The issue of age discrimination and employee insurance is something employment tribunals may well need to focus on as the number of older workers continues to rise, along with the emergence of what many commentators are dubbing a '4-G workforce'.
The consequences of getting that insurance treatment wrong was made clear in an employment tribunal judgment involving Purple Parking.
Purple Parking case
Purple Parking, Britain's biggest airport car parking company, dismissed some of its drivers (who provided the bus shuttle and car chauffeuring services), for being too old and not falling within the terms of its insurance provision. Purple Parking's insurance policy for its drivers did not cover drivers over the age of 67, a clause which was introduced as a change to the original policy.
It emerged at the tribunal that Purple Parking had requested an upper age limit on the policy for its drivers, a request which Allianz, the insurers, described as 'unusual'. The term and policy was also not applied across the board - Purple Parking asked Allianz to exclude directors and their wives from the policy - a move which presumably did not improve the strength of their defence.
Upon production of this information, Purple Parking admitted liability for age discrimination and discontinued its defence of the claim.
While the liability of Purple Parking was, in the end, quite clear cut, not all such cases follow suit. In the case of Foreman v Oasis Taxis Mansfield Limited, Mr Foreman & Mr Haslam had been employed as drivers for BN Gibson Ltd. In early 2012, the contract run by BN Gibson came up for tender and it was won by Oasis Taxis Mansfield Limited.
Mr Foreman spoke to his new future employer about whether his age would be a problem (then 77) and it was confirmed that the insurance policy used by Oasis only covered employees up to the age of 69, and so Oasis would not be able to provide work for Mr Foreman.
The tribunal found that this was indirect age discrimination, as the requirement for obtaining insurance put certain drivers at a particular disadvantage - the insurance company would not provide cover, and so the employer in question would not recruit any individuals over the age of 69.
The insurance policy operated by Oasis Taxis had not been amended or specifically designed to exclude drivers at the company's request; it was simply the way the policy was. However, the tribunal stated that "the Respondent had made no efforts to seek insurance for Mr Haslam or Mr Foreman other than to make a single phone call to its insurance broker...".
The tribunal concluded that if the Respondent had made proper enquiries it would have been able to obtain insurance cover for Mr Foreman and Mr Haslam.
What do employers have to do?
So what are employers' obligations when it comes to insurance provision for their employees?
Any policy which treats an employee differently because of their age is potential age discrimination, unless it can be objectively justified.
Interestingly, a statutory exemption was introduced into the Equality Act to cover insured benefits for those above the higher of State Pension Age and 65. Although this won't always provide employers with the comfort they are after when they restrict benefits on the basis of age, it may be of assistance where the cut-off point is at these ages. The exemption is unlikely to help employers who self-insure these benefits.
In the case of Purple Parking, it was clear that the employers had not been forced to accept an insurance policy that was outside their control. The employer had specifically influenced the age discriminatory nature of the insurer's terms.
In the case of Oasis Taxis, the employer had not sought to shop around to see if there was an insurer that would cater for the needs of its employees at no extra cost.
Further guidance on what the insurance industry should be providing may come with the Equality and Human Rights Commission's (EHRC) consultation on age discrimination in services, public functions and associations which closed on 2 May 2014.
For the time being, the message to employers is that they should 'test' and challenge their insurer's policies (also including for example income protection and life assurance), and accept with caution any blanket exclusions which take effect when employees reach a certain age.
This article was originally published on Thomson Reuters Accelus.