Brabners Chaffe Street Solicitors - Employment Services

Employment News Stories

The ending of compulsory retirement: a sea of uncertainty for all employers
5/01/2011

The old dignified retirement at a set age with a gold carriage clock and a gathering is nearly a thing of the past, and the employers will be left with a sea of uncertainty as to how to manage increasingly aged workforces, says Andy Cross, Partner and Head of Employment law at Brabners Chaffe Street.

Assuming that the Government's current proposals are brought into effect (and the only question is whether there may be a delay in the timetable not if it will happen) from 1 October 2011 employers will no longer be able to force staff to retire at 65 and effectively only have until the end of March 2011 to give notice of intended retirement to an employee to fit within the current statutory procedure.

Forced retirement will in the future be contrary to age discrimination laws unless the employer can “objectively justify” retirement at a set age and will also likely be an unfair dismissal. This change represents a serious challenge for all employers.

Most employers will not have given any proper consideration to whether they want to retain a set retirement age on the basis that it is “objectively justifiable”. This legal speak means that the employer would have to show that there was a “legitimate aim” behind the chosen age (for example, creating headroom to allow more junior employees promotion opportunities) and that that set retirement age is a “proportionate means” of achieving the legitimate aim (for example, it might be said that there are other ways of achieving the aim which are not discriminatory or less discriminatory in their impact e.g. having a rigorous performance appraisal system).

But justification is risky - in most cases employers will simply not want the uncertainty of knowing whether a court or tribunal will agree the age is justified and a convincing well researched decision of the employer would in practice have to be presented.

So in the absence of a set age employers will be faced with the uncertainty of knowing when individuals may voluntarily wish to leave (there are even difficulties with the employer raising the question with the employee lest it should be suggested that this indicates an ageist attitude). Furthermore more employees are likely to want to stay in work longer for financial and pension related reasons. Those who stay on will have to face more aggressive performance appraisal from their employers who will need to ensure that those who stay on at an increasingly elderly age are still up to the job. Planning becomes increasingly difficult for the employer.

Why couldn't this have been avoided by simply increasing the default retirement age to perhaps 70 or even older rather than throwing all employers into this sea of uncertainty?


For further information contact Andrew Cross at Brabners Chaffe Street on 0151 600 3062

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