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News round up

27/01/12

Alessandra Gettins reports on the latest employment news: looking ahead to the 2012 Olympics; the application of the new qualifying period for unfair dismissal; publication of the most recent tribunal statistics; and a recent case focusing on the implications of the abolition of the default retirement age.

Acas issues guidance to employers on the 2012 Olympics

Acas have recently issued guidance for employers on their legal obligations to employees who wish to fulfil volunteering commitments at the 2012 Olympics. It advises employers to begin discussing this with their employees now to ensure their expectations are properly managed and to ensure any potential impact from the games does not effect efficiency and productivity.

The article can be located here.  If you are looking to put together guidance for employees on this matter we would be happy to advise in more detail.  In addition we are also able to review any current volunteering policies to see if they are sufficient for the purposes of the 2012 Olympics.

Unfair Dismissal Qualifying Period

As indicated in previous Employment Eye articles, the qualifying period for unfair dismissal will increase from one to two years on 6 April 2012.

Although the Department for Business, Innovation and Skills (BIS) has not yet made a formal announcement, it has indicated that, subject to Parliamentary approval, the new two-year qualifying period will only apply to employees whose employment begins on or after 6 April 2012. Therefore, those already in employment at this time will qualify for unfair dismissal rights after the current one-year qualifying period.  We will update you when the position is formallyconfirmed by BIS.

Tribunal Statistics

The quarterly tribunal statistics have now been published for the period from July to September 2011.  When compared with the same quarter in 2010 the statistics show that there has been a 30% decrease in overall claims to employment tribunals.

A full run down of the statistics can be found here.  

Age Discrimination following the abolition of the default retirement age.

The decision in Seldon v Clarkson, Wright and Jakes is imminent from the Supreme Court.  Running alongside the abolition of the default retirement age (which came into force on 6 April 2011, under the Employment Equality (Repeal of Retirement Age Provisions) Regulations 2011) this case explores whether or not a rule requiring partners in a firm of solicitors to retire at 65 was a proportionate means of achieving the legitimate aims of workforce planning and providing associates with promotion opportunities.  The decision may therefore have a significant impact in setting guidelines for the future of justification arguments in ‘retirement’ dismissals.

Following 6 April 2011, employers can still retain fixed retirement ages, however to do this they must ensure they are justified and that they can show that:

  • A real business need (that is, a legitimate aim) is being met.
  • Having the particular retirement age meets that aim.
  • It is proportionate to use that retirement age as a means of meeting that aim.

Employers will need to demonstrate that a balancing act has been carried out, weighing the discriminatory effect on the employee against the benefits achieved for the business and considering whether the aim can be met by less discriminatory means.

The arguments of justification, i.e. the “legitimate aim” of the employer, has been examined closely in the Seldon case, which has reached the Supreme Court and in which judgment is now awaited. The case involved a “retired” equity partner in a solicitors firm whose partnership agreement included a provision for retirement at 65. The three “legitimate aims” for the retirement age which were run by the firm were;

  • Ensuring associates were given the opportunity of partnership after a reasonable period;
  • Facilitating the planning of the partnership and workforce across individual departments by having a realistic long term expectation as to when vacancies will arise; and
  • Limiting the need to expel partners by way of performance management, thus contributing to the congenial and supportive culture in the firm

The first two claims together made up the “dead man’s shoes” argument and the third the “collegiality” argument.

The ET accepted all three arguments on justification. In the EAT, however, Mr Seldon lost on the first two but succeeded on the third (primarily because the EHRC, which supported the appeal,  produced evidence to show that there was no basis for an assumption that performance tailed off at 65 and that, in fact, statistics showed that it did not really start until 70).

The matter then proceeded to the Court of Appeal (CA) following an appeal from Mr Seldon.  He was, however, unsuccessful.  In short, the CA held that the aims put forward by the firm were “legitimate”.  The CA confirmed that the ”legitimate aims” succeeded on the basis that they were consistent with the Government's social policy justification for the regulations. 

A further appeal was lodged and heard by the Supreme Court on 17 January and we are currently awaiting the outcome. It is anticipated that the decision and arguments will provide very useful – if perhaps, rather general - guidance on the extent to which employers can seek to rely on these “legitimate aims” arguments in the context of retirement.

We will put together a full summary of the judgment when it is published and will provide further guidance on this key issue.  In addition, our first employer seminar of 2012 (to be held in March, date to be confirmed) will consider the Employment Equality (Repeal of Retirement Age Provisions) Regulations 2011 in detail and discuss issues around “retirement” going forward in light of this legislative development.

Disclaimer

This update is intended to give general information about legal topics and is not intended to apply to specific circumstances. Its contents should not, therefore, be regarded as constituting legal advice and should not be relied on as such. In relation to any particular problem that you may have you are advised to seek specific legal advice.

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