BUSINESS LEGAL EMPLOYMENT LAW

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Following the abolition of the default retirement age, is it still possible for an employer to set a compulsory retirement age?

The Test – How can I objectively Justify a Fixed Retirement Date? 

If a compulsory retirement age is retained or adopted, the business will need to show the following: that a legitimate aim is being met through the compulsory retirement age; that the particular retirement age stated meets that aim; that the retirement age is a proportionate means of meeting that aim, and that there is no other appropriate alternative/less discriminatory option available. 

Procedure – How do I now Dismiss an Employee who Reaches the Fixed Retirement Age?

The ACAS guidance says that a fair procedure must be followed in retiring people at the compulsory retirement age and that employees should be given “adequate notice” of impending retirement and, where possible, consideration should be given to any request to stay beyond the fixed retirement age. As such, it would be wise consult with employees who are close to the fixed retirement age and ensure consistency of treatment as a fair procedure still needs to be adopted in order for the dismissal to be fair.  

There is no doubt that applying a retirement age is a risky option since the question of whether a retirement age is justified will be a question of fact to be determined by the tribunal. Given this risk employers should seriously consider whether there is a real business need to keep the fixed retirement date and if so, whether they can objectively justify it. If it is not possible to do so, employers should look to amend employees contracts of employment to remove the risk of costly age discrimination and unfair dismissal claims.

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