May 16

Landmark ruling on compulsory retirement age.

A landmark ruling by the UK Supreme Court last week has said that employers are entitled to set a compulsory retirement age if they can prove there is a legitimate reason for doing so. This is despite the change in the law last October which stopped employers compulsorily retiring workers at 65. The important distinction with this ruling is that the Court only said it was acceptable to force an employee to retire, not that it was acceptable to force a retirement at 65. It is therefore possible to justify a retirement age, not the retirement age of 65.
The Court set out new guidelines enabling an employer to dismiss on grounds of age, as follows:

  • They must consider a range of alternatives to retirement
  • They must be able to show specific public interest justification in each 
case where retirement is imposed – ie:
  • It will make it easier to recruit younger workers
  • It will enable promotion of middle management
  • It will enable employers to plan their workforce for the future and train others
  • It will enable the careers of older workers to end with ‘dignity’, rather than being dismissed for poor performance
  • They need to show they have considered other options such as flexible working hours or allowing employees to stay on for a short period.

What is important is that employers need to show these aims are legitimate and are being genuinely pursued. For example, improving the recruitment of young people in order to achieve a balanced and diverse workforce is, in principle, a legitimate aim. However, if in fact there is no problem in recruiting the young and the problem is in retaining the older and more experienced workers then it may not be a legitimate aim for the business concerned.
The situation following this ruling ought to be welcomed by employers. The legislation that came in to force in October, preventing compulsory retirement at 65, caused uncertainty as they were worried about asking workers aged 65 or over to leave the business for fear of being accused of ageism. This Court ruling has made the law clearer in that it reinforces the fact that workers cannot be retired just because of ‘stereotypes’ of age, but is very clear about the fact that they can be forced to retire where a business can justify a compulsory retirement age based on legitimate aims, provided they are proportionate.

This Court ruling has not specified what the correct age is to retire somebody – rather, it has sent the clear message that the abolition of the default retirement age of 65 does not mean employees cannot be retired at a given age, it just means it needs to be a more considered decision than previously was the case.

April 1

Allocating paid time off work . . .

With an extra bank holiday in 2012 employers should be planning how to deal with holiday requests.

Last year we had the Royal Wedding. This year we have another extra bank holiday to celebrate the Queen’s Diamond Jubilee on Tuesday 5 June 2012. How should employers deal with this and more general questions surrounding holidays from work?

Are all staff entitled to the day off on 5 June 2012? 
Not necessarily and some employers will have to keep their businesses running on that day. There is no statutory right to paid time off on bank and public holidays, although all workers are entitled to 5.6 weeks’ holiday each year. Employers need to check what the employment contract says. If it says employees are entitled to 25 days’ paid holiday plus all bank and public holidays they will be entitled to take the extra day and be paid for it. If it says 25 days’ holiday plus the usual bank and public holidays then they would not. If they wanted to take the extra day’s holiday they would have to request a day’s holiday in the usual way.

What about part-timers?
 Some employers give paid time off for public holidays to part-timers who would otherwise work on the day the holiday falls. That approach obviously works in favour of those part-timers who work Mondays since most public holidays occur on that day, but disadvantages those who do not. The better option is to give part-timers pro-rata entitlement to holidays and public holidays so those workers are not treated less favourably than full-time staff. So, if full-time staff are entitled to 25 days, plus all public holidays, someone who works 50% of full-time hours will be entitled to 12.5 days plus four of the public holidays (4.5 in 2011 and 2012).

This may mean that employees who work Mondays will not be entitled to be paid for all the public holidays they take off and should be given the option of treating the extra days as unpaid leave or taking it out of their remaining holiday entitlement. Conversely, those who do not work on Mondays may have more pro-rata public holiday entitlement than the number of public holidays which fall on their normal working days and they will have to take those off at other times. Employers should try to be consistent in the way they treat all part-time staff.

Is ‘first come first served’ the best way to deal with holiday requests? 
One of the difficulties with this approach is that it is not always clear whose request came in first. Another problem is that some employees may put in a request so early, as a matter of course, that no one else stands a chance of getting in first. Generally speaking, ‘first come first served’ works well, but it might be better for staff to take turns if there is a particular holiday period that tends to be popular, for example, the school holidays or the days between Christmas and New Year, or around the Easter break.

Are compulsory shutdowns a good alternative?
 Possibly, however, before requiring everyone to take leave, employers should consider whether this creates a particular disadvantage for workers sharing a protected characteristic (such as sex, religion or belief) who may need to take their annual leave at other times, for example, during school holidays or religious festivals. If an employee brought an indirect discrimination claim along these lines, the employer would need to show that the shutdown was justified – in other words a proportionate means of achieving a legitimate aim. If the employer is in a sector which traditionally shuts down over Christmas – for example the construction industry – they may be able to argue that there is an operational need for them to have a shutdown because there is no work to do and that this amounts to a legitimate aim. However, they would need to show they had considered the needs of their workers in assessing whether the shutdown was a proportionate means of achieving that aim. The other point to bear in mind is that if staff were previously free to choose when they took holiday, requiring them to take it at a particular time is likely to amount to a change in their terms of employment. If the employees’ consent cannot be obtained there may be the risk of claims for breach of contract or constructive unfair dismissal.

February 6

2012 . . . a summer of absenteeism?

With the Olympics descending on London this summer, employers should plan ahead to minimise the risks posed by abnormally high demand for holiday, absenteeism and travel disruption around London and the other Olympic venues.

According to a recent survey of 1,200 organisations conducted by BT, the general view of the Games is positive, but the report also found that just under a third of respondents, 29%, had yet to make even the most basic preparations for the Games.

If you have not already done so, now is the time to start preparing your organisation for the Olympics. With 100 days of travel disruption expected in London – from the Queen’s Jubilee Celebrations at the beginning of June to the close of the Paralympic Games in September – employees are likely to face disruption to their journeys to and from work, especially if travelling at peak times. Some organisations are considering altering working hours or introducing temporary flexible working over this period.

The risk of absenteeism is also high, as indicated by a recent survey which found that as many as 1 in 6 employees would consider pulling a ‘sickie’ to watch the Games. Employees should be reminded of the Company’s policy on absenteeism and make it clear what behaviour will be considered acceptable. State clearly that unauthorised absences from work will be investigated as a disciplinary offence.

You are also likely to experience a higher than usual demand for leave over the period of the Games and an effective system will be required to deal with competing requests fairly – whilst still ensuring employers have adequate staffing levels to conduct their business over the Games. Employers may choose to develop a specific holiday policy for the Games with leave authorised subject to business need, by random selection or on a first come first served basis. An employer who is flexible and permits employees to watch key events at work may help to minimise unplanned absences.

You could also consider introducing temporary flexible working measures, such as allowing employees to work through lunch, leave early, modify start and finish times, or allow shift workers to swap shifts. You will, however, need to consider the consequences of offering preferential treatment to Olympic and Paralympic fans compared to other employees who have made unsuccessful flexible working requests in the past.

With many employees having spent considerable sums on tickets, they should be encouraged to submit their holiday requests as early as possible to avoid disappointment. A further 1 million tickets to the Games will be going on sale in April 2012. If you are unable to authorise any further holiday this should be clearly communicated to employees before the ticket ballots open to avoid employees buying tickets they will be unable to use – especially as they are non-transferable!