Age discrimination and compulsory retirement age

Since 2011 there is no longer a default retirement age in this country for employees (which most latterly had been 65).

However “retirement” is still a concept used by many employees and employers should take care when dealing with it. In general terms, retirement is another form of resignation and notice periods should be followed, but when may compulsory retirement ages still be a possibility?

Employees that have worked for a company for a long time, e.g. since before 2011 may still have compulsory retirement age clauses in their contracts. Employers may ignore such clauses, amend the contracts to remove them, or potentially may wish to consider keeping them but should only do so with regard to the below.

Age is one of the nine protected characteristics under the Equality Act 2010 making it unlawful for a person to be discriminated against either directly or indirectly because of their age.

Compulsory retirement ages are, prima facie, examples of direct discrimination unless they can be justified (see below), or fall within the scope of an “occupational requirement” as defined in the Equality Act.

Employers must take care that they do not open themselves up to age discrimination claims, for which compensation is uncapped, meaning that any claim brought against them could be costly in both legal fees and compensation owed to a successful Claimant.

However, employers may be able to justify a compulsory retirement age if they can show that it is a “proportionate means of achieving a legitimate aim”.

This involves demonstrating that the compulsory retirement age is intended to meet a legitimate aim, having the retirement age meets that aim and that it is proportionate to use that retirement age as a means of meeting that aim (i.e. there would not be a less discriminatory option that would achieve the same aim).

It is advisable to seek legal assistance before considering introducing or maintaining a compulsory retirement age, however case law has shown that the following examples could potentially be legitimate reasons for a compulsory retirement age:

• promoting access to employment for younger people
• the efficient planning of the departure and recruitment of staff
• ensuring a mix of generations of staff so as to promote the exchange of experience and new ideas
• “cushioning the blow” for long-serving employees who may find it hard to seek new employment if dismissed.

For example, in Seldon v Clarkson Wright & Jakes, a law firm partner who was forced to retire at 65 years old was held not to be unlawfully directly discriminated against on the grounds of age as the Employment Tribunal held that the law firm had legitimate reasons for his retirement such as giving associates an opportunity of partnership within a reasonable timeframe to entice them to stay with the firm, facilitating workforce planning by knowing when vacancies were to be expected and limiting the need to expel underperforming partners.

The examples above are not exhaustive but are highly fact-dependent. Whilst compulsory retirement ages are therefore possible, they should only be used sparingly and where there is no less discriminatory option available that could achieve the same result. In summary, compulsory retirement is a topic that should be treated with caution and legal advice should always be sought before implementing a policy such as this.

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