Business Law & Compliance

Published

Learn from PGA European Tour – Don’t dress up poor performance dismissal of senior employees as retirement

5 Mins

Scott Kelly, a former PGA European Tour marketing director, was dismissed at the age of 60 when the tour’s new CEO wanted a more proactive and analytical approach to marketing. The CEO decided to have an “off the record” discussion with Kelly to see if they could agree terms for his departure. In these discussions the CEO suggested Kelly’s departure be presented as ‘retirement’ in order to preserve his dignity. It ended up sparking a much bigger debate on senior employees though.

Settlement negotiations broke down and the CEO dismissed Kelly. No capability procedure was followed prior to the dismissal. The dismissal letter stated that the PGA European Tour was undergoing a restructuring and Kelly’s experience and skillset were not suited to the new, wider role of commercial director that was to replace that of marketing director.

Kelly brought a claim in the Employment Tribunal, stating that his age was a significant factor in the decision to dismiss him and that this was unlawful age discrimination. After this, the PGA European Tour admitted Kelly had been unfairly dismissed but denied his age was the reason for his dismissal. It claimed that the CEO did not consider Kelly capable of fulfilling the new role of commercial director. It said the reference to ‘retirement’ was not any indication of the reason why Kelly’s employment was terminated, but was for presentation only.

The Tribunal accepted the PGA European Tour’s explanation and held that it had not discriminated against Kelly because of his age. It noted that there were persons employed by the PGA European Tour in Kelly’s age group who remained in the tour’s employment because they were considered to perform well in their roles. By contrast, there was evidence that Kelly’s performance was an issue and he was therefore not considered suitable for the role of commercial director. The fact that the dismissal was unfair did not necessarily support the view that it was also discriminatory.

This case shows the difficulties employers can find themselves in if they do not take a considered approach to dealing with performance issues or organisational changes affecting senior employees. Although the Tribunal decided the real reason for dismissal was capability rather than age, the dismissal was unfair because a proper capability procedure had not been followed.

Whether dismissed staff can be counted as senior employees or not, they can be lawfully dismissed for genuine conduct or capability issues, or for redundancy. Provided the reason given is genuine and a proper procedure is followed, dismissals on these grounds should be fair and non-discriminatory. It is perhaps surprising that the PGA European Tour did not approach this as a reorganisation which created a redundancy situation affecting Kelly’s position, as the facts would seem to support this approach. The commercial director position was a new role with a broader remit and which required a different skillset and approach to that of Kelly. This basis for a fair dismissal may have provided a better foundation on which to approach settlement discussions.

Employers should carefully consider what the real issue is with the employee, be open about it and stick with that reason. Do not be tempted to ‘dress up’ what is in reality a retirement dismissal as a dismissal for poor performance, misconduct or redundancy. Tribunals have shown to be quite astute at spotting where the dismissal process is a sham. By contrast, tribunals appear relatively sympathetic to employers’ situations where they have made a genuine attempt to discuss the possibility of retirement and this has provoked the employee to resign claiming constructive dismissal and age discrimination.

These cases highlight the risks to employers where dismissals of older employees are not properly thought through. Given the UK’s ageing population and the increasing number of older people remaining in work these kinds of issues are likely to arise more frequently for employers.

Chris Weaver is employment law associate at Payne Hicks Beach

Image: Shutterstock

Share this story

Corporate governance can protect deal value and enhance shareholder protection
Currency fluctuations and the weak pound hitting a little close to home
Send this to a friend