CAN I STILL LAWFULLY SET A RETIREMENT AGE FOR EMPLOYEES?

August 20, 2013

On 6 April 2011 the Employment Equality (Repeal of Retirement Age Provisions) Regulations (NI) 2011 came into force and abolished the Default Retirement Age (DRA) of 65.

Previously under the DRA employers could give employees approaching the age of 65 notice of their retirement. The setting of a compulsory retirement age now effectively results in an act of direct age discrimination. Employers will now have to objectively justify the dismissal of an employee at 65 or any other set retirement age.

The Supreme Court recently considered the issue of compulsory retirement in the case of Seldon v Clarkson Wright & Jakes (2012). This case concerned a senior partner in a firm of solicitors which set a compulsory retirement age of 65. While Mr Seldon did not wish to retire and there were no concerns about his performance, his partners did not want him to stay.

The question before the Supreme Court was therefore whether or not the direct age discrimination caused by a mandatory retirement age could be justified.

In reference to European case law the court identified a number of legitimate ‘social policy’ aims which can provide justification for a compulsory retirement age. These include; providing employment opportunities for younger people, workforce planning and avoiding the need to dismiss employees due to capability or fitness to work.

In Seldon the court agreed that Clarkson Wright & Jakes had valid reasons for imposing a compulsory retirement age. Specifically it found that it ensured associates in the firm had the opportunity of partnership and therefore would not leave the firm and also that it facilitated workforce planning by providing a realistic expectation of when vacancies would arise in the future.

Therefore, while this case shows that a compulsory retirement age can be justified on the basis of legitimate social policy aims, employers will still need to show that the set retirement age is appropriate and necessary for the business within the scope of those aims.

Please note: The content of this article is for information purposes only and further advice should be sought from a professional advisor before any action is taken.