Retirement age: Hewitt's shameful surrender

The Government's decision to impose a mandatory retirement age of 65 is incompatible with effective age discrimination legislation, as it forces an employee to leave their job when they reach an arbitrary birthday, argues Michael Rubenstein.

Mandatory retirement is age discrimination personified. What could be more arbitrary than forcing an employee out of their job because they have reached an arbitrary birthday, regardless of their competence, regardless of their circumstances, regardless of whether the employer has any justification? How is it possible to reconcile forced retirement with the "opportunity society" promised by the prime minister at the 2004 Labour Party Conference, a society "where nothing in your background, whether you're black or white, a man or a woman, able-bodied or disabled stands in the way of what your merit and hard work can achieve"? Nothing except your age, it seems.

A mandatory retirement age is incompatible with effective age discrimination legislation. It negates the message of the law that age should not be taken into account in decision-making. It will undermine the potential effectiveness of the law in dealing with age discrimination against workers as they approach retirement age, by providing a ready-made excuse for employers. It is the failure to recognise this in any way, shape or form that makes Patricia Hewitt's decision to impose a default mandatory retirement age so shocking to those who care about equal opportunities.

According to her statement to parliament on 15 December 2004, the forthcoming age discrimination legislation will provide for a "national default retirement age" of 65. Employers who wish to set a retirement age for all or some of their workforce below 65 will have to objectively justify this. There will be a right for employees who want to continue to work beyond the default age or their employer's own retirement age to "request" the right to work longer. There is no promise to abolish mandatory retirement in the future either. Instead, there will be a formal review "firmly grounded in evidence" five years after the legislation comes into force in October 2006.

Legal implications

The Department of Trade and Industry (DTI) is to consult in "summer 2005" on draft Regulations covering implementation of the age strand of the Framework Employment Directive. This will include details of the provisions on retirement age.

These details will have to resolve some key legal issues. How is a "default retirement age" of 65 to be implemented? In the UK, we have a statutory pensions age, and an age after which certain employment rights no longer apply, but we have had no official national retirement age, in the sense of an age at which employees are legally bound to retire in the absence of an agreement to the contrary. Recital 14 to the Directive says that it is "without prejudice to national provisions laying down retirement ages".The language of the Directive thus suggests that it is not sufficient merely to exclude from rights those who are dismissed when they reach age 65. A national retirement age must be laid down (and it is not entirely clear whether it complies with the Directive for a retirement age to be laid down at the same time as age discrimination legislation is introduced).

Unless the UK can fall within the terms of the recital, the government will find it hard to legally justify its blanket exclusion of mandatory retirement from the scope of age discrimination legislation. Article 6 of the Directive only allows differences of treatment on grounds of age where they are "objectively and reasonably justified by a legitimate aim, including legitimate employment policy, labour market and vocational training objectives, and if the means of achieving that aim are appropriate and necessary". Excluding everyone who is dismissed because they have reached 65 from the right to complain of age discrimination does not seem compliant with this emphasis in the Directive on proportionality. The circumstances of each dismissal will vary widely, and proportionality is inimical to "one size fits all" blanket policies.

Also to be determined is the legal status of employees who stay on in employment after reaching 65, whether with their existing employer or with a new employer. Will they be able to complain of age discrimination if they are then dismissed for an age-related reason? Whatever justification there might be for allowing employers to operate a fixed retirement age, different considerations apply once that age has past. Similarly, it is difficult to see the justification for the continued exclusion of employees who work past the default retirement age from the right to claim unfair dismissal.

If employees over 65 are excluded from the right to complain about age discrimination in dismissal, will they also be barred from claiming that they have been discriminated against on grounds of age if they are turned down for a job for which they apply? There is nothing in the Directive specifically to authorise this. If someone 65 or over is employed and considers that their terms and conditions are age discriminatory, will they be able to bring a claim? A person over 65 can claim that they have been discriminated against on grounds of sex, race, disability, religion or sexual orientation. A blanket exclusion from all rights in respect of age-based discrimination would create an underclass of older workers and might well be challengeable in terms of the European Convention on Human Rights.

Right to request continued working

In her statement, the secretary of state announced a right for employees who want to work past the default age "to have their request considered seriously by their employer. This right will follow the model of the right to request flexible working for parents with young children, where it has been successful in changing the culture towards more family-friendly working. This policy will ensure that employers listen to employees who want to keep working and think about whether they can agree."

This is typical of the New Labour spin placed by Ms Hewitt on her climb-down over retirement age. Her department's press release announcing the decision to institute a default retirement age had the temerity to begin: "New proposals to crack down on age discrimination in the workplace were today unveiled . . ."

It is well known that the right to request flexible working is of little consequence in and of itself. The maximum penalty for failure to comply is eight weeks' pay. The "right" is made meaningful because it is the potential precursor to a substantive claim of indirect sex discrimination, where compensation is unlimited.

There is no parallel there with age discrimination. An employee whose request to continue working is turned down will have no recourse so long as the request is given consideration. Facing the indignity of being told they will be forced into retirement because of their age, it must be doubtful whether many workers will want to experience the further indignity of making a "request" to be allowed to stay on at work, and the potential humiliation of their plea being rejected. And why should they have to? Employees do not have to "request" their employers not to discriminate against them on grounds of race, sex or disability in order to secure their rights.

Should the DTI be responsible for employment legislation?

The way in which the decision to permit mandatory retirement was arrived at was quite extraordinary. All the early indications from the government suggested employers would have to objectively justify it. The 2003 consultation sought views on whether "employers should be able to retire their employees compulsorily at or after age 70 without having to justify their decision", but the hints were that there would be no default retirement age at all. At a DTI conference in October 2003, Ms Hewitt noted that "many older people suffer from depression as a result of leaving full-time work too early. This is not about 'work till you drop' - it is about 'choose when you stop'."

Key stakeholders, other than employers, opposed mandatory retirement, as apparently did Ministers at the Department for Work and Pensions, which has a secondary role in implementation of the legislation through its responsibility for retirement issues. The CBI and other employers' groups, such as the EEF, were adamant, however, in insisting on their right to continue to discriminate against older people.

We then had the spectacle of the stakeholders being brought together in a taskforce under ACAS chair Rita Donaghy to see if they could be persuaded to agree with the CBI. To their credit, the representatives of trade unions and the age lobby held firm. With no agreement achieved, the DTI then caved in to CBI demands.

This decision-making process, and its outcome, is illuminating. It highlights that the DTI is very different from the old Department of Employment, which held the ring between both sides of industry. The DTI's own vision statement gives as its first objective that of "supporting successful business" and it proudly boasts that "the DTI is the voice for business success in government." Acting as the mouthpiece for business is a valuable function, but it is open to serious question whether the same government department should have the lead responsibility for implementing legislation conferring rights on workers. When push came to shove, the DTI, and the Secretary of State for Trade and Industry, did what the employers wanted. We should not be surprised, but the lesson should be learned.

Ms Hewitt's reputation

As for the secretary of state herself, Patricia Hewitt's appointment was greeted with enthusiasm by equal opportunities advocates because of her leading role in the feminist movement of the 1970s. Now she is widely regarded as the CBI's poodle. Her record speaks for itself. On her watch, an employment tribunal system that worked tolerably has been turned into an inordinately complex regime, a single equality commission will be established without a Single Equality Act, perpetuating anomalies and institutionalising a hierarchy of oppression.

Like Barbara Castle with equal pay and Roy Jenkins with sex and race discrimination, Patricia Hewitt could have been linked by history with pioneering reforming legislation. Instead, she will be remembered as someone who sold out the rights of older workers.