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Age discrimination and the “retirement age”

It is unlawful in Australia to discriminate against an individual because of their age. Employers are specifically prohibited from discriminating on the basis of age under Federal and State anti-discrimination laws, and a person’s age is also a protected attribute under the general protections provisions of the Fair Work Act 2009 (Cth).

It is unlawful in Australia to discriminate against an individual because of their age. Employers are specifically prohibited from discriminating on the basis of age under Federal and State anti-discrimination laws, and a person’s age is also a protected attribute under the general protections provisions of the FairWork Act 2009 (Cth).

One example of age discrimination often seen in the employment context is the enforcement of a “retirement age” on employees in a workplace, where an employee is essentially forced to retire upon attaining a certain age.

Unless the imposition of an age limit is an inherent requirement of a job, then it will constitute unlawful age discrimination. A recent decision handed down by the Federal Court of Australia (the Court) on appeal serves as a reminder of the potential consequences of engaging in this discriminatory conduct.

In the matter of Gutierrez v MUR Shipping Australia Pty Limited [2023] FCA399, the Court heard an appeal against an initial decision of the Federal Circuit and Family Court of Australia.

The initial decision had found that MUR Shipping Australia Pty Ltd (the Employer) committed unlawful discrimination against its former Chief Accountant on the basis of his age.

The employee had been employed by the Employer for almost fifteen years before being advised in February 2018 of the Employer’s retirement age requirement. The Employer asked the employee to nominate his retirement date and, when he did, he was advised that his employment would be converted to a fixed-term so that he could train his replacement prior to his retirement.

At first instance, the Employer was ordered to issue an apology and pay general damages to the employee in the amount of $20,000 plus interest. The primary judge declined to make any award of damages for economic loss on the basis that, even though he had been discriminated against, the employee had brought about his own resignation.

Despite a finding in his favour, the employee appealed the decision – in large part contending that the amount of damages awarded to him was manifestly inadequate and did not include damages for economic loss.

The Court agreed with the employee, finding that the primary judge had incorrectly assessed the amount of damages by reference to the seriousness of the Employer’s unlawful conduct towards the employee, instead of asking – what was reasonable compensation for the injuries and disabilities he sustained?

In addition to this, the Court found that the primary judge had incorrectly assessed (or failed to consider at all) the evidence before it. If this had been done correctly, it would have found that the unlawful discrimination committed by the Employer had caused the employee to suffer from an adjustment order (rather than a “mild adjustment order” as initially found) with a subsequent inability to perform full-time work.

The Court assessed the damage sustained by the employee as a “considerable loss of amenity of life, including a diagnosed inability to work, loss of enjoyment of social aspects of his life, and an adjustment order with depression and anxiety”. As a result, the Court revised the amount of general damages – increasing the amount payable to $90,000.

In addition to this, noting the finding that the Employer’s unlawful discrimination had resulted in the employee’s inability to work, the Court considered that an award of damages for economic loss was also warranted. It formed the provisional view that the economic loss sustained was $142,215.56 plus interest (being how much he would have earned up to his proposed retirement date), but invited the parties to provide written submissions.  

Lessons for employers

Forced retirement policies or decisions made to terminate an employee’s employment because they reach a certain age are discriminatory and will, in most cases, be found to be unlawful. As this appeal decision shows, the potential consequences of engaging in such discriminatory conduct can be significant.

Information provided in this blog is not legal advice and should not be relied upon as such. Workplace Law does not accept liability for any loss or damage arising from reliance on the content of this blog, or from links on this website to any external website. Where applicable, liability is limited by a scheme approved under Professional Standards Legislation.

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