Do references to “retirement” in settlement discussions necessarily make a subsequent dismissal age discriminatory? In Kelly v PGA European Tour, the EAT supported the Tribunal’s earlier finding that, where such references are purely for presentational purposes and had no bearing on the reasons for dismissal, this was not discriminatory. It serves as a helpful reminder to employers of the potential pitfalls when seeking to terminate senior employees.
Scott Kelly, a former marketing director, was 60 years old when he was dismissed from the PGA European Tour. The Tour sought to bring about a more dynamic marketing approach by introducing a commercial director role; its new CEO had concerns about Kelly’s skills and experience, and whether these would be suited to such a role. His employer attempted to negotiate departure terms, and suggested to Kelly that, to protect his reputation, his departure be presented as “retirement”. He refused to retire and was dismissed by the Tour’s CEO – without following any capability procedure.
Kelly brought a claim that his age had been a significant factor in the decision to dismiss him. The Tour conceded that his dismissal was unfair, so the single matter in dispute was whether there had been unlawful age discrimination. The Employment Tribunal agreed with the Tour’s account of Kelly’s dismissal – that he was not capable of carrying out the commercial director role and the reference to “retirement” was purely for presentational purposes and did not have any bearing on the decision to dismiss.
Kelly appealed the decision on grounds that the Tribunal’s reasons were inadequate and he could not tell why he had lost. He also alleged that the Tour’s failure to conduct a fair procedure masked the real reason for his dismissal, namely his age.
The appeal was dismissed. The EAT found that the Tribunal had accepted the Tour’s version of events and that Kelly had been given this reason by the Tribunal. It explained that while he may not agree with the reason given, this did not give rise to any grounds of appeal and, as an Appellate Court, it could only interfere if the Tribunal’s conclusions were perverse or not supported by any evidence.
Given our ageing workforce, employers may find themselves facing similar situations. While the case is fact specific, and Kelly ultimately lost his appeal, it serves as a useful reminder to take a fully thought through approach when there are concerns about senior employees.
If there are potentially fair reasons for dismissal (in Kelly’s case, this might have been redundancy or capability), employers would be wise to rely upon those. Moreover, employers should be wary of being too accommodating to departing employees by suggesting “presentational” reasons for departure in circumstances where this could backfire and give employees the basis to try and allege discrimination.