Employment Law – Retirement

The former Default Retirement Age of 65 was abolished in 2011.

This means that, for most jobs, there is no general age at which an employee must retire. You can usually continue working for as long as you wish, subject to the normal rules relating to matters such as performance, capability and dismissal.

Reaching:

• State Pension age
• An Occupational pension age
• A Particular birthday

does not, by itself, require you to leave your employment.

If your employer imposes a compulsory retirement age, this will amount to direct age discrimination unless the employer can objectively justify the age requirement under the Equality Act 2010.

In broad terms, your employer would need to establish:

• A Legitimate aim
• That the compulsory retirement age is a proportionate means of achieving that aim

Legitimate Aim

An employer cannot normally justify compulsory retirement simply because it prefers younger employees or wishes to reduce costs.

A legitimate aim in this context must be capable of satisfying the particular legal requirements applying to direct age discrimination.

Depending on the circumstances, recognised aims can include matters connected with:

• Inter-generational fairness
• Workforce planning
• Providing career progression opportunities
• Preserving dignity in appropriate circumstances

For example, workforce planning may potentially be relevant where an employer needs a reasonably predictable flow of vacancies to provide progression opportunities to other generations of workers.

However, identifying a legitimate aim is only part of the test.

Proportionate Means of Achieving a Legitimate Aim

The employer must also demonstrate that imposing the particular compulsory retirement age is an appropriate and reasonably necessary way of achieving its legitimate aim.

This is often the more difficult part of the justification test.

Relevant questions can include:

• Why a compulsory retirement age is necessary
• Why the particular age has been selected
• Whether the aim could be achieved in a less discriminatory way
• What impact the rule has on affected employees
• Whether the benefits of the policy justify its discriminatory effect

For example, an employer should consider whether concerns about performance could instead be dealt with through the normal performance-management process rather than requiring employees to leave simply because they have reached a particular age.

A compulsory retirement age that goes further than reasonably necessary may therefore amount to unlawful Age Discrimination.

Can My Employer Force Me to Retire?

In most jobs, not simply because you have reached a particular age.

There are limited exceptions where:

• A Retirement age is set by law
• A Particular occupational retirement age can be objectively justified

Current Acas guidance gives certain police and fire service roles as examples where set retirement ages can still apply.

Where an employer operates its own compulsory retirement age, whether that policy is lawful will depend on the employer being able to objectively justify both the aim being pursued and the particular age selected.