Age discrimination: case study

Ravi Shanker of Clyde & Co concludes this month's series of articles on the Employment Equality (Age) Regulations 2006 with a case study on retirement.

Scenario

Shangri-La, a large restaurant, has recently been taken over by new management. The new management intends to make over the restaurant to give it a 'trendy and contemporary' look to appeal to young professionals.

Chang, aged 59, is one of the restaurant's waiters. Chang finds it difficult to keep up with waiting tables, particularly at busy times, and he tires more quickly than the younger employees, which has led to staff and customers making complaints.

Shangri-La has come to the conclusion that Chang is too old to continue working as a waiter. It has decided to terminate Chang's employment to prevent further complaints. Shangri-La is keen to ensure that it complies with the Age Regulations in dealing with Chang. Shangri-La has a normal retirement age of 60.

Can Shangri-La retire Chang at its normal retirement age of 60 without breaching the Age Regulations?

As Shangri-La has a normal retirement age that is under 65, it would need to be able to justify this age objectively and follow the procedural requirements set out in the Regulations in order for Chang's dismissal to be deemed to be retirement. To justify objectively its normal retirement age, Shangri-La would need to show that it is a proportionate means of achieving a legitimate aim. The fact that the restaurant is promoting a 'young look' is unlikely to qualify.

An alternative line of defence could be to assert that being of a particular age is a genuine occupational requirement for Shangri-La's waiters. However, while the principle of authenticity in ethnic restaurants has been used successfully as a defence in race discrimination claims, it is unlikely that such a defence would be accepted by the tribunal on grounds of age.

Shangri-La decides to retire Chang. What is the first step that it must take?

At least six months but no more than one year before the intended retirement date, Shangri-La must notify Chang of its intention to retire him, the intended retirement date and his right to request not to retire.

What action must Chang take if he wishes to continue working beyond the retirement date?

At least three months but no more than six months before the intended retirement date, Chang must make a request not to retire. His request should set out whether he wishes to continue working indefinitely, for a stated period or until a stated date.

How should Shangri-La respond to Chang's request not to retire?

Upon receipt of Chang's request, Shangri-La must either agree to the request or hold a meeting to discuss the request, within a reasonable period, before reaching its decision.

If Shangri-La decides to extend Chang's employment beyond the intended retirement date, it must notify Chang of this in writing and set out whether he is being permitted to continue working indefinitely, for a stated period or until a stated date. If Shangri-La decides to refuse Chang's request not to retire, Chang should be notified of his right to appeal the decision.

What are the grounds upon which Shangri-La can refuse Chang's request to continue working?

Under the Age Regulations, Shangri-La is not required to give a reason for refusing to grant Chang's request not to retire. It would, however, be good practice for it to have some objective justification for the refusal.

Chang turns 60 in April 2007. However, Shangri-La has a number of group bookings for March 2007 and is considering dismissing Chang before this busy period. Could his dismissal be deemed to be retirement under the Age Regulations?

No. If Shangri-La dismisses Chang before he reaches its normal retirement age of 60, the dismissal will be deemed not to be by reason of retirement under the Age Regulations.

The next topic of the week article will be the first in a series on the Occupational and Personal Pension Schemes (Consultation by Employers and Miscellaneous Amendment) Regulations 2006 and will be published on 5 June.

Ravi Shanker is a solicitor at Clyde & Co (ravi.shanker@clydeco.co.com).

Further information on Clyde & Co can be accessed at www.clydeco.com.