Compulsory Retirement Ages

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The Problem

Is it ever safe to make employees retire at, say, 65 or are you setting yourself up for an age discrimination claim if you try to enforce this?

The Principle

Mr Seldon was a partner with a law firm but the partnership deed said he had to retire at 65. He did not want to but was forced out. He brought a claim of age discrimination against the law firm on the basis that the compulsory retirement age was discriminatory.

The Employment Equality (Age) Regulations 2006 (Age Regulations) provided that an act would not amount to direct (or indirect) age discrimination if it was “a proportionate means of achieving a legitimate aim”. The same wording is contained in the Equality Act 2010, which repealed and replaced the majority of the Age Regulations on 1 October 2010.

To cut a long story short, the Supreme Court accepted that mandatory retirement at a particular age achieved legitimate aims ( e.g. of staff retention, planning and collegiality) but referred the matter to the tribunal to assess whether the firm’s chosen retirement age of 65 (rather than, say 69 or 70) was a proportionate means of achieving those aims. The Tribunal has decided it was.

The Practice

But hang on! This case is fact sensitive. It does not give all employers the option of forcing employees to retire at a mandatory retirement age of 65.  Employers will still need strong justification for a mandatory retirement age and given that demographics and society may now be more accepting about working beyond 65 than it was in 2007 it is worth noting that the tribunal specifically stated that the case might be decided differently on facts arising today.

For more information, help or advice please contact Tim Davies on 0191 211 7927.