This case deals with performance management and retirement. This is the sort of claim that employers may face when they no longer have the protection of being able to retire employees under the default retirement age exemption, which is being phased out from 6 April 2011. 

Facts

Mr Newey was born in 1955. He had worked at Sainsbury’s for approximately 30 years and was a manager of the Middlesborough store. Mr Newey’s line manager was Ms Rees.

In 2004, Ms Rees carried out Mr Newey’s performance review. At this point in time, there were no issues with his performance. However, in early 2005 Mr Newey was moved to another store in Cramlington because of problems with his staff. Mr Newey performed well at this store and received maximum bonuses in November 2005 and April 2006 for his performance.

In November 2006, Ms Rees carried out another performance review and gave two negative marks for Mr Newey’s “leadership behaviour”.  The reason for this was the Cramlington store’s mystery shopper scores.

Mr Newey disagreed with the negative marks and at that point the relationship between him and Ms Rees began to sour. Ms Rees’s concerns over Mr Newey’s store led to:

• a further visit to the store by a mystery shopper expert in March 2007, who confirmed that there was a problem;
• a refresher course for Mr Newey in May 2007, with a 12 week deadline to turn things around;
• feedback in Mr Newey’s May 2007 performance review that he was improving, but that he was still underachieving;
• the award of a smaller bonus in June 2007 to Mr Newey than he had previously received; and
• a mystery shopper report in July 2007 that Mr Newey’s store had not improved and a subsequent disciplinary hearing for the "preventable errors" and “own goals” by him (resulting in a verbal warning).

Mr Newey submitted a grievance in August 2007 claiming that the way he was being managed was unfair. Mr Newey stated his belief that other colleagues felt he was being singled out and treated unfairly.

The outcome of this grievance was that the HR manager hearing the appeal recommended weekly one-to-one meetings be held between Ms Rees and Mr Newey. Only one of these meetings was held because Ms Rees was quickly reassigned to Scotland as maternity cover in a different area of the business. In the meantime, Ms Rees’s replacement, Mr Barlow, also found Mr Newey to be underperforming.

Mr Newey, who was eligible for early retirement because he had reached the age of 50, alleged:

• that, after her return from Scotland, Ms Rees said to him in a further performance review meeting in October 2008, "Here we go again. When are you going to retire?"; and
• that Mr Chason, who was hearing Mr Newey’s grievance appeal against another verbal warning for poor performance in March 2009, said "You are 54 years old and if I was you I would be retiring". 

Mr Newey resigned in June 2009 after the rejection of his grievance, stating that the way in which Ms Rees had supervised him amounted to bullying and that retirement had been "used as a threatening tool". He subsequently brought claims in the Employment Tribunal for constructive unfair dismissal and direct age discrimination. 

Decision

The Tribunal rejected Mr Newey’s constructive unfair dismissal claim, but upheld his age discrimination claim.

In relation to Mr Newey’s constructive unfair dismissal claim, the Tribunal found that the cumulative effect of the treatment that he received was not likely to destroy or damage the relationship of trust and confidence between the parties. The Tribunal stated that whilst there was a personality clash, it would not be fair to categorise the conduct as a fundamental breach of contract.

In relation to Mr Newey’s age discrimination claim, the Tribunal found that the comments in October 2008 and March 2009 from Ms Rees and Mr Chason respectively were enough to draw inferences of discrimination and shift the burden of proof to Sainsbury’s. The suggestions that Mr Newey retire were prima facie age discrimination. The Tribunal said that there was no doubt that the purpose of the suggestions was to act as an encouragement to Mr Newey to retire as opposed to persisting with the performance management procedure.

The Tribunal also found that there was no evidence to support Sainsbury’s justification argument that the suggestions were to assist with staff planning, and even if there were, putting pressure on an employee to retire would not be a proportionate means of achieving this aim.

The judgment is available here.

Newey v Sainsbury's Supermarkets Ltd ET/2514387/09