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Justifying Age Discrimination

JONATHAN SWIFT*

ABSTRACT

The characteristics of age discrimination as provided for in the Employment Equality (Age) Discrimination Regulations set it apart from existing anti-discrimination schemes. The ambit of the Regulations is limited to the employment field. Within this area, the legislation does not simply seek to identify a characteristic of a specific minority group and then remove that factor from the decision-making process. Instead, working from a quality common to all (age), the Regulations seek only to prevent reliance on it for pur- poses that are ‘illegitimate’ or if the consequences of doing so are ‘disproportionate’. This is necessary: first because the Regulations do not seek merely to protect discrete age groups, and in practice the interests of persons of different age may well be in conflict; secondly because many decision-making criteria that appear objective are in substance, age-related. In order to sort ‘bad’ discrimination from ‘good’ discrimination a notion of substantive equality must exist. The Regulations themselves give little indication of what equality should mean. There is no existing consensus from which the answer can be drawn, and the rationales that have underpinned previous anti-discrimination legislation are not easily transposed to age discrimination. The practical application of the justifica- tion defence contained in Regulation 3 will shape the substantive meaning of equality in this area. This article seeks to identify what the proper approach should be to the provi- sions of Regulation 3, and suggests that this should be derived from considerations of transparent decision-making, and the need to respect the dignity of the individual.

1. INTRODUCTION

At face value the Employment Equality (Age) Regulations1 appear to present few surprises. Some of the provisions, such as those relating to retirement and pension provision may seem complex or cumbersome, but the basic structure of the legislation is very familiar to employment lawyers, providing for prohibitions on direct discrimination, indirect discrimination, discrimination by way of har- assment, and discrimination by way of victimisation. However, if this is the

* Barrister, 11 King’s Bench Walk Chambers, London. email: [email protected]. This article is based on a talk given to the Industrial Law Society in March 2006, but has its origins as long ago as 2002, in a paper for the Bar European Group annual conference. I would particularly like to thank Timothy Pitt-Payne (of 11 King’s Bench Walk Chambers), who co-authored the 2002 paper, for his comments on this article.

1 SI 2006/1031.

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appearance given by the Age Discrimination Regulations, it is deceptive. In fact the Regulations represent a significant new step in terms of anti-discrimination schemes, and this is a step into the unknown. The unknown factor at the heart of the Regulations is that no clear view is given as to what the substantive content of equality should be in this area. To date, anti-discrimination legislation has sought to neutralise specific factors which might otherwise form part of a decision-making process. In doing so they have reflected a consensus that deci- sions should not be based on factors such as sex, race or sexuality. Although the disability discrimination provisions are more complex and fact-sensitive, they too are rooted in this basic rationale. In each of these schemes the need to remove specific considerations from the way in which decisions are taken means that the content of the equality that is required is clear. The Age Discrimination Regulations do not work from such a premise. First, they do not seek to identify a characteristic shared only by a specific minority. The Regulations are ‘age- blind’, and are not aimed only at persons in discrete age groups. Second, they do not seek to remove age from the decision-making process for all purposes. Built in not only to the definition of indirect discrimination, but also to the definition of direct discrimination is the notion that some forms of age-based decision making are justified.2 The fact that these decisions are lawful highlights uncertainty at the core of the Regulations. What form of equality are the Regulations intended to bring; and how much of it is appropriate?

2. LIMITED AMBITIONS

One apparently superficial aspect of the Regulations that is striking is that the legislation applies only in the employment field. There is no attempt here to reproduce the more wide-ranging schemes that have characterised other anti- discrimination legislation. Yet this should not be regarded as a matter of form or mere coverage since it helps characterise the extent to which the Regulations are intended to be, and can properly be regarded as, an engine not only for legal change but also for social and economic change. The fact that the Regulations are directed only to the employment field, and are not directed also, for example, to businesses that supply the employees who are subject to the Regula- tions strongly indicates the form of equality that underlies the Regulations is limited. In this environment we should be both realistic and pragmatic in our expectations for the Age Discrimination Regulations. Specifically, considerations of pragmatism should guide the proper approach to the meaning of equality in this

2 See in particular, Regulation 3 (including the central justification provision), and also Regulation 32 which in principle permits service-related benefits, including pay.

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area, and as a result, to the circumstances in which less favourable treatment on grounds of age should be regarded as lawful.

The actual scope of the Age Discrimination Regulations is in stark contrast with the lofty (and basically utilitarian) aims of its parent, the Framework Directive. In its preamble, the Directive refers to:

[8]the need to pay particular attention to supporting older workers, in order to increase their participation in the work force

[9]guaranteeing equal opportunities for all to contribute strongly to the full participation of citizens in economic, cultural and social life and to realising their potential.

