Last year saw the nail in the coffin for the default retirement age. A triumph for employees no longer on the scrap heap at 65 left employers facing the uncertainty of planning a workforce with no definitive end-point. It was open season for age discrimination claims if staff were forced out at a particular age. The employment relations minister said, “Retirement should be a matter of choice rather than a compulsion – people deserve the freedom to work for as long as they want to and are able to.” The clue is in the last three words. Performance management was to be the determining factor in terminating the employment of staff ‘of a certain age’.
Since 2006 age discrimination has been the weapon of choice for a greying army of workers enjoying better health and facing dwindling pension resources. It is unlawful for an employer to treat a member of staff less favourably because of their age. It is not difficult to see how a compulsory retirement age could fall foul of this. The chink in the age discrimination armour is justification. An employer can justify age discrimination where it is has a legitimate aim and uses proportionate means to achieve it.
Enter the protagonist, Mr Seldon, a spritely partner in a law firm, given his marching orders at the age of 65 in accordance with the compulsory retirement age in the partnership agreement. With youthful determination Mr Seldon skipped off to the Employment Tribunal and wagged the accusatory finger of age discrimination at his younger partners. Last week (some five years later and undoubtedly at vast expense to the law firm) five Supreme Court Judges (average age 71) confirmed that the use of a compulsory retirement age can be justified in certain circumstances.
Were the Supreme Court Judges talking themselves out of a job? Hardly! The parameters for justifying a compulsory retirement age were narrowly drawn and case specific and therefore acceptable. It will be a brave employer, however, that persists in specifying a compulsory retirement age for its staff. The spectre of age discrimination looms large despite this ruling that employees can have a shelf life. Unfortunately for Mr Seldon, it appears that at 65 he may well be legitimately past his sell-by date.
Justifying a compulsory retirement age is an unwieldy double-edged sword. Not only must it be in the public interest to preserve dignity or intergenerational fairness but the chosen age must be appropriate and necessary. Such uncertainty begs the question: Is it safer to raise the shield of careful performance management rather than risk the hazards of justifying a compulsory retirement age?
Victoria Notman is a solicitor at Raworths LLP specialising in employment. To contact Raworths telephone 01423 566666 or visit our offices at Eton House, 89 Station Parade, Harrogate, HG1 1HF. Alternatively, you can email firstname.lastname@example.org