Two things have muddied the waters with regard to age discrimination and retirement age.
1. In 2011 the government abolished the default retirement age. Previously set at age 65, this was the age at which employers could expect their employees to retire.
2. The Equality Act 2010 prohibits discrimination on the grounds of age making the imposition of a compulsory retirement age by employers potentially unlawful.
With increasing numbers of employees choosing to stay on past the age of 65, perhaps to supplement insufficient retirement savings, retirement age is fast becoming a hot topic.
When Can an Employer Set a Retirement Age?
The Equality Act 2010 prohibits discrimination on the basis of age but it does allow a company to set a retirement age if it can objectively justify it. In other words, employers can ask you to retire if they can justify their reason for doing so.
An employer may also set a retirement age if it has previously been agreed to by all parties (perhaps within an employee’s contract).
What is Objective Justification?
Objective justification means that the company must be seen to be pursuing a legitimate aim and setting a retirement age must be a proportionate means of achieving that aim. The test for objective justification is by no means an easy one to pass.
Legitimate Aims
The courts have allowed the following as possible legitimate aims that a company can rely on
- Intergenerational fairness and opportunities for younger workers(Seldon V Clarke)
- Dignity or avoiding performance management (Fuchs and anor v Land Hessen)
- Ensuring quality of service (Georgiev v Tehnchiski Universitet)
- Public Health Protection (Peterson v Berfungsausschuss)
- Workforce planning for the departure and recruitment of staff (Seldon v Clarke)
- Avoiding disputes about employees fitness for work over a certain age
Having established that a legitimate aim exists a company must then justify why imposing a retirement age is a proportionate means of achieving that aim.
Proportionate means of Achieving a Legitimate Aim
Examples of matters which the courts have considered to be proportionate means are keeping the retirement age the same as the state pension age; avoiding excessive numbers of workers in certain specialisms and all parties previously agreeing to the retirement age (it is contained within the contract).
Evidence Required
A company must be able to offer evidence that the policy which they adopt to achieve their legitimate aim is capable of success.
For example, if a company forces a person to retire at sixty-five, citing the need to give younger members of the workforce opportunities to progress, they must demonstrate that younger members of the workforce are able to make progress as a result.
In the event that an employer is unable to justify its imposition of a retirement age then the courts are likely to consider it age discrimination.
If you are being subjected to age discrimination or are under pressure to retire and would prefer to keep working then please call our free legal helpline on [phonenumber] for further advice.