Use of a compulsory retirement age will give rise to a claim for direct age discrimination, unless it can be objectively justified.
An employer will have to show that the compulsory retirement age is a proportionate means of achieving a legitimate business aim. In assessing whether a compulsory retirement age is justified, an employment tribunal will consider why it is necessary and appropriate, and whether there is any alternative to it. For example, using fitness or competency tests. They will also consider whether the compulsory retirement age actually achieves the legitimate business aim, and weigh up the effect of the legitimate aims with their discriminatory impact. In Ewart v University of Oxford, an employment tribunal considered whether the University could objectively justify its compulsory retirement age.
Professor Ewart was forced to retire at the age of 67 under the University’s compulsory retirement policy. The University said that it had legitimate business aims for the policy, which included: intergenerational fairness and facilitation of career progression for junior staff, facilitation of succession planning, and the promotion of equality and diversity (this was on the basis that staff who had been employed more recently were more diverse than existing, older employees). Professor Ewart brought claims for unfair dismissal and age discrimination.
The employment tribunal accepted that the University’s aims were legitimate. However, it held that the policy was not a proportionate means of achieving those aims. The retirement policy only created 2-4% per cent more vacancies, which, when compared with the discriminatory effect of the policy, was trivial. In relation to the facilitation of career progression, senior posts were in practice often filled externally, and not by junior members of staff. Furthermore, the University did not have any plan in place for the career progression of more junior members of staff. In relation to the aim of equality and diversity, the evidence showed that the retirement policy did little to contribute to the University’s attempts to diversify.
It’s important to remember that employment tribunal decisions are not binding on other courts or tribunals. In another case, an employment tribunal has found that the University’s retirement policy was justified. It is anticipated that the University will appeal this decision. Irrespective of what happens, this case demonstrates that it isn’t sufficient for an employer to have legitimate business aims; they must show that those aims have sufficient effect to justify the discriminatory impact. Employers that use compulsory retirement ages should consider whether it is really necessary in their business, and whether alternative methods can be utilised to assess the fitness of employees to continue in their work.
For more advice regarding retirement or any other employment law issues, contact Kimberley Clayton on 01473 298168 or email [email protected].