Can compulsory retirement age ever be justified or is it age discrimination?

Avoiding discriminatory acts should be top of the list of priorities for every employer.  There are nine protected characteristics specified under the Equality Act 2010, with one of those being age.  There have been some conflicting tribunal cases recently answering the question about whether a compulsory retirement age can effectively be discriminatory against employees; our Employment Law team today discusses whether this is the case and how employers can implement a retirement age while staying on the right side of Employment Law and reduce the risk of tribunal claims against them. 

What does the Equality Act 2010 say about age discrimination?

The Equality Act 2010 prohibits direct discrimination (treating someone less favourably because they possess a particular protected characteristic). However, the Act also provides an exception to this rule when the less favourable treatment is related to age. Under section 13(2), a measure that directly discriminates on the basis of age, such as an Employer Justified Retirement Age (EJRA), may be justified if it is a proportionate means to achieve a legitimate aim. The burden is on employers looking to enforce an EJRA to prove that the policy meets this test. This can be a difficult burden to meet, as case law has established that the legitimate aim relied upon cannot be something that only benefits the employer. It must relate to social policy objectives and be in the public interest.

Determining whether a compulsory retirement age is justified is not always clear, as two recent tribunal cases demonstrate.

Pitcher v Oxford University

Professor Pitcher brought claims for unfair dismissal and direct age discrimination against Oxford University for its EJRA, which (at the time) forced him to retire at the age of 67. At the Employment Tribunal (ET) the University presented several legitimate aims to justify its policy, including:

• intergenerational fairness;
• succession planning; and
• increasing staff diversity through the creation of vacancies.

The ET accepted the University’s argument and ruled in its favour, finding that the EJRA was justified. Professor Pitcher appealed to the Employment Appeal Tribunal (EAT).

Ewart v Oxford University

In this case, Professor Ewart (another professor at Oxford University) brought claims for unfair dismissal and direct age discrimination against the University after he was forced to retire under the same EJRA policy. Surprisingly, the ET reached the opposite conclusion than in Pitcher, and found that the retirement policy was not justified. In this case, the ET had the benefit of additional evidence, including a statistical analysis which showed that that EJRA had a minimal effect on vacancy rates. The ET reasoned that the EJRA was not proportionate; the “trivial” impact on vacancy rates was outweighed by the discriminatory impact on professors who were forced out of their jobs. Oxford University appealed the decision to the EAT.

The Employment Appeal Tribunal decision

Both appeals were heard together, but employers who were hoping that the EAT would provide clarity on the two conflicting decisions were sorely disappointed. The EAT dismissed both appeals, finding that the lower tribunals had been entitled to reach the conclusions they did based on the evidence that was available to them at the time. These conflicting cases show that it is not always clear whether a compulsory retirement age will be justified, and each case will be fact specific.

For employers wishing to implement an EJRA at their business, it is important that they be able to show that:

1. There is a legitimate aim that the EJRA is intended to address; and
2. The EJRA is a proportionate means to address that aim.

It is the second point that will likely be the most difficult for employers. In the Ewart case, one of the factors that led the ET to conclude that the EJRA was not justified was evidence presented by Professor Ewart that the policy’s impact on vacancy creation was minimal. Employers should therefore monitor the effectiveness of their EJRA, and be able to present credible evidence that it is having a significant impact on their stated aims.

Before implementing an EJRA at your business, we would always recommend you seek legal advice to determine whether you could fall foul of the Equality Act 2010. If you have questions about the operation of an EJRA in your workplace or age discrimination contact our Employment Law Team today at employment@warnergoodman.co.uk or call 023 8071 7717.

To receive regular Employment Law updates from the team regarding recent tribunal cases and legislation updates, you can subscribe to our weekly Employment Law Newsletter by completing our subscription form or emailing us at events@warnergoodman.co.uk. 

ENDS

This is for information purposes only and is no substitute for, and should not be interpreted as, legal advice.  All content was correct at the time of publishing and we cannot be held responsible for any changes that may invalidate this article.