[11]the attainment of a high level of employment and social protection, raising the standard of living and the quality of life, economic and social cohesion and solidarity and the free movement of persons

By contrast, the provisions of the Age Discrimination Regulations are mundane. The fact that the legislation targeted only at employment issues undermines any credible argument that it is aimed at removing the real inequalities resulting from age (and specifically, old age). This only serves to emphasise the paradox that that the present political climate creates. On the one hand there is an increasing determination to promote equality, by prohibiting more and more forms of discrimination. Yet at the same time there is an increasing acceptance of inequality. Both socialism and traditional social democracy are in retreat and have been for some time and there is little faith in the ability of the state to reduce the inequalities inherent in a market economy, either by an increased level of state control over the economy or by redistributive taxation. Taken together, the consequence is a curious irony. Even in the employment field it would seem that while some inequalities are intolerable (for example unequal treatment between bankers of different ages), others are tolerable (for instance, the hundred-fold difference in the remuneration of a banker and a cleaner who works in the same building, on the minimum wage). Outside the employment field there is no attempt at all to legislate or otherwise regulate the way in which age is an appropriate or relevant consideration when deciding, for example to whom or on what terms services should be provided.

3. THE ‘PROBLEM’ OF EQUALITY IN AGE DISCRIMINATION LEGISLATION

In this context what expectations are sensible and appropriate for the Age Discrimination Regulations; to what extent should faith be placed in the new law as a means radically to change the way in which age is perceived as (or permitted to be) relevant to any decision-making process? The provisions within the Age Discrimination Regulations that are central to this question are those relating to

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the defence of justification. As already indicated, the one matter that sets the Regulations apart from anti-discrimination legislation to date is the possibility that acts which would otherwise amount to direct discrimination are capable of being justified, and as such, lawful. This is expressly provided for by Regulation 3 which (formulated positively) provides for direct discrimination to be lawful if the alleged discriminator can show the treatment identified as ‘less favourable treatment’ to be a ‘proportionate means of achieving a legitimate aim’. Regula- tion 32 is also important on this point. It concerns service related benefits, bene- fits which, at the least, discriminate indirectly on grounds of age and in many instances could properly be regarded as systems of direct discrimination. In rela- tion to such benefits an employer is not required to justify disparate treatment at all if the employee has less than five-years service. If the employee has more than five-years service the disparity will be lawful if it ‘reasonably appears’ to the employer that using length of service as a criterion for determining how employ- ees are paid ‘fulfils a business need of his undertaking’.

Although the availability of justification (in whatever form) is conveniently referred to as a ‘defence’, more properly, these provisions, and in particular Reg- ulation 3, are the ones that that are integral to what is meant by equality in this area, since they identify the forms of age discrimination that are legitimate (and therefore lawful) and those which are not. What equality should mean in this area is a thorny problem. In deciding what the scope of the justification defence should be, courts and tribunals will need to have regard to the conceptual diffi- culties that underlay any attempt at age discrimination legislation, and the fact that as a result of these difficulties there is no clear consensus on what the con- tent of equality here should be.

Conceptually, age discrimination legislation is different from other anti- discrimination schemes. Unlike discrimination law to date, age discrimination legislation does not seek to address the difficulties faced by a discrete group identified by a fixed quality. We are all people ‘of age’, and in the course of a life it is likely that everyone will encounter the benefits and the detriments of age when decisions are taken that concern their interests. Outside the employment field Parliament’s general expectation appears to be that people should have the fortitude to withstand these consequences, or at the least that it is not neces- sary for the law to intervene to define what is permissible and what is not. Within the employment field this is no longer the position, but the fact here that some forms of age discrimination will be lawful because they will be justified means that unlike in other areas the issue is not simply to demonstrate that age has been removed from any decision-making process. The consequence of Regu- lation 3, and for that matter Regulation 32, is that age can be a relevant consider- ation. What is not clear is the extent to which it is permissible to take it into account.

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This leads directly to the issue of consensus (or rather the present lack of any relevant consensus). In relation to sex and race discrimination it is not just 30 years of practical experience that has formed the consensus in these areas. Although in those areas we may still argue as to the practical application of the principle of equality in specific circumstances, there is general acceptance of the substantive requirement of that principle: neither a person’s sex nor their race should form the basis on which they are treated in a specific way. Even 30 years ago this was the premise that underpinned the legislation, and that premise was well-understood. The same cannot be said for age discrimination legislation. Although all would no doubt agree that neither the old or the young should be patronised or prejudged simply because they are old or young, the legislation as drafted is not about simply protecting the old or the young, it is about less favourable treatment on grounds of age. As such there is a conflict at the heart of the legislation not only because in the labour market conflicts of interest exist between the old and the young, but also because the characteristics of age are ones that we all possess and all use when making day to day decisions. If truthful, it is unlikely that there are many people who could honestly say that they have never allowed age to influence decisions relating to others, not merely personal decisions but also practical and professional decisions. Many occupations are dominated by notions of ‘seniority’ and ‘experience’ both of which are closely synonymous with age. Decisions are made on this basis every day. Although it is tolerably clear that the Age Discrimination Regulations are not intended to out- law these considerations for all purposes, the language of Regulation 3 does not permit too many other certainties. What use may be made of considerations of ‘seniority’ or ‘experience’ will depend on the approach taken to the irritatingly vague notion of whether the treatment in question is a ‘proportionate means of achieving a legitimate aim’. Yet the reason why this phrase is irritatingly vague is because as yet there is no consensus, or even leading view as to what equality requires for the purposes of age discrimination.

