Keeping a compulsory retirement age

Jan 11, 2016 | Termination

Although the default retirement age was repealed in 2011, and it became unfair dismissal and age discrimination to force an employee to retire because of their age, as with most types of discrimination, if there is an objective justification for retaining a compulsory retirement age, this can be acceptable.

For a policy of compulsory retirement at a certain age to be acceptable, there needs to be a legitimate aim being met by the policy, and the employer needs to be able to demonstrate that having a retirement age is a proportionate means of achieving that aim. This is only likely to be possible in exceptional circumstances.

What is a legitimate aim?

The Employment Statutory Code of Practice gives the following examples of aims that might be considered legitimate:

  • the facilitation of workforce planning, by providing a realistic long-term expectation as to when vacancies will arise; and
  • the provision of sufficient opportunities for promotion, thereby ensuring staff retention at more junior levels.

Something like health and safety might also be a legitimate aim. But the key with legitimate aims is that employers can’t just assert that one of these applies. It would need to be able to demonstrate that there is a real concern, with evidence of that concern. So if you don’t have problems with recruiting younger people, have a healthy turnover and don’t need to know ages in advance when you’ll have vacancies, you are unlikely to have a legitimate aim to meet with a retirement age.

What is meant by proportionate means of achieving the aim?

It’s not enough to demonstrate that there is a legitimate business aim at the root of having a compulsory retirement age. An employer must be able to demonstrate that a compulsory retirement age is necessary to achieve that aim, and that an alternative, less discriminatory means of doing so is not available or possible.

In reality, that means an employer would need to be able to demonstrate that it had considered alternative means of achieving the business aim, and that the business aim was so important that discriminating was necessary to achieve it.

What all this means is that for most small organisations, it is likely to be extremely difficult to justify having a compulsory retirement age, so recruitment/promotion/performance workforce challenges need to be addressed in other ways.

If want more information about retirement ages, do get in touch