The law clearly states that employees over the age of 65 do not have the right to claim unfair dismissal or redundancy pay. Five years ago, however, John Rutherford and Samuel Bentley decided to challenge these provisions on the basis that they indirectly discriminated against men.
The Court of Appeal has just heard their claim - Rutherford & anor v Secretary of State for Trade & Industry (IDS 765) - and decided that there was no disparate impact on men.
What is the history to the case?
Mr Rutherford was dismissed by Harvest Town Circle Ltd (which subsequently went into insolvency) in September 1998 at the age of 67. He claimed unfair dismissal and redundancy pay. Mr Samuel Bentley was dismissed by Bodner Elem Ltd (also now insolvent) on 9 February 2001 at the age of 73, and claimed the right to redundancy pay.
Both men claimed that the upper age limit was indirectly discriminatory against men as more men than women continue to be employed after the age of 65. But because both their employers had become insolvent and any payment would be made from the National Insurance fund, the Secretary of State was joined as a party to the proceedings.
The employment tribunal decided that the age exclusion had a greater impact on men than women and that the exclusions were therefore indirectly discriminatory. It also said they could not be objectively justified. The tribunal set aside the statutory default age limits on claims for unfair dismissal and redundancy pay and held that it had jurisdiction to hear the claims.
This decision was, however, overturned by the employment appeal tribunal (EAT). The two men therefore appealed to the Court of Appeal, arguing that the employment tribunal had not made any error in law entitling the appeal tribunal to overturn its decision.
What were the correct pools for comparison?
The first question for the court to consider was the alleged disparate impact of the age limit on men as opposed to women. But who should be compared with whom?
The employment tribunal had compared employees between the ages of 55 and 74. In other words, people who are (or might be) disadvantaged by the upper age limit, for whom retirement at 65 had 'real meaning'. This showed that substantially more men than women were affected by the provisions.
The employment appeal tribunal, on the other hand, said that this approach was too narrow. It said that the correct group (or 'pool') should be the whole workforce - people employed between the ages of 16 and 79 - as the upper age limit applied to all of them.
This showed that there was no real difference in the impact of the age provisions between men and women.
What did the Court of Appeal decide?
The court decided that the EAT was correct. It followed therefore that the employment tribunal had used the wrong pool for comparison, because it failed to adopt the approach taken in the case of R v Secretary of State for Employment ex parte Seymour-Smith.
Rather than take a narrow approach, the court said that it should have taken the statistics for the entire workforce to which the age limit applied. It should then have compared the respective proportions of men and women who could satisfy that requirement. Those statistics showed that the difference in the working population between the proportion of men aged under 65 who can comply and the proportion of women aged under 65 who can comply is very small.
The court also rejected the men's argument that the burden of proof directive required the focus to be on the disadvantaged, rather than the advantaged, group in indirect discrimination cases.
Comment
This decision was probably influenced as much by policy considerations as the law. Its impact is limited, however, by the impending age discrimination regulations, which are due to be implemented by 2006. The main issue that they will have to address is the discriminatory impact of mandatory retirement ages.