The existence of the justification defence requires us to distinguish between discrimination in the pejorative (and unlawful) sense, and discrimination in the sense of measured and appropriate choice. Both aspects of the defence as drafted—a ‘legitimate aim’ obtained by ‘proportionate means’—will require Tribunals and other Courts to identify what our notion of equality is for these purposes. Of necessity this will start from case to case; ultimately a more princi- pled approach might emerge.3 Yet regardless of where or when this issue is first addressed, what is important is to appreciate the different notions of equality

3 Although if the application of Regulation 3 comes to be regarded by the appeal courts primarily as a question of fact, the development of a principled framework will be hampered and may ultimately be piecemeal and patchwork.

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that could inform the approach taken to the questions ‘what is a legitimate aim’ and ‘what are the proportionate means of achieving it’.

4. JUSTIFICATION AS DRAFTED

The fact that the wording of Regulation 3 is simplicity itself, has itself been a cause of criticism. Regulation 3 is based on Article 6 of the Framework Directive. Article 6(1) provides:

Notwithstanding Article 2(2), Member States may provide that differences of treatment on grounds of age shall not constitute discrimination, if, within the context of national law, they are objectively and reasonably justified by a legitimate aim, including legitimate employment policy, labour market and vocational training objectives, and if the means of achieving that aim are appropriate and necessary. Such differences of treatment may include, among others:

(a) the setting of special conditions on access to employment and vocational training, employment and occupation, including dismissal and remuneration conditions, for young people, older workers and persons with caring responsibilities in order to pro- mote their vocational integration or ensure their protection;

(b) the fixing of minimum conditions of age, professional experience or seniority in ser- vice for access to employment or to certain advantages linked to employment;

(c) the fixing of a maximum age for recruitment which is based on the training require- ments of the post in question or the need for a reasonable period of employment before retirement.

The original version of the Regulations repeated (as Regulation 3(2)) the spe- cific examples provided within Regulation 6. The final draft of the Regulations omitted these examples on the basis that their inclusion was unnecessary. Regu- lation 3 now provides:

(1) For the purposes of these Regulations, a person (‘A’) discriminates against another (‘B’) if—

(a) on grounds of B’s age, A treats B less favourably than he treats or would treat other persons, or

(b) A applies to B a provision, criterion or practice which he applies or would apply equally to persons not of the same age group as B, but—

(i) which puts or would put persons of the same age group as B at a particular disadvantage when compared with other persons, and

(ii) which puts B at that disadvantage,

and A cannot show the treatment, or as the case may be, provision, criterion or prac- tice to be a proportionate means of achieving a legitimate aim.

(2) A comparison of B’s case with that of another person under paragraph (1) must be such that the relevant circumstances in the one case are the same, or not materially different, in the other.

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(3) In this Regulation—

(a) ‘age group’ means a group of persons defined by reference to age, whether by reference to a particular age or a range of ages; and

(b) the reference in paragraph (1)(a) to B’s age includes B’s apparent age.

The vagueness of the language of the defence in Regulation 3(1) is both a neces- sity and a virtue. First it is wholly consistent with the fact that the justification defence has to be applied on a case by case basis depending on both the specific circumstances of the employee and those of the employer. No legislature could sensibly anticipate the possible legitimate aims that might arise, let alone have any concept how the principle of proportionality would manifest itself in any given set of circumstances. Secondly, simply importing the language of the specific examples provided in Article 6(1) of the Directive runs the risk that Regulation 3 would be applied on the basis that the examples were prescriptive limits rather than merely descriptive examples. Thirdly, the examples actually provided in Article 6, even as examples, are far from helpful when it comes to determining the substantive meaning of equality in this context. Read literally (or even if taken as mere guidance) the examples provided by Article 6 would permit the operation of quota systems (6(1)(a)); the operation of all service- based schemes of remuneration; and the operation of age-based recruitment and dismissal procedures ((6)(1)(b) and (c)). As used in the Directive, these are examples of treatment that is permitted despite the ‘principle of equal treatment’ set out at Article 2 of the Directive. To have this as a starting point would leave little room for any substantive notion of equality to develop since the Article 6 exceptions to the Article 2 principle of equal treatment would have the potential to undermine the principle in its entirety.

