Hospital Trust’s attempt to avoid age discrimination rules challenged – News – agediscrimination.info

The Royal Cornwall Hospitals NHS Trust has decided to reinstate a number of former employees, all aged over 65, after one of them brought an age discrimination claim.

Ann Southcott worked in the therapy department at Treliske Hospital in Truro, Cornwall, part of the Royal Cornwall NHS Trust. The Trust dismissed her, and around 30 other employees all over the age of 65, before the age regulations came into force to avoid having to make large redundancy payouts and in an attempt to deal with its debt crisis. Ms Southcott, who was 66 at the time she was dismissed, received 11 weeks’ pay rather than the 11 months’ pay she would have been entitled to had she been dismissed a day later.

The age regulations came into force on 1 October 2006 and do not apply to acts which happened before that date. Ms Southcott was over normal retirement age and therefore unable to claim unfair dismissal. As a result, she and her former colleagues had to find another legal basis for their challenge.

The claim

Ms Southcott’s case was backed by Unison, the trade union for public sector employees. Although the decision made at the preliminary hearing is not yet available, it is understood that Unison relied on the European Court of Justice case of Mangold v Helm ( click here for our report on this case) to argue that the age discrimination regulations applied to Ms Southcott even though she was dismissed before they came into force.

Mr Mangold had brought a claim against his private sector employer, Mr Helm, challenging a provision of German law which authorised, without restriction, the conclusion of fixed-term contracts of employment once a worker had reached the age of 52. The ECJ held that this provision was unlawful age discrimination and that the German government had acted illegally in adopting it.

This was controversial because the German government adopted this provision in 2001, five years before it was obliged to implement the EU Directive which requires Member States to prevent age discrimination in the workplace. One of the reasons cited by the ECJ for its decision was that the prohibition on age discrimination is a ‘general principle of Community law’ which is applicable regardless of whether or not the Directive had been implemented into domestic law.

Unison relied on Mangold to argue that the Directive conferred rights on Ms Southcott even before the Regulations came into force in the UK. The fact that she was employed by a public sector employer may have been a key factor, since public sector employees are able to rely directly on EC Directives regardless of whether, or how, they have been implemented domestically. It appears that the Employment Tribunal agreed that, at the very least, this was an arguable point of law as it allowed the case to continue to a full hearing.

Following the Tribunal’s decision, the Trust decided to settle the claim and agreed to reinstate Ms Southcott (and a number of other individuals) with back pay from October 2006 and with no loss of service.

Implications

Dismissing employees aged 65 and above

If Ms Southcott had been allowed to continue with her claim she would presumably have succeeded in showing that her dismissal was age discriminatory and that the upper age limits for unfair dismissal claims and redundancy payments (which were still applicable according to UK domestic law) should be disapplied.

However, in most cases, the dismissal of employees aged 65 or over based on age will not be age discriminatory: the UK government has adopted a mandatory retirement age of 65 which means that an employer can lawfully dismiss an employee because he or she is aged 65 or over so long as the retirement process in the regulations is followed.

That said, in July 2006 Heyday (a membership organisation supporting people approaching or in retirement) applied for a judicial review of the age discrimination regulations, challenging the government’s decision to adopt a mandatory retirement age. The application was referred by the High Court to the ECJ last December ( click here for details).

In the meantime, both public and private sector employers could be exposed to a risk of claims challenging dismissals based on retirement.

Using European law to challenge to the regulations

Claims which pre-date the regulations

The Southcott case raises the question of whether, following Mangold, an employee can bring a claim in relation to acts which took place before 1 October 2006. It appears that, at least in relation to public sector employers, there is some possibility that employees can bring such claims.

However, in most cases, the time limit for complaining of age discrimination is three months from the alleged act. Therefore, even if employees are entitled to bring claims in relation to acts which took place before 1 October 2006, it is likely that many of these claims will now be out of time.

Claims that the regulations do not properly implement the Directive

Perhaps of more significance is the indication that Employment Tribunals are willing to apply the principles set out in Mangold. If this is the case, then this could have important implications for private sector employers.

Under general principles of EC law, it is only public sector employees (who are employed by an ‘emanation of the state’) who can rely directly on an EC directive if they believe that the government has not properly implemented it into domestic law. It has long been accepted that private sector employees cannot do so. Following Mangold, it now appears that both private and public sector employers may be exposed to claims if they rely on certain provisions of the age regulations which are later held to offend the ‘general principle of EU law’ prohibiting age discrimination.

Such claims are likely to relate to the reliance on mandatory retirement ages, the use of age bands when paying national minimum wage and the use of age bands and length of service when paying statutory or enhanced redundancy payments – all currently considered lawful in the UK, but identified as potentially being out of line with the Directive.

For further details on the age discrimination regulations, including the retirement process, please see click here for our InDepth guide to the regulations.

Southcott v Royal Cornwall Hospitals NHS Trust (unreported)