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Briefing on Retirement Ages
Released on 27/04/2012

Author Andrew G. Large

Introduction

In its judgement on 25^th April 2012, the UK Supreme Court decided that employers can force the retirement of older workers if it is in the “public interest”.

Key Points

The Supreme Court has remitted some of the issues that arose in discussion back to the Employment Tribunal for decision, so the final legal position on retirement ages remains to be decided. However, the following pointers have emerged from the Supreme Court Judgement:

If the reason for retiring someone meets “public policy” objectives it was permissible to force someone to leave the business
Suitable objectives include the creation of more entry level jobs.
They also include ensuring that younger workers can climb the career ladder.
Any such objective would be context specific. So in the current climate of youth unemployment, creating jobs for younger people might be a legitimate objective, however in a time of full employment, it might not be.
Employers would also need to have evidence that they did indeed pursue the objectives used to justify forced retirement
This case does not however provide any justification for the use of any particular retirement age, such as 65 years old. This point has been sent back to the Employment Tribunal for a decision.
The case also does not provide grounds for the dismissal of older workers on the grounds of cost alone, although a combination of cost and promoting younger staff might be deemed to be acceptable.

Retirement Reasons

The Supreme Court, in the narrative of its judgement, also set out a number of potentially legitimate reasons for direct age discrimination. These were

· Promoting access to employment for younger people

· The efficient planning of the departure and recruitment of staff

· Sharing out employment opportunities fairly between the generations

· Ensuring a mix of generations of staff so as to promote the exchange of experience and new ideas

· Rewarding experience

· Cushioning the blow for long serving employees who may find it hard to find new employment if dismissed

· Facilitating the participation of older workers in the workforce

· Avoiding the need to dismiss employees on the ground that they are no longer capable of doing the job which may be humiliating for the employee concerned

· Avoiding disputes about the employee’s fitness for work over a certain age.

Conclusion

Until the Employment Tribunal process has concluded, the area of retirement ages will remain uncertain. In principle this Supreme Court ruling opens the door for employers to force workers to retire, provided that the reason for such direct age discrimination is in line with the public policy reasons set out above.

Employers should take care that their retirement policies mention the specific public policy issues and also that they have evidence that they are implementing the public policy objectives within their businesses.

Nothing in this case justifies a particular retirement age – the Employment Tribunal has yet to decide on that aspect of retirement.

Reference

http://www.supremecourt.gov.uk/docs/UKSC_2010_0201_Judgment.pdf