The other reason why it is necessary for Regulation 3 to be formulated in flexible terms comes back to the limited ambit of the Age Discrimination Regu- lations. The ‘victims’ of the legislation are employers. Despite the high principles referred to and set out in the Preamble to the Directive, the legislative instru- ment that is meant to achieve these purposes is directed only to a narrow field (employment), and within that field only to persons who—for the most part— will have little influence or control over matters of social and economic policy at anything approaching a strategic level. In these circumstances no purpose would be served by a justification defence that identified specific legitimate aims as if the decisions to be taken were aspects of a planned economy. In the circum- stances that do prevail there would be little point in permitting employers to jus- tify less favourable treatment if they were expected, let alone permitted, to rely only on generalised pre-drafted considerations that are applicable to their own businesses only in the most tangential form. Transparent decision making is possible only if employers are able to formulate for themselves the specific explanations

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for their actions. In turn this allows a substantive approach to equality to develop in a way that is clear and, hopefully, principled.

5. WHAT SHOULD EQUALITY MEAN IN PRACTICE?

A. Legitimate Aims

What is described above as the necessity and virtue of Regulation 3 is also—in the absence of any case law—the basis for practical criticism of it: it is simply too flexible to allow what is and what is not permitted to be predicted. A starting point for some measure of predictability is to consider what aims could be legiti- mate for this purpose. The starting point for this should be to consider what type of fairness/equality the legislation should require.

At a high level of generality there are three obvious arguments/justifications for anti-discrimination legislation. First discrimination is irrational. The argu- ment runs along the following lines. People who exercise significant social power ought to do so rationally. They ought to make decisions by reference to relevant considerations, and to ignore irrelevant considerations. They ought to treat like cases alike, rather than making arbitrary distinctions between cases. So, for instance, to prefer a white candidate over a better-qualified black candidate is irrational, because the difference in race has nothing to do with their respective ability to do the job. Secondly, discrimination is unjust. This is the human rights- based justification for anti-discrimination legislation. The argument is that it is unfair for people to suffer disadvantage as a result of characteristics that are immutable and un-chosen (such as race or sex), or are a fundamental part of their identity (such as religion or sexual orientation).4 Taken to its furthest extent, this approach requires that various desirable goods (including access to work and income) be fairly distributed between the different groups that make up society. Thirdly, discrimination is inefficient. This justification focuses on eco- nomics and overall utility rather than on social justice. From this perspective, a society that tolerates discrimination is a society that systematically underesti- mates the potential of large numbers of its members. Such a society will waste vast quantities of human capital, and on this rationale discrimination is a luxury that simply cannot be afforded.5

4 Although the context is completely different, see R(A) v East Sussex County Council [2003] EWHC 167 per Munby J at paras 86–7, as to human dignity as the core value both of the European Convention on Human Rights, and within Council of Europe states.

5 For further and more detailed analysis of the various notions that are capable of being encapsu- lated within the idea of equality, see S. Fredman, ‘The Age of Equality’ in S. Fredman and S. Spencer (eds), Age as an Equality Issue (Hart, 2003).

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Previous anti-discrimination legislation has been based on a range of consider- ations within the first two of these arguments: treating like cases alike; taking decisions on the basis of merit; and respect for personal integrity and dignity. These explanations are clearly appropriate for legislation aimed at preventing discrimination based on fixed qualities such as race, sex or disability.6 They apply with equal force to the areas of sexuality and religion and belief. The difficultly is that they fit less well in the context of age discrimination legislation. For example, the DTI consultation paper on age discrimination stated ‘the legitimate aim cannot be related to age discrimination itself’ and provided the following example (and response).7

A retailer of trendy fashion items wants to employ young shop assistants because it believes that this will contribute to its aim of targeting young buyers. Trying to attract a young target group will not be a legitimate aim, because this has an age discriminatory aspect.

There are many comments that ould be made in response to this example (not the least as to the bizarre conclusion that it is not a legitimate aim for a retailer to try and attract to his shop people who might want to buy what he has for sale), but for present purposes one point needs to be considered. If this shop owner has to choose between employing an 18-year-old and a 40-year-old, in what relevant sense could these two potential shop assistants be said to be ‘alike’? If in this situation the employer is required to choose on the basis of experience, chances are that the older person will always win. Self-evidently, experience is itself an age-related factor. Yet why should choosing on the basis of experience be the pursuit of a legitimate aim, but choosing on the basis that a younger shop

6 The Disability Discrimination Act (both in its original 1995 form, and as amended in order to implement the Framework Directive) recognised that the implementation of equality for the disa- bled was more complex than in the areas or sex or race equality, yet the clear aim of this legislation was a notion of equality substantially the same as applied in the Sex Discrimination Act and the Race Relations Act. Although direct discrimination could (and still can) be justified (see original section 5(1), present section 3A(1)), the possibility of justification is limited by the accompanying obligation to make reasonable adjustments (original section 6, present section 4A). These two obligations then merge with the consequence that if there has been a failure to make reasonable adjustments, a justifi- cation defence is not available unless it can been shown that treatment would be justified even if reasonable adjustments had been made (see original section 5(5), present section 3A(6)). Thus the scheme of this legislation aims first (through the obligation to make reasonable adjustments) to cre- ate as level a pitch as possible, and second, thereafter to permit justification only to the extent that the consequences of the relevant disability themselves prevent like for like equality (see, the provi- sions of original section 5(3), and present section 3A(3)). As a result, for disability discrimination, the obligation to make reasonable adjustments sets the nature and substance of the equality that is required.

