Legal counsel

Media reports have recently highlighted an increasing concern about how many of us will be impoverished in retirement. While some employees may be forced by financial circumstance to work beyond the age of 65, and with some commentators calling for an increase in the normal retirement age to 70, one would have expected the government to be taking active steps to make it easier for older employees to remain at work.

Somewhat surprisingly, the government has instead announced that it will appeal against a decision made in August which gave thousands of workers aged over 65 the right to claim unfair dismissal and statutory redundancy pay.

Sections 109 and 156 of the 1996 Employment Rights Act provide that an employee cannot claim unfair dismissal or redundancy pay once they have reached or passed the normal retirement age. This age, in the absence of evidence to the contrary, is deemed to be 65.

In Harvest Town Circle v Rutherford, the employment tribunal found that men and women older than 65 could, subject to the outcome of any appeal, submit claims for unfair dismissal and statutory redundancy pay, notwithstanding the provisions of the Employment Rights Act. This decision is not binding on other employment tribunals, and applications submitted to the employment tribunal pending determination of the appeal in this case will probably be stayed in the intervening period.

The government has announced that, in its opinion, this decision should be reversed and that this issue should instead be addressed by age discrimination legislation.

The DTI intends to continue consultation in relation to age discrimination legislation next year. However, such legislation does not have to be implemented until 2006 and, in the interim, clear guidance is needed from the employment appeals tribunal.

In the meantime, employers should not assume that the employment of people approaching normal retirement age can be determined without risk, whether on grounds of redundancy or otherwise. Employers should not assume that the employment of these people can be determined when they reach the normal retirement age for that organisation (or, in the absence of a specific normal age, 65). Rather, they should consult employees and, where employees wish to carry on working, allow them to – unless there are substantial reasons for not doing so.