Firms win right to retire workers at 65

[TrueBlueTerrier]

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Older workers can be forced to retire at 65 if their employers show it is in the “public interest”, despite the Government scrapping the default retirement age, the Supreme Court ruled yesterday.

Companies have been told that they can still dismiss employees on the grounds of age as long as they conform to guidelines laid down by the court.

They have been told that each case must have a wider justification than the commercial interest of the business.

Legal experts said the decision gave the go-ahead to firms to get rid of employees at 65, just months after the practice supposedly became unlawful.

Yesterday’s ruling concerned the case of Leslie Seldon, a partner in a Kent law firm, who claimed he had been treated unfairly when compulsorily retired at 65.

He lost his appeal but had his case sent back to the employment tribunal that first heard it for reconsideration on the grounds of the new guidelines.

The case involved an interpretation of a rule that allows employers to justify age discrimination if they can prove it is a “proportionate means of achieving a legitimate aim”.

Mr Seldon’s case was dismissed, but the court set out new guidelines meaning that companies must consider a range of alternatives to retiring an employee and be able to show a specific public interest justification in each case where retirement is imposed.

These justifications could include making it easier to recruit younger workers, being able to promote middle management, and being able to plan for the future and train others, as well as being able to end the careers of older workers with “dignity”. Companies will have to show these aims are legitimate and genuinely being pursued.

They will also have to show that they have considered other options, such as flexible working hours or allowing employees to stay on for a short period.

The judgment signalled that, at a time of high youth unemployment, it is in the public interest for older staff to leave companies to open up job opportunities for younger people.

Companies would have to provide evidence that they were recruiting younger staff and allowing them to move up the employment ladder. Lady Hale, giving the lead judgment in the case, said: “Improving the recruitment of young people, in order to achieve a balanced and diverse workforce, is, in principle, a legitimate aim.

“But if there is in fact no problem in recruiting the young and the problem is in retaining the older and more experienced workers then it may not be a legitimate aim for the business concerned.”

The ruling may also increase the likelihood of older workers at some companies having to undergo performance assessments if they wish to keep their jobs. Lady Hale said that while in some cases it may be “legitimate” for employers to argue that workers should be spared from undergoing such tests because they are undignified, if “the business already has sophisticated performance management measures in place” they should be used for older workers.

While the court recognised the importance of employing more young people, it also made clear that the country could no longer afford to make assumptions about the competence or capability of older people to work. Lady Hale said that “in times of increasing longevity” there were benefits to both individuals and wider society “if people continue to work for as long as they can”. She said: “Put simply, the younger generations need the older ones to continue to be self-supporting for as long as possible.”

[justdeno]

With this job now who would or is capable of working after 65. I can't wait trying to retire at 55, if not earlier please let me win some lotto money

[R@YAL F@IL]

If Royal Fail retire you at 65 and you can only draw pension when you are 66 then that is not right Time for Fishtank or TrueBlueTerrier to explain this I feel

[justdeno]

I have just worked it out RM pay pension at 66, so you have to wait one year, you starve and die, saves loads of money

[fishtank]

If Royal Fail retire you at 65 and you can only draw pension when you are 66 then that is not right Time for Fishtank or TrueBlueTerrier to explain this I feel

This case was judged on the position of someone retiring at State Pension age now which is 65.
It is unlikely that firms would be allowed to have a mandatory retirement age below state retirement age so when the retirement age increases to 66 around 2016 then the age at which you can retire people under this justification will also rise.
This is simply case law,it does set precedent however it could be overruled or superseded by another case somewhere down the line but i would imagine RM's lawyers are busy weighing up there options right now.
They were looking for a get out before this case so i think it will be champagne all round.

[R@YAL F@IL]

Thank You fishtank, very well explained.

[TrueBlueTerrier]

Can a UK employer have a compulsory retirement age?

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Yes, says the UK Supreme Court (“UKSC”).

In a ruling issued on 25 April 2012, in the case of Seldon -v- Clarkson Wright & Jakes [2012] UKSC16 (“Mr. Seldon”) the UKSC ruled that a compulsory retirement age may be permissible even though it constitutes direct age discrimination.

Facts

Mr. Seldon was a partner of Clarkson Wight & Jakes (“Clarkson”) which had a partnership retirement age of 65. He asked to stay on past 65 but Clarkson refused. As a partner, Mr. Seldon was not subject to the then statutory default retirement age for employees of 65 and he claimed that the decision by Clarkson to make him retire was direct discrimination for which Clarkson had no “objective justification”.

In hearings in lower courts, Clarkson had successfully argued that it had objectively justifiable reasons for a compulsory partnership retirement age being succession planning; making room for and encouraging younger lawyers to aspire to partnership; and the desire to have a congenial and supportive culture by limiting the need to expel partners using performance management.

The case was referred to the UKSC for a ruling on what reasons were capable of justifying direct age discrimination and therefore permitting an organisation to have a compulsory retirement age or ages’ as the issue was of general importance following the abolition of the “default retirement age” of 65 for employees.

Decision

The UKSC noted that the relevant European Union directive (prohibiting discrimination generally) contemplated that “differences in connection with age may be justified under certain circumstances…it is therefore essential to distinguish between differences in treatment which are justified by…employment policy, labour market and vocational training objectives and discrimination which must be prohibited”. The UKSC also reviewed rulings issued by the European Court of Justice (“ECJ”) on age discrimination claims and noted that the ECJ has held that aims such as “sharing employment between the generations” and “not requiring employers to dismiss [older workers] on grounds of incapacity” which may be “humiliating” were “in principle capable of objectively and reasonably justifying a treatment on grounds of age”.

The UKSC confirmed that staff retention, workforce planning, and limiting the need to expel, by way of performance management are all legitimate aims capable of justifying direct age discrimination and hence a compulsory retirement age as they fall within the categories of legitimate social policy objectives identified by the ECJ being “inter generational fairness” and “dignity” permitting direct age discrimination.

Mr. Seldon’s case has returned to a lower tier tribunal for a decision on whether, in his case, the specific retirement age (65) could be justified.

What does this mean for employers?

The ruling does not mean that every employer can immediately impose or reimpose a compulsory retirement age and indeed many employers will not wish to do so.

Where an employer has retained compulsory retirement age, or wishes to introduce one, it will have to show that retention of a retirement age and the selection of a particular retirement age continues to be appropriate and necessary in the particular circumstances of the business having regard to the social policy objectives noted by the UKSC.