7 DTI ‘Equality and Diversity: Coming of Age. Consultation on the draft Employment Equality (Age) Regulations 2006’ (July 2005) at §4.1.18.

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assistant would make customer’s more likely to come in, not be the pursuit of a legitimate aim for this shop keeper?

Similar points arise if the principle that underpins the legislation is that deci- sions should be taken on the basis of merit: if merit is the benchmark how is the content of ‘merit’ to be determined? If merit is equated with skills and experi- ence this is likely to act in favour of those in their working prime—neither ham- pered by inexperience nor withered by age—and therefore to the disadvantage of both the older and the younger. The rights-based explanations for preventing discrimination also run into difficulties. If the end-point of these explanations is some form of distributive justice, the fair distribution of benefits between per- sons in different age groups brings with it the necessary consequence that some will not be allowed to reach their full potential because of their age.

Thus the short point is that none of the criteria that we use for the purposes of existing anti-discrimination legislation to try and distinguish between decisions that are free from unlawful discrimination and those that are not, are themselves age-neutral. None translates well to this new context mainly because previous legislation has operated by identifying a discrete group and then requiring that the prime characteristic(s) of that group cannot be used as the basis of choice. Age discrimination legislation—and in particular legislation like the present, that is age-blind—cannot sensibly work on the same basis.

Only one well-received argument against discrimination survives this diffi- culty—the argument that discrimination offends the dignity of the individual because it is based on the perpetuation of stereotypes and pre-conceptions, not on matters based in fact. This points to the proper ambit of what is capable of being a legitimate aim. Legitimate aims should be read widely enough to include aims that are related to age (but not age itself, or for its own sake). Not age itself or for its own sake because this is akin to stereotyping. At the least it ought to be clear that, in relation to age, the principle of equality requires this form of rea- soning to be rejected. But this apart, what is capable of being a legitimate aim ought to turn on whether the employer can demonstrate that he did have a par- ticular objective and that that objective was one that he had a reasonable and rational basis for pursuing. A further point to make is that it is important when considering how to apply Regulation 3 not to dwell exclusively on the nuances of what can be a legitimate aim. The issue of proportionate means is an equally important part of Regulation 3 as drafted, and in practice may well be a more sensitive tool by which to evaluate the action that the employer has taken.

One reason for such an approach to the legitimate aim issue is the fact that in many cases it will be difficult to formulate a legitimate aim that is not in some way linked to age. Take the example of an employer who, faced with severe eco- nomic circumstances decides that he has to dismiss half of his workforce on grounds of redundancy. He has to choose which half will be dismissed; but on

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what basis does he/can he choose? Last in first out; first in first out; quotas aimed at retaining an ‘age-balanced’ work force; some form of ‘selection matrix’? On this example, the problems arising under the Regulations could be characterised as ones of indirect than direct discrimination, but the question of what is capable of amounting to a legitimate aim remains the same. LIFO, FIFO, and the quota option are all selection methods that are clearly related to age in one way or another, and will represent aims that impact on the age of the part of workforce that remains. However, depending on the specific circumstances of the employer and his business, each is capable of fulfilling a legitimate business objective. In practice, choosing the selection matrix option is equally likely to offend a rule that prevented legitimate aims being related to age. Selection matrices are often regarded as the magic bullet option for redundancy exercises, but the practical problem (and the reason why they are often the road to perdition rather than sal- vation), is that every matrix is only as good as the criteria within it. Apparently neutral criteria are age-loaded. ‘Skills’ and ‘experience’ are obvious examples that tend to favour those in their working prime. By contrast ‘relevant qualifications’ might well favour those who are younger and have more recently entered the labour market, at the expense of those who are ‘qualified by experience’.

A second reason is that the Regulations themselves do permit age-related objectives to be pursued. The most obvious is Regulation 32 which permits employers to retain benefit schemes based on length of service if such benefits reasonably appear to the employer to ‘fulfil a business need of his undertaking’ either prospectively by encouraging loyalty, or retrospectively by rewarding experience. It would be strange indeed if legislation that in principle permitted remuneration to be based on length of service, did not permit other steps to be taken for like reason, subject only to a qualification along the same lines.

