Legal experts are warning that trying to force employees to retire against their will could lead to hefty payouts, after a former company accountant won £182,000 for age discrimination.
John Peters successfully argued in a Liverpool tribunal that his former employer, Rock Oil, had unfairly dismissed and discriminated against him in a bid to get the now 69-year-old to retire.
Peters won his case last November and received his £182,000 compensation – which covered loss of earnings and benefits, injury to feelings from age discrimination, and an extra payment for Rock Oil’s failure to follow the Acas Code of Practice – earlier this year.
The Warrington-based lubricant company alleged it finally dismissed Peters, who was aged 67 at the time, on conduct issues.
However, Peters, who had worked for the company for 16 years, claimed his former employer pushed him out because they wanted him to retire at 65 and had even gone as far as to recruit his replacement in anticipation of this.
After Peters went on a lengthy period of sick leave for work-related stress following a particularly hostile meeting with the company’s management, the tribunal was told the business then failed to follow the recommendations of two medical reports designed to help the accountant return to work.
The tribunal also heard the company lied to Peters about his bonus, told him to return his company car while he was on medical leave and refused to provide him with the information he needed to refute the allegations made against him.
“When the claimant indicated that he did not intend to retire, the management trumped up charges against him in what can only be described as a threatening manner,” the judgment read.
The tribunal also found that Rock Oil singled out the accountant for investigation and determined that the allegations “would not have been brought against a hypothetical company accountant who had not reached retirement age”.
Karen Jackson, managing director at discrimination specialist law firm didlaw, told People Management: “This case demonstrates, quite rightly, what happens when a dismissal is disguised as something else. It’s a very expensive mistake to make when an employer could be responsible for loss of all future earnings if the person cannot find another job, which is unlikely past a certain age.
“Having an open dialogue about retirement plans and offering older staff alternatives to retirement is a much better way to behave.”
Adrian Crawford, employment partner at Kingsley Napley, added: “For some time now there has been no exemption from age discrimination claims for compulsory retirements so employers have to deal with these cases on an individual basis. If they do not have genuine reasons for dismissal – for example, capability, conduct or redundancy – a substantial award of compensation could be made.”
Peters’ lawyer, Ian Seabury of Seabury Beaumont, remarked: "If a fixed retirement age cannot be justified under the Equality Act, the clear lesson from this particular case is that, faced with an employee who has made clear their intention that they do not wish to retire, an employer will need to tread very carefully in trying to push an employee down a path they do not want to go down, so as to avoid any allegation their actions are intended to force retirement."
Rock Oil declined to comment.