Employment Update - 13 March 2009

ECJ delivers judgment on Heyday case

Following the Opinion of the Advocate General, the European Court of Justice (ECJ) has confirmed in the Heyday case that legislation which provides for compulsory retirement at 65 is permitted under the Equal Treatment Framework Directive if it can be justified by reference to a legitimate aim. It is now for the High Court in the UK to determine whether retiring employees at the age of 65 is justified by a legitimate aim and whether the means of achieving that aim are appropriate and necessary.

Back in December 2006, Age Concern, operating as Heyday, challenged the provisions in the Employment Equality (Age) Regulations 2006 (the Age Regulations) allowing for the compulsory retirement of employees at 65. It also questioned whether the kinds of treatment which may be justified should be defined by a list.

The ECJ has now confirmed that there is no need for types of permissible age discrimination to be specifically listed in the Age Regulations. However, the ECJ distinguished between aims that may be considered legitimate, and therefore capable of justifying age discrimination, and individual reasons which are particular to the employer's situation. Aims which may be considered legitimate are social policy objectives, such as those related to employment policy, the labour market or vocational training. The public interest nature of these legitimate aims are therefore distinguished from reasons such as cost reduction or improving competitiveness. The ECJ did note, however, that employers may be afforded a certain degree of flexibility in the pursuit of these legitimate aims.

The ECJ's decision is not surprising. It is the next stage of the challenge that will be of most significance, when the High Court examines whether the UK retirement age of 65 can be justified by a legitimate aim and whether the means of achieving that aim are appropriate and necessary. It is also worth noting that irrespective of the outcome of the Heyday challenge, the Government will be reviewing the retirement age in 2011 so this will remain a live issue in the UK.

Age bar is discriminatory

A tribunal has confirmed that a blanket bar banning recruits aged 36 or over from applying to become an air traffic controller was direct age discrimination and could not be justified.

In Baker v National Air Traffic Services Ltd (NATS), the claimant applied to become a trainee air traffic controller. His application was rejected because, at the age of 50, he exceeded the age bar of 36. He subsequently brought a claim of direct age discrimination under the Age Regulations in respect of the age bar operated by NATS.

NATS tried to justify their discriminatory policy on the basis of a number of aims, including a need to achieve a high success rate in training, concerns about safety and a need to secure a reasonable period of service. However the tribunal rejected the evidence produced to support these factors saying:

• success could not be predicted by age; 
  
  
• the evidence submitted by NATS did not suggest any link between age and length of service; and 
  
  
• there was no evidence to suggest that safety was compromised by older recruits. Safety is ensured by proper training, appropriate testing and monitoring. 

The tribunal concluded that NATS' approach to the issue of age had been driven by the need to rationalise a fixed intention to maintain an age bar and back up its "received wisdom" that an age bar was justified. There were a number of flaws in its approach. In particular, NATS had failed to explore any other ways of achieving its aims without imposing an age bar e.g. by using monitoring to deal with the perceived risk posed by older workers or following the example of other countries where no age bar exists. 

Government takes action to boost business certainty

The Government will pilot a one stop shop for advice on health and safety and employment legislation under new measures aimed at helping businesses comply with the law and save time and money.

The Government has committed to take a variety of steps including:

• piloting a telephone advice service to help businesses comply with employment and health and safety law; 
  
  
• removing disclaimers which bring the accuracy of guidance into question; 
  
  
• setting out when it will update the most frequently used guidance;
  
  
• having a 'quick start' summary for each piece of guidance, setting out essential actions firms must follow to comply with the law; and
  
  
• creating a central contact point for reporting inconsistent or inaccurate guidance, with an obligation on government to respond and resolve the issues.
  

EHRC: inquiry into sex discrimination

The Equality and Human Rights Commission (EHRC) has published further information on its formal inquiry into sex discrimination in the financial services sector.

The Minister for Women and Equalities, Harriet Harman, invited the EHRC to consider how it might address the evidence of sex discrimination in the financial services industry. The Commission agreed that this was an important area for investigation and in December 2008 initiated an inquiry under the Equality Act 2006, with the aim of discovering evidence on:

• the underlying causes of the gender pay gap in the sector;
  
  
• the alleged culture of sex discrimination including harassment and sexual exploitation;
  
  
• absence of diversity in the leadership of the sector;
  
  
• the likely differential impact of job losses given current economic conditions; and 
  
  
• the degree to which greater diversity delivers more successful sound decision-making.

The final terms of reference for the inquiry will be published later this month, with the findings of the inquiry set to be published in July 2009.  

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