In addition, things capable of being legitimate aims ought to include economic reasons—all economic reasons. On this point the statement provided by the DTI at the time of the consultation exercise is Delphic. In relation to ‘legitimate aims’ the following was stated.8

A wide variety of aims may be considered as legitimate. The aim must correspond with a real need on the part of the employer (or other person or organisation wishing to apply a discriminatory practice). Economic factors such a business needs and consider- ations of efficiency may also be legitimate aims. However, discrimination will not be justified merely because it may be more expensive not to discriminate.

At first blush this is odd because on the one hand it does suggest that some form of cost/benefit analysis can take place—viz ‘considerations of efficiency’; but on

8 DTI ‘Equality and Diversity: Coming of Age. Consultation on the draft Employment Equality (Age) Regulations 2006’ (July 2005) at §4.1.16.

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the other hand it suggests that cost itself should not be determinative. Although it is possible to argue that all an employer is prevented from doing is claiming the existence of a legitimate aim by merely pointing to the existence of an extra cost (rather than a more comprehensive evaluation of efficiency), in practice the attempt to draw this line fails. What something costs is inevitably one aspect— and probably an important aspect—of whether it is efficient to do it.

This guidance from the DTI has led one leading firm of solicitors to provide the following example in its guidance on the Regulations:9

An employer does not allow employees under 25 to drive a company car. It seeks to jus- tify the discrimination on the basis that insurance premiums more than double for this category of employee. An employer is unlikely to be able to justify discrimination on cost alone.

If this is right, this is a problem: if this employer needs employees to drive but cannot afford insurance premiums that cover all his workforce (regardless of age), what is he meant to do? This example provides a particularly hard case since nothing in the Age Discrimination Regulations requires the providers of services (for example, insurers) to provide their services at the same price regardless of the age of the customer/consumer, and the chances are that if one insurer regards drivers under 25 as a poor risk, all others will have adopted the same position, not on the basis that they dislike those under 25 but on a genuine assessment of claim rates over the years.

In such circumstances the approach taken to what is capable of being a legiti- mate aim must be informed by the limited scope of the Age Discrimination Reg- ulations. There is little point in trying to assess the legality of an employer’s actions without taking into account the commercial environment in which he operates. It is important to recognise that an assessment on this basis is not the functional equivalent of, for example, permitting an employer to refuse to employ black workers ‘because his customers don’t like them’. It is clear that the notion of equality within the Race Relations Act 1976 prevents considerations of race from entering the decision making process. It is equally clear that the Age Discrimination Regulations do not require the same approach.10

B. Proportionate Means

One reason why the use of proportionality and approaches related to it have become increasingly common over recent years as a means of distinguishing the lawful from the unlawful, is precisely because they encapsulate a concept that

9 Apologies to Lewis Silkin LLP for, from the many examples available, choosing this one. 10 Regulation 32 being the prime example of this.

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does not itself prescribe any specific level of scrutiny. Rather it permits legality to be measured in specifics on the facts of each case. This is most clear from the jurisprudence of the European Court of Human Rights. The Convention rights that are qualified rights, are framed so as to permit interference by public authorities if (amongst other requirements) the interference is ‘necessary in a democratic society’ for the achievement/protection of various specified interests.

The case law on what is ‘necessary’ for these purposes spawned both the concept of proportionality and its Siamese twin ‘the margin of appreciation’. In short, ‘necessary’ for these purposes did not in fact mean absolutely necessary; rather it was more akin to ‘reasonably necessary’. Moreover, for the purposes of deter- mining what action might be available as reasonably necessary it was accepted that in most cases there would be no necessary ‘right’ answer. On questions as to the substantive application of human rights, public authorities ought to be permitted to choose, albeit within appropriate boundaries. In the human rights context, the benefit of this approach is that it is a mechanism that is sensitive to the specific rights in play in any specific situation. It is also possible, on issues of genuine social and political choice, for proper respect to be afforded to the necessity that democratically elected bodies should not be subject to second-guessing by une- lected judges. By contrast, on issues closer to the expertise of the courts, the margin of appreciation becomes more narrow. For the purposes of the Human Rights Act the ‘margin of appreciation’ has become the ‘discretionary area of judgment’.

For the purposes of the Age Discrimination Regulations, the arguments and considerations that have informed what is the ‘discretionary area of judgment’ in human rights cases are not really in play. The liberty to take a specific employ- ment decision has nothing to do with any notion of democratic accountability. The decisions that will be scrutinised are simply not on the same plane. Never- theless, the language of Regulation 3 does require that some form of leeway should be available to employers, and what will be important is the point at which the level of review undertaken by courts and tribunals will be set. At the extremes, there is, on the one hand, the possibility that in this context propor- tionality will turn out to be something closely akin to full merits review; at the other end of the scale is the prospect of ‘mere’ rationality testing. For labour law- yers, the most obvious source to explore is the case law from Sex Discrimination Act cases. This is a jurisdiction long underpinned by European law, and the lan- guage of the Regulations is not that far removed from the concepts habitually relied on by the ECJ when considering issues of objective justification, usually in the context of indirect discrimination.

