In recent years the general position has been that employers would generally not set a compulsory retirement age for employees as doing so could be regarded as discriminatory. However, a compulsory retirement age can be imposed providing an employer can justify it.
A recent Employment Appeal Tribunal decision has now been released (Seldon v Clarkson, Wright & Jakes) which confirms that a compulsory retirement age of 65 was justified where the justification given was to achieve inter-generational fairness. The Judge in that case decided that setting a mandatory retirement age of 65 was a proportionate means of achieving the legitimate aims of staff retention, planning and to a certain extent collegiality.
The case also highlighted that the retirement age could have easily been set at age 66; the key point being that there is the need to balance the discriminatory effect of choosing a particular retirement age against the achievement of legitimate aims.
It is perhaps too early to tell what impact this is going to have on the way employers approach the question of retirement age. Certainly our experience of advising employers is that they often benefit from the experience brought to the workplace by older workers. Our advice to any employer would be to consider, if indeed they did wish to introduce a contractual retirement age for employees, the reasons why they would want to do so and, in particular, think about whether or not these reasons could be said to “legalise” the discriminatory effect of having a compulsory retirement age. As is often the case with Employment Law matters, an employer needs to take account of the commercial realities of any particular situation and, in particular, think about what it is they are trying to achieve.
We would be more than happy to discuss with any employer the pros and cons of setting a compulsory retirement age or not doing so, but our general view at this time is that unless an employer can show good justification for having a compulsory retirement age, it still might be “safer” to allow employees to retire when they so choose.
We provide a full range of Employment Law advice. Please do not hesitate to contact any one of our 3 fully qualified Solicitors who specialise in Employment Law, being Hayley Garnett (Bridlington and Hunmanby), Helen Kidd (Scarborough and Whitby) and Peter Noble (Scarborough).