Are compulsory retirement policies discriminatory?
Until 2011, employers were entitled to force older employees to retire when they reached 65 (which was the then Default Retirement Age (DRA)) by following a statutory notification process. The DRA was controversial and was eventually abolished following a high-profile campaign, meaning that it could no longer be used by employers to justify compulsory retirement.
Furthermore, compulsory retirement can be seen as direct age discrimination as it represents less favourable treatment to the affected employee on the grounds of their age.
However, age discrimination and, therefore, a compulsory retirement policy may be lawful if it can be shown by the employer to be justified as a proportionate means of achieving a legitimate aim. Such legitimate aims may include opening up pathways for younger workers to advance up the organisation or providing the employer with a sense of stability in relation to future planning.
The Employment Appeal Tribunal (EAT) was recently asked to consider this issue in two joined age discrimination appeals involving Oxford University and its enacting of an Employer Justified Retirement Age (EJRA) policy.
The three-point criteria underpinning and justifying Oxford’s decision to implement a EJRA of 67 was an attempt to pursue:
- inter-generational fairness;
- succession planning; and
- equality and diversity.
In the case of Professor Pitcher, the EAT held that the application of the EJRA of 67 was not discriminatory on the grounds of age and therefore the dismissal was deemed fair. Whilst the EAT acknowledged the lack of evidence available to demonstrate that retirement would materially further the University’s stated legitimate aims, it concluded that the significant number of opportunities available to retired academics mitigated any discriminatory impact.
In contrast, the dismissal of Professor Ewart was judged to be both unfair and discriminatory because the University provided insufficient evidence to prove that the dismissal advanced the legitimate aims in a meaningful way (by helping to bring about a more diverse and youthful staff). Consequently, the EAT found that the application of the EJRA was disproportionate in this case.
The EAT ultimately acknowledged that it was less than ideal to have reached diverging judgements in relation to two similar cases, particularly as both involved the same institution, however, it was keen to stress that both outcomes were correct as a matter of law and it was not the responsibility of the EAT to arrive at a unifying answer for the sake of expediency.
These cases will provide a useful reference to any employers wishing to implement compulsory retirement measures for older employees. Employers still need to take care that any policies are proportionate and advance legitimate, reasonable aims and are not simply used as a tool to remove older members of staff for commercial reasons.