In that context the case-law has seen an attempt to find some sort of mid-point between the two possible extremes. In Hardy & Hansons plc v Lax,11 the Court

11 [2005] ICR 1565.

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of Appeal concluded that in considering objective justification, a tribunal was not bound to accept the employer’s view of the matter, but was required to make its own judgment as to whether, on a fair and detailed analysis of the working practices and business considerations involved, the practice was reasonably necessary. On this analysis the approach is not that of the range of reasonable responses; it is a tougher test for the employer to meet; but the employer’s decision is not subject to a full merits review. To the same effect, the EAT in BA v Starmer12 stated that the test was an objective one, and that the while the decision of the employer and the business reasons for it should be respected, they should not be uncritically accepted.

However, there is possible difficulty in simply transposing the approach adopted in the area of sex discrimination to the new context of age discrimina- tion. First, unlike the provisions of the Sex Discrimination Act, the Age Discrim- ination Regulations do work from a premise that in some situations less favourable treatment (rather than merely some forms of disparate impact) on grounds of age should be lawful. Second, the justifications for sex discrimination legislation—the reasons why sex discrimination is a ‘bad thing’—are simply not suitable for wholesale application to the field of age discrimination. They are unsuitable precisely because the Age Discrimination Regulations are not aimed simply at protecting a class of persons identified by a fixed/stable quality. These considerations impact not merely on what ought to be capable of being a legiti- mate aim, but also on the extent to which an employer ought to be permitted to pursue any such aim and the measures he ought to be permitted to use for that purpose.

Yet the ideas that underpin the well-established areas of anti-discrimination legislation, that individuals should be treated on their own merits and that per- sons in a like position ought to be treated alike, can go some way to inform the proper approach to proportionality. These ideas encapsulate basic values of ‘fair play’; they go a long way to give substance to the human rights justification for preventing discrimination—that individuals should be treated with respect and with dignity. In substance this would mean that the proportionate means crite- rion under the Age Discrimination Regulations should require an employer to convince a tribunal of the following. First, that treatment that has been afforded to the claimant is rationally related to the aim he has identified. Secondly, that he has not based the specific action taken against the claimant on uninformed assumptions about the claimant which are based on the age of the claimant. Thirdly, that he has taken reasonable steps to inform himself on all material con- siderations prior to taking action against the claimant. Fourthly that the action taken represents a reasonable balance between the employer’s pursuit of the aim

12 [2005] IRLR 862.

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actually pursued and the cost to the individual of that aim being pursued—i.e. that the action taken against the claimant is not an obviously excessive step hav- ing regard to the benefits that might reasonably be expected to accrue to the employer. This range of considerations ought to achieve a number of objectives. First it will prevent what is proportionate from including action that smacks of stereotyping. Next, it ought to ensure that employers do not believe that, as a matter of course they may adopt actions with severe consequences for particular employees, when in fact those with less severe consequences would do. Finally, it aims to create a position in which a Tribunal is entitled some power of control over the factual merit of an employer’s decision-making, but does not become a court of appeal of fact.

The approach proposed is not that far from the approach taken to justification for the purposes of the Disability Discrimination Act.13 This is not to say that the Disability Discrimination Act is a functional equivalent of the age discrimination legislation; it is not.14 The potential for justification under the Age Discrimina- tion Regulations ought to greater than that permitted under the Disability Dis- crimination Act, if only because in most instances treatment that is to the detriment of one age group (protected under the Regulations) is likely to work to the advantage of another age group (also protected under the Regulations). Going back to the analogy with the Human Rights Act, the situations under the Regulations that are likely to call for serious consideration of the justification defence are not ones akin to that where there has been merely an interference with a qualified right that requires explanation and justification, rather they more closely reflect situations where two competing rights exist,15 and where the importance of one needs to be balanced off against the importance of the other.

13 See, for example, the decision in Post Office v Jones [2001] ICR 805. Following this decision lati- tude is permitted to an employer on a justification defence under section 3A(1) of the Act. However, for the purposes of disability discrimination, it is important to note that no similar latitude is permit- ted in relation to the obligation to make reasonable adjustments (see Smith v Churchills Stairlifts plc [2006] IRLR 41). This underlines the importance of the obligation to make reasonable adjustments for the purposes of that legislative scheme. It is the obligation that makes clear what equality is meant to mean in this area since it requires employers to take positive steps to enable the disabled to ‘compete’ on equal terms.

14 See, on this point, n 6 above, and the importance of the obligation to make reasonable adjust- ments in providing the content of what equality means and requires in the area of disability discrimination. Although under the Disability Discrimination Act some forms of direct discrimina- tion can be justified (see section 3A(1)), ‘traditional’ direct discrimination cannot be justified (see section 3A(4) and (5)). This point was made clear by the amendments made to the Disability Dis- crimination Act in order properly to transpose the provisions of the Framework Directive. The fact that the Age Discrimination Regulations (also derived from that Directive) provide for no similar limitation is the clearest indication that in these two areas equality is not intended to be treated identically.

