Compulsory Retirement and Age Discrimination

Although there is no longer a default retirement age implied by law, some businesses still have a fixed retirement age, based on the particular needs of their organisation. For many other employers, employees dictate their retirement date; making the decision on their own terms, at the natural end point of their career.
 
This blog considers the key considerations for an employer, wanting to impose a compulsory retirement age upon employees.
 
Age Discrimination Risk
At first glance, a compulsory retirement age – that is requiring an employee to retire at a set age – is direct age discrimination under the Equality Act 2010. Under certain circumstances, however, a fixed retirement age can be objectively justified. This means that an employer may be able to objectively justify the fixed retirement age used for compulsory retirement, by showing that it is a proportionate means of achieving a legitimate aim.
 
Legitimate Aims
The legitimate aim will depend on the nature of the employer’s business and the jobs involved, but they can generally be summarised as those promoting intergenerational fairness and dignity and could include:
 
•         promoting access to employment for younger people
 
·         the efficient planning of the departure and recruitment of staff
 
•         sharing out employment opportunities fairly between the generations
 
•         ensuring the mix of generations of staff so as to promote the exchange of experience and new ideas
 
•         rewarding experience
 
•         cushioning the blow for long-serving employees who may find it hard to find new employment if dismissed
 
•         facilitating the participation of older workers in the workforce
 
•         maintaining health and safety standards
 
Role Specific
In demonstrating that the policy is a proportionate means of achieving a legitimate aim, it will be very difficult to justify having a fixed retirement age that applies to an entire workforce, where that workforce carries out a variety of different jobs or roles. Employers will therefore be better able to justify a fixed retirement age where it is for a particular job or role, for example where there is strong evidence of declining capability with age and health and safety concerns. In such cases, however, alternatives that would achieve the same aim without relying on an age discriminatory measure, must also be assessed. Any decision to enforce a compulsory retirement age would therefore need to take account of the results of such assessments, rather than be based solely on age. An example of such an alternative could include regular medical assessments of continuing capability to undertake the role in question.
 
Indeed, the Employment Appeal Tribunal recently set out some considerations that could be relied upon when justifying a set retirement age of 67, regarding the role of professor at the University of Oxford. These were:
 
1. inter-generational fairness;
2. succession planning; and
3. promoting equality and diversity (allowing for a younger, more ethnically diverse workforce to fill vacancies).
 
Interestingly, the University’s policy was viewed as justifiable for a professor of history but not a physics professor. The dismissal of the physics professor, through the University’s compulsory retirement age, was found to amount to age discrimination, as statistical evidence demonstrated that the policy only produced a small number of vacancies and could not therefore be justified as proportionate.
 
Evidence
Moreover, employers are expected to be able to produce evidence to support their contentions. That evidence need not always be concrete but should reflect that the decision was based on more than simple assumptions. Similarly, employers do not have to have considered whether or not a particular provision was justified at the time it was introduced (although a prudent employer will do so); it is therefore possible to establish justification retrospectively.
 
Policy
Needless to say, employers should use a policy document (contained in a Staff Handbook) to explain and expand upon any rationale behind a fixed retirement age. This will allow an employer to demonstrate the various factors that were taken into consideration before a fixed retirement age was implemented.
 
If you would like to advice from the Employment team at MLP Law in respect of any of the issues raised here or more generally, please do not hesitate to get in touch on 0161 926 9969 or employment@mlplaw.co.uk, or follow us on Twitter @HRHeroUK.