy in place will be lawful if justified by individual reasons that are particular to that employer, such as cost reductions or improving competiveness. This gives employers flexibility to adopt legitimate measures that are appropriate to their individual business needs.
By contrast, the Supreme Court has now stated that direct age discrimination—treating an individual less favourably on grounds of his or her age or age group—may only be justified if an employer is implementing a legitimate public interest. The Supreme Court, in examining European case law, has identified two legitimate public interests that potentially justify direct age discrimination:
Inter-generational fairness—i.e., measures that promote the recruitment and retention of, and the sharing of limited opportunities between, different generations
Dignity—i.e., avoiding the need to dismiss older workers on the grounds of incapacity or under-performance, which may be humiliating for the employee or lead to disputes
Absent a legitimate aim that falls within one of those two categories, it is highly unlikely that an employer would be able to justify direct age discrimination, such as a mandatory retirement age forcing an individual out.
Even if an employer can point to a potentially legitimate public interest, it must establish that it is in fact pursuing the relevant interest. For example, improving the recruitment of young people is potentially a legitimate public aim, but it will not justify discriminating against older employees if the employer, in fact, has no difficulty in recruiting younger employees.
Once a legitimate aim has been established for direct or indirect discrimination, an employer will need to demonstrate that the measure adopted is proportionate. The Supreme Court has confirmed that to be proportionate, a measure must be both an appropriate means of achieving the legitimate aim and (reasonably) necessary in order to do so.
A measure will not be appropriate if it does not achieve the proposed aim, while a measure that goes further than is reasonably necessary to achieve the proposed aim will be disproportionate and impermissible.
It may be more difficult to show proportionality if the stated aim is to preserve the dignity of employees. Arguably, a retirement age of 65 insinuates that once employees turn 65, they are no longer able to do the jobs that they have been doing up to their 65th birthdays. If anything, this practice reinforces rather than dispels discriminatory stereotypes, which will make it difficult to justify.
What Does This Mean for Employers?
Direct discrimination claims are harder to defend than indirect discrimination claims. Managers need to understand that using mandatory retirement ages, while still possible, may lead to tough challenges.
The Supreme Court has provided clarification for employers on how to justify direct age discrimination, but not a definitive one-size-fits-all answer. The identification of legitimate aims is only half the problem, and questions of proportionality will continue to be difficult to answer.
Consequently, if imposing, continuing, or relying upon age-related criteria such as mandatory retirement ages is important to you as an employer, now is a good time to talk to us about the legitimate aim that will be relied upon and how this can be demonstrated for the particular workplace as a matter of fact.