Compensation for discriminatory retirement
17 July 2008
An Employment Tribunal has held that an employer could not rely on the default retirement age of 65 when it retired an employee on the day before his 65th birthday. The employee's dismissal was therefore discriminatory and he was awarded compensation of over £36,000, including an award of £7,500 for injury to feelings.
In the case of Plewes v Adams Pork Produce Limited, Mr Plewes' contract of employment confirmed that:
"The normal retirement date for all employees is the day before the employee's 65th birthday".
The Tribunal accepted that had the normal retiring age been Mr Plewes' 65th birthday or later, then Adams could have availed themselves of the 'duty to consider procedure' set out in Schedules 6 and 7 of the Employment Equality (Age) Regulations 2006 (the "Age Regulations") and by that route, a fair dismissal could have been achieved. However, Adams' error was to proceed as if Mr Plewes' normal retirement age was 65 or above, when in fact, his and Adams' normal retirement age, as evidenced by the contract of employment, was the day before his or an employee's 65th birthday.
Adams were unable to advance any alternative interpretation of the retirement clause in Mr Plewes' contract of employment, asserting instead that it had had a genuine belief that it was able to dismiss him in accordance with that contract and that it had therefore mistakenly assumed that it had only to follow the 'duty to consider procedure' under the Age Regulations for the dismissal to be fair.
As a result, the Tribunal held that Mr Plewes' dismissal was unfair and, in the absence of any objective justification for a lower retirement age under 65, discriminatory. Further, given that Adams conceded that it did not follow a statutory disciplinary procedure as a result of its mistake over the retirement date, the Tribunal also applied the maximum 50% uplift to the compensatory award.
The tribunal's decision (albeit perhaps not the level of compensation awarded) is unsurprising given both the express wording of both Mr Plewes' contract of employment and the Age Regulations. However, it does serve as a reminder to employers that they should continue to audit their employment documentation to ensure ongoing compliance with the Age Regulations, particularly in regard to what contracts of employment set out in relation to normal retirement age.
Further, whilst the Tribunal decision is not strictly binding, employers who regularly retire their employees immediately prior to their 65th birthday (e.g. either on the day before or on the working day before where their 65th birthday falls at the weekend or on a bank holiday) must now look to revise such practices.