15 For example, freedom of speech vs the rights of privacy.

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In such situations a greater degree of latitude is required and permitted.16 None of this suggests that issues of proportionate means are ones that are straightforward. In practice the question of proportionality and the search for the grail of ‘fair balance’ require us to compare and measure impacts, explanations and outcomes that are essentially incommensurable. The overall question remains the same: how much equality do we actually want; or more precisely how much inequality are we prepared to tolerate. The answers must always be measured in specifics.17

6. CONCLUSION

In the scheme of the Age Discrimination Regulations the approach to what steps are proportionate will be a crucial matter. Yet although it is necessary to deter- mine the level of scrutiny to be applied to employer’s decisions—i.e. whether for this purpose the role of the Tribunal should be closer to that of a gatekeeper or that of the ringmaster—the most important issue, one that will inform everything else, is what form of equality the Age Discrimination Regulations are meant to achieve. The bete noir of the proponents of age discrimination legislation is the ‘fair innings’ argument—the contention that in the long term, and over the

16 What would be the practical effect of this on the example of the employer with the insurance premium problem? First the tribunal would need to be satisfied that the refusal to pay was connected to a legitimate aim (being the aim that the employer had actually been seeking to pursue). On this example the aim would most likely be some form of economic one relating to the profitability of the business. The next point would be for the employer to establish that there was a factual basis for his assertion that the additional cost would actually be incurred—was it right that insurers generally did charge higher premiums, or had the point simply been assumed without reasonable investigation of what was possible. On this set of facts, the ‘balance question’ would be at the centre of the case: what was the marginal cost to the employer; what was the benefit achieved by this cost saving; what would be the consequence to the employer of obtaining the necessary insurance cover; how (objectively) did the restriction on driving (until the age of 25) affect the employees concerned; how great was the impact (either short term, or longer term) of the temporary restriction on driving on the jobs they were employed to perform for that employer?

17 Another, more difficult example is this. What if an employer has a workforce which comprises a predominantly older, white management group, and a more ethnically mixed (and larger) junior group, and wants to redress the balance so that the composition of the management group reflects the ethnic balance of the overall workforce. He believes that this is both the right thing to do as a matter of principle, and that it will benefit his business by motivating junior employees to see a long term future with the company. He tries to achieve this by two measures. First he introduces a com- pulsory retirement age of 60 (for employees in all grades) knowing that this will increase the number of management vacancies becoming available. Second he introduces a policy that prevents persons aged over 50 applying for promotions. He hopes that this will encourage the younger staff to apply for promotion, and succeed when they do. How is the proportionality of the measures adopted to be determined? What specific considerations ought to influence or determine a Tribunal’s assessment of the benefits for the employer? Should the weight to be attached to these be influenced by the sub- stance of the aim that is actually being pursued? Should the possibility of marginal benefits in pursuit of a ‘laudable’ aim count for the same as significant benefits in pursuit of an aim that is ‘less acceptable’?

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course of a lifetime, we all get a reasonably fair shake of the stick. On this ana- lysis equality and fairness do not turn on a comparison on a snapshot of the treatment of a 55-year-old against that afforded to a 35-year-old, but are content in the knowledge that the 55-year-old was once 35-years-old. The Age Discrimi- nation Regulations do not accept this argument as a governing principle: if they did they would serve little practical purpose at all. But this conclusion alone is not enough to guide the decisions that will have to be made from case to case. At the other extreme, some of the statements contained in the Preamble to the Directive ought to be read with a degree of caution.18 The limited nature of what the operative provisions of the Directive, and the Regulations actually seek to do, appears to rule out the use of either as an engine for wholesale social change. If this is correct, perhaps the substantial form of equality that we should aim for through the Age Discrimination Regulations is one that is rooted in consider- ations of efficiency, and in human rights, requiring employers to respect the dig- nity of their employees when taking decisions that affect them; requiring employers to take decisions that are rational, reasoned and transparent; and pro- hibiting mere stereotyping on grounds of age. This may seem too modest a pro- posal, but those who seek more should really ask whether this Directive and these Regulations are fit for the purpose.

How should the likely benefits to employees in one age group be weighed against the detriments for those in the older age group? And what balance should be achieved between those matters and the specific disadvantage to the 51-year-old who is now prevented from applying for promotion; or the 60 year old who is required to retire?

18 As with any preamble, the one for the Framework Directive contains the usual ‘pick and mix’ selection of statements that are apparently sensible, those that are Delphic, and others probably put there on the basis of diplomatic compromise simply because they were too controversial to be put anywhere near the operative provisions. This said, those paragraphs of the Preamble that refer spe- cifically to age discrimination do seem to focus on first, economic considerations and second, the social protection of older workers.