In this new era of the post-default retirement age world, all employers are now pretty much up to speed on the fact that, save for very narrow circumstances, it will be discriminatory to compulsorily retire an employee on the grounds of their age. Instead, employers are encouraged to discuss employees’ working arrangements on an equal basis regardless of age and to conduct thorough performance appraisals in order to manage out any poorly performing employees. No longer may employers simply await the impending retirement of older poor performers. Employers are also encouraged (although not obliged) to consider whether any flexible working arrangements can be accommodated as employees enter their later years, for example part-time working.
Only in very narrow circumstances, employers can rely on default retirement ages but they will have to pass the test of being “objectively justifiable”. This means that the imposition of a default age is a “proportionate means of achieving a legitimate aim”. Most of the cases on this point come from the European Court of Justice. There are very few industries which have been able to successfully argue that a default retirement age is a means of achieving a legitimate aim, such as ensuring continued competence, and that it is also a proportionate means of achieving that aim, i.e. that there is not a less discriminatory option.
Consequently, employers continue to struggle with the reconciliation of the fact that their employees will most likely have to stop working eventually with managing the process without falling foul of age discrimination legislation. In view of this, HRlaw has come up what we hope will be some helpful dos and don’ts of retirement in this new era.
Dos
Don’ts
(a) consulting with any trade unions or employee representative bodies;
(b) researching evidence regarding age and its link to any legitimate aims such as deterioration in performance; and
(c) considering proportionality, i.e. employers should identify whether there are other means of achieving its legitimate aims with a less age discriminatory impact than having a fixed default retirement age.
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