10 October 2007
Employment Law News: City Firm Wins Age Discrimination Claim

Johanna Prior, a specialist employment law solicitor with Mayo Wynne Baxter LLP, reports on the latest high-profile age discrimination claim from the fast-paced world of employment law.
Peter Bloxham, the former head of restructuring at Freshfields Bruckhaus Deringer, brought a landmark £4.5 million age discrimination claim against his former employer earlier this year.

This case was the first major test of age discrimination legislation since it was introduced in October 2006. Mr Bloxham accused his former firm of forcing him to retire at the age of 54 because pension reforms made it “economic madness” for him to remain in employment. During the hearing in July Mr Bloxham told the London Central Employment Tribunal that Freshfields had “closed its eyes” to age discrimination laws.

Q. Can discrimination on the grounds of age ever be justified?

A. Yes. Discrimination on the grounds of age may be justified if it is a proportionate means of achieving a legitimate aim. This means that employers are allowed to adopt policies that could lead to discrimination against certain employees as a result of their age. In Mr Bloxham’s case the Tribunal said that the policies “comfortably passed” this important test. This case has therefore been useful in setting some parameters on what can and cannot be justified.
Q. Can employers offer pension schemes which depend on length of service?

A. Pension schemes based on length of service are likely to be justified under the above test if they are used to reward loyalty and experience. These factors are particularly relevant to pension schemes as many employers will want to reward loyalty and experience by providing long serving employees with enhanced benefits. This is likely to be a ‘legitimate aim’ for the purposes of the test.

Q. Can employers enforce a compulsory retirement age?

A. Age discrimination legislation imposes a default retirement age of 65. This means that employers are able to retire employees at or over 65 where the reason for dismissal is genuinely retirement and provided they use the duty to consider procedure which allows employees to request to work beyond their 65th Birthday.

A recent survey showed that many employers have already received requests from employees to work beyond the age of 65, possibly as a result of increased pressure on pensions.

Mr Bloxham argued that he was effectively ‘forced’ to retire aged 54 because his firm introduced a new less generous pension scheme but the Tribunal held that he was not ‘forced’ at all.

On 10 October the Tribunal’s unanimous judgment was that Mr Bloxham’s complaint of discrimination on the grounds of age was not well-founded and it was dismissed.

For further information on this case-study, or to discuss any other employment law issue, please contact Johanna Prior on 01273 775533 or email jprior@mayowynnebaxter.co.uk