The latest Office for National Statistics Labour Market data reveals that the employment rate of those aged 65 and above has doubled over the past 25 years. Undoubtedly this trend will at least loosely be linked to the abolition of the default retirement age of 65 years old in 2011. It is also not inconceivable that turbulent financial conditions in recent years in light of the pandemic and cost of living crisis have encouraged older employees to continue working beyond the old default retirement age.

Regardless of the reason for the trend, there are several positives to this trend in that experienced employees are working into their older years providing benefit to both businesses and hopefully passing on skills and knowledge to more junior employees. Equally, although ageing does not necessarily equate to poor health, it is fair to assess that older employees are more likely to experience health conditions that impact on their performance. This brings some unique performance challenges to employers in the motor industry given the attention to detail and physical attributes needed in some roles.

This article will outline the biggest potential threat in this area to employers, that being age discrimination, before then exploring the best practice to manage poorly performing older employees.

Age Discrimination

Age is a protected characteristic under the Equality Act 2010, which protects against direct and indirect discrimination, victimisation and harassment of employees of any age. Unlike the other protected characteristics, it is possible in certain circumstances to justify direct as well as indirect age discrimination. Part 5 of the EqA 2010 protects a wide range of individuals within the field of employment, occupation and vocational training.

For example, this protects against employers going ahead and forcing an employee to retire on the basis of their age. If an employer did in fact force an employee to retire on the basis of their age, this could be very costly as it can potentially give rise to an age discrimination claim. The consequences of age discrimination being proved are substantial. The Employment Tribunal can award unlimited compensation, which can include an award for injury to feeling and financial loss because of the discrimination.

Managing poor performance with older employees

Where an older employee’s performance does drop off, they should be treated like any other employee with capability problems. What that means is that your business’s disciplinary/capability procedures should be adhered to, which is likely to involve an investigation into what is causing the performance issues. In our experience, there is a tendency for there to be medical issues intertwining with performance issues with older employees, often meaning any performance investigation involves accompanying medical evidence.

Where the investigation finds that there may well be medical reasons for declining performance, for example a mechanic who develops mobility issues due to a bad back, a medical report or an occupational health (‘OH’) report are crucial. A good medical or OH report will diagnose the medical issue, take into account the employee’s job role and responsibilities, and recommend reasonable adjustments if there are any.

If it transpires after a reasonable period of procedure including potentially warnings and any implementing any reasonable adjustments that the employee still is not capable of performing the job any more, then the employer, provided he’s laid a solid paper trail to that effect, may be able to fairly dismiss the employee on those grounds alone. The importance of making and keeping notes during the investigation stage as well as retaining any medical report is critical to mitigate against any Employment Tribunal claim that you as the employer may face.

Setting a retirement age

Given the Government removed the default retirement age, their intentions were clear that they did not want to hold back older employees who want to continue working. As such, they are trying to move away from having a defined retirement age. With that said, it is still potentially legal to set a retirement age within your business provided it is justified in regard to the following questions:

1. That the employer is trying to achieve a legitimate aim; and

2. That the employer setting a retirement age is a proportionate way of achieving that aim.

However, if the employer wants to take this approach, it is not without its risks and to mitigate such risks evidence would be needed to support the above questions. One reason could be that the retirement age set is to uphold health and safety standards, to evidence this the employer would need to demonstrate that the risk relates to a specific activity, and it is at a high level in a particular age group. It is unusual in the car industry for employers to specify a default retirement age given risks around age discrimination. Under the circumstances most employers tend to address any health and safety issues linked to the age/health of an employee on an ad hoc basis and seek medical evidence where appropriate.

It is still rare for employers to argue successfully in Tribunals for a default retirement age except in certain very high risk jobs.

Don’t forget, this advice is general in nature and will need to be tailored to any one particular situation. As an RMI member you have access to the RMI Legal advice line, RMI template documents, including a disciplinary process, as well as a number of industry experts for your assistance.


Motor Industry Legal Services

Motor Industry Legal Services (MILS Solicitors) provides fully comprehensive legal advice and representation to UK motor retailers for one annual fee. It is the only law firm in the UK which specialises in motor law and motor trade law. MILS currently advises over 1,000 individual businesses within the sector as well as the Retail Motor Industry Federation (RMI) and its members.