The default retirement age was abolished in 2011, meaning that imposing an internal compulsory retirement age will be direct age discrimination unless it is objectively justified as a proportionate means of achieving a legitimate aim. The Supreme Court, when considering this justification test in Seldon v Clarkson Wright and Jakes, stated that individual aims of the employer are not, in themselves, sufficient. There must also be reference to a public interest aim that is consistent with the state’s social policy.
Recently, Reading Employment Tribunal considered the objective justification defence in the context of compulsory retirement in a case brought against Oxford University by an academic forced to retire before his 70th birthday. The university introduced an employer justified retirement age policy in 2011, following the abolition of the default retirement age, to be able to bring younger and more diverse staff in. Originally senior staff were required to retire in the September before their 67th birthday, with the threshold increasing to 68 in 2017.
In 2014, Professor Ewart, a longstanding academic with 38 years’ service, was allowed to work a further two years until he was 69. He expected to be granted a further extension until 2020 to complete certain research projects. However, no extension was granted and he was forced to retire before his 70th birthday.
He brought unfair dismissal and age discrimination claims, both of which were upheld. In particular, he argued that the retirement policy was discriminatory in forcing older workers to retire and produced evidence to show that it resulted in only a 2-4 per cent increase in job opportunities for younger academics. The tribunal observed that this very small increase was minimal compared to the discriminatory effect on older workers, and found that the university had not justified what was otherwise a discriminatory scheme.
One of the key issues appears to be that the university’s stated aims in having a compulsory retirement age were not borne out in practice. Therein perhaps lies a salutary tale: it is not enough to have potentially justifiable aims, those aims must be demonstrated in terms of practical effect. The university has indicated it may appeal so the story may not end here. Additionally, while fairly widely publicised, the decision is not technically binding on other tribunals.
Finally, the objective justification defence is not the only way to defend a claim based on compulsory requirements. Depending on the circumstances, it may be possible to show that an age limit on a particular job falls within the ‘occupational requirement’ defence. There is some overlap with objective justification, although there are subtle differences. Cases in which this defence has been run successfully include, for example, firefighters and airline pilots, where physical fitness and capability have been identified as key requirements.
Dos and don’ts for employers
- Consider carefully the business need for a compulsory retirement age – is there a legitimate aim and is a compulsory retirement age a proportionate means of achieving that aim?
- When setting a compulsory retirement age, consider the wider needs of society; for example, giving younger people the chance of employment or promotion, creating a workforce with a mix of age groups and intergenerational fairness.
- When putting in place a retirement policy, ensure that it clearly sets out both the existence of any compulsory retirement age (which should also be set out in staff contracts of employment) and the rationale for it.
- Keep the compulsory retirement age under review regularly to ensure that it is meeting the stated aims for having it.
- Be consistent – any decision by an employer to allow a particular employee to work beyond the compulsory retirement age, whether on a fixed-term basis or otherwise, may undermine the objective justification supporting such a compulsory retirement age in the first place.
- Make assumptions that a compulsory retirement age is needed because performance and capability might decline with age.
- Apply any compulsory retirement policy inconsistently or on an arbitrary basis.
- Underestimate the emotional impact of requiring someone to retire.
- Put in place a compulsory retirement age and then fail to review it regularly to ensure it is still achieving the stated aims – keep records of any statistics or other evidence collated during any review process.
- Fail to deal with genuine performance concerns in the hope that an employee can be managed out under a compulsory retirement policy – this could result in a younger employee who is similarly underperforming claiming age discrimination.
Caroline Yarrow is a partner at BDB Pitmans