Can employers enforce compulsory retirement ages?

In Ms J Stunell v Leo Bancroft Salon Ltd, a teenage apprentice brought a claim against her employer for age discrimination when a colleague told her to ‘grow-up’. While the claim proved unsuccessful and shows that comments like this can simply be a sign that performance just isn’t up to scratch, the case is a stark warning to employers of the increased risk of flippant remarks that can be held to be discriminatory. If the comment had included the words ‘people of your age’ it may well have been a different outcome.

A third of all workers in England are over 50, and this number is predicted to increase by one million by 2025. Retaining the valuable skills of this age demographic is often balanced with the need for younger employees to progress their careers but still with the benefit of the knowledge of the more experienced workers.

This can lead to tensions like this teenage apprentice, but employers are increasingly considering more sophisticated succession planning options, including a compulsory retirement age, capped-term appointments, job rotations, flexible working, as well as other financial assistance to realise a more balanced workforce.  

When addressing concerns raised by an intergenerational workplace, employers have to be particularly aware of measures that are often designed to support particular age groups at work. These can be a form of discrimination, which occurs where an organisation has a policy or way of working that applies to everyone, but could put people of a particular age group at a disadvantage.

A compulsory retirement age is the most obvious example. There needs to be an ‘objective justification’ for the policy which means a legitimate aim for the policy or measure; a clear connection between this legitimate aim and the policy; and evidence that this policy or measure is a proportionate means of achieving that aim.

The courts have clarified that attracting and retaining talent, promoting intergenerational fairness, and avoiding an adverse impact on pensions and benefits are all capable of amounting to a legitimate aim. With these potential legitimate aims in mind, a compulsory retirement age is one method of ensuring that senior positions open up for such generational change.

However, even where an employer can establish a legitimate aim, there is no set retirement age that can be considered completely non-discriminatory. Employers should carefully consider whether there is a less discriminatory way to bring about this legitimate aim. For example, if a set age is being considered in order to address performance issues, then the employer may consider if competency tests are a less discriminatory option to remove poorly performing workers of all ages. If staff turnover is low, capped or fixed-term appointments may be a more proportionate response than a compulsory retirement age.

In one recent case, an Oxford professor made a successful unfair dismissal and age discrimination claim against the university when he was obliged to retire at 69. The tribunal found that the fixed age created only a ‘trivial’ number of new opportunities for younger academics.

The conclusion is to ensure all those responsible for the management of an organisation are made aware, through training and regular audits of their processes, procedures and documentation. Age discrimination claims can succeed even where there is no direct intent to cause a disadvantage to a particular age group.

It is important to take note of the language that is used to all staff as well as the policies that are implemented, which can have a disproportionate effect on a particular age group. It is a minefield that is growing in its breadth and complexity, so care is needed to avoid its reach.  

Michael Powner is partner and Isabella MacPherson is a trainee in the employment team at the law firm, Charles Russell Speechlys

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