- Solicitors For Business
- Solicitors For You
- About Us
- News & Events
Retirement – Forcing an Age-old Problem
Since the abolition of the statutory default retirement age of 65 it has become incumbent upon employers seeking to compel the retirement of employees who reach a prescribed age to justify the rationale for choosing that age. Enforcing retirement at a pre-determined age amounts to direct discrimination on the grounds of age unless the employer can show that the less-favourable treatment suffered by the employee, by being forced to retire on the grounds of their age, is “a proportionate means of achieving a legitimate aim” – in other words, is fair. So how does an employer justify a chosen compulsory retirement age ?
The reasons advanced for the justification of the retirement age should not be general or generic ones, but must be specifically relevant to the employer’s business. They may include such considerations as succession planning by providing a career development program designed to attract and retain bright junior staff who may otherwise leave were such a culture not encouraged. However, the employer would also be advised to have some empirical evidence to support how in practice such an objective has produced the positive benefits it intended in the context of its own business. For example, if the turnover of junior staff is very low due to a lack of opportunities in the sector, what in principle looks like a reasonable justification for a enforced retirement age, may not have any such effect in practice, and without the “proportionate means of achieving a legitimate aim”, enforced retirement at a prescribed age will simply amount to age discrimination.
Another trap is the popular perception than a compulsory retirement age can avoid older employees becoming subject to sensitive performance management issues, perhaps exacerbated to a greater or lesser degree by physical and/or mental “slow-down”. This laudable objective of “preserving the dignity of older workers” can nevertheless be a blunt instrument in practice particularly where competencies are not being assessed by any more objective and credible measures and where the simple attainment of a given age, an often a random one at that, obviously fails to assess the ability of the employee to perform to an acceptable standard.
The key consideration for any employer seeking to impose and then justify a compulsory retirement age policy, by relying upon the statutory defence that the policy represents “a proportionate means of achieving a legitimate aim”, is the context in which the policy can be demonstrated to be a genuinely legitimate aim for that employer and that business, as well as a proportionate means [having properly and reasonably considered others] of achieving that aim. A failure to grasp that essential will almost certainly lead to a claim of direct age discrimination which, given the inherent age discrimination prevalent in the general labour market, could result in a significant liability if the former employee is unable to secure alternative work elsewhere and mitigate the loss of income.