Senior Conservatives have outlined policies designed to build an “opportunity society”. One suggestion in the 2020 Vision: Agenda for Transformation report is for the abolition of the retirement age, “if you want to work and can work, you should be allowed to continue to do so”.
How does this idea sit with current law?
Since the abolition of the default retirement age in 2011, forcing employees to retire can, under the Equality Act 2010, be direct age discrimination. However, unlike other forms of direct discrimination, direct age discrimination can be objectively justified. Fixed retirement ages can still be legal, if the employer can show:
- having the particular retirement age meets a legitimate aim; and
- that it is proportionate to use that retirement age to meet that aim.
The Courts have found that it can be legitimate to retire older employees in order to ensure a high quality of service and to protect against incompetence as well as to promote the recruitment and retention of a younger and/or more age-balanced workforce. For an aim to be legitimate, the employer must be able to show it is relevant to their individual circumstances.
The Conservative plans, if accepted, could see the removal of fixed retirement ages entirely, leaving employers to deal with performance or health issues as they arise, as with younger employees. Each individual and their circumstances would have to be considered on a case-by-case basis. Some employers already do this, but others argue that removing a fixed age for retirement may lead to uncertainty both for the employer and the employee and wouldn’t work for their businesses.
Regardless of the existence, or otherwise, of a fixed age for retirement, employers must act fairly and a failure to do so can lead to findings of unfair dismissal and age discrimination against them.
Do you have a fixed retirement age in your business? How might these proposals affect you?
On January 21, 2013