Employers can force retirement, court ruling suggests

 
Older man The default retirement age was effectively scrapped in October last year

A landmark ruling by the UK Supreme Court has outlined the powers that employers have to force workers to retire.

The court unanimously dismissed an appeal by a solicitor who was told to retire by a law firm just after his 65th birthday.

Leslie Seldon, a partner at the firm, wanted to continue working, but his request was turned down.

Part of his partnership deed was aimed at ensuring succession at the firm.

Mr Seldon argued that the decision to make him retire at Kent law firm Clarkson Wright and Jakes, which came before the default retirement age was abolished in October, was age discrimination.

However, his appeal was turned down, signalling that fairness between generations was a legitimate aim for employers.

'Succession policy'

In this case, the employer argued that there were legitimate aims for its retirement policy. They included:

  • Ensuring younger workers had the opportunity of becoming a partner after a reasonable period
  • Facilitating planning by having a realistic long-term expectation as to when vacancies will arise
  • Limiting the need to expel partners for poor performance

The court said that employers needed to give particular consideration to whether a "public interest" was served when telling anyone to retire.

Start Quote

Employers can gain comfort from the fact that they can rely on employment being shared out among generations”

End Quote Niki Walker Taylor Wessing

"All businesses will now have to give careful consideration to what, if any, mandatory retirement rules can be justified in their particular business," the judgement said.

Yet this could include reasons of succession and letting workers go at a certain age because of poor performance, so not having to dismiss them.

However, it referred the case back to the employment tribunal to rule on whether 65 was an appropriate age for Mr Seldon to be told to go.

Me Seldon told the BBC that he "felt up to working". He said his motivation in taking the case was financial, with life expectancy increasing but the generosity of pensions falling.

Some clarity

Niki Walker, partner at law firm Taylor Wessing, said that the ruling provided some clarity for employers.

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This decision confirms that businesses can justify a compulsory retirement age based on legitimate aims such as workforce planning provided that this is proportionate”

End Quote Department for Business

"Employers can gain comfort from the fact that they can rely on employment being shared out among generations, and it is also legitimate to preserve the dignity of older workers by retiring them," she said.

"However, it is still not clear what is the correct age to retire somebody."

Legislation which came into force fully in October stops UK employers from compulsorily retiring workers once they reach the age of 65.

However, business groups have argued that employers have been left in limbo, fearful of asking workers aged 65 or over to leave the business for fear of being accused of ageism.

Age UK, which took on the case on behalf of Mr Seldon at the Supreme Court, welcomed the fact that the ruling made the law clearer and that people could not be retired just because of "stereotypes" of age.

Meanwhile, barrister Caspar Glyn QC said: "The case now provides a menu for the astute employer to follow, that means that whilst the gate has not been shut, it has been narrowed."

A spokesman for the Department for Business said: "This decision confirms that businesses can justify a compulsory retirement age based on legitimate aims such as workforce planning, provided that this is proportionate.

"While we do not expect this decision to fundamentally change the retirement policies of most businesses, we believe that this decision will give greater certainty to those businesses that have chosen to apply a retirement age.

"Legislation has always allowed a business to impose a set retirement age, so long as it could be objectively justified. This was the case while the default retirement age was in operation and remained the same following its abolition. This decision has given some guidance as to when this may be acceptable."

 

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  • rate this
    +24

    Comment number 45.

    This is so very wrong. Since the late 1980's, pension black holes have appeared and have gotten bigger and bigger yet over 20 years of successive Gov'ts and not one of them have attempted to address this issue which will mean a life of poverty or near-poverty for masses of people. Yet now Companies are allowed to retire people. I detest our wealthy, arrogant ruling elite.

  • rate this
    +19

    Comment number 43.

    Could somebody please explain why any sane person wants to work longer than they need to.I was raised with the motto "work to live" not
    " live to work".My wife and I are enjoying our retirement which we have achieved through not squandering money during our working lives and would hate to be working until our final demise.

  • rate this
    -2

    Comment number 41.

    It's only sensible for planning that a business can make people retire at the retirement age. As long as they're given notice etc what's the issue? Just 'cause you work for a company doesn't entitle you to a life-long job, you get pay they get work. I do find the generational justification odd and unnecessary, surely expanding the business is a better way of employing young people?

  • rate this
    +25

    Comment number 40.

    Mixed feelings about this - could be argued that people working beyond "normal" retirement age prevent younger people from getting a job, but when governments and bankers have destroyed pensions you can hardly blame folk for wanting to keep going! Now not only have they lost a huge chunk of their pension through no fault of their own, they are also being prevented from making up the shortfall!

  • rate this
    -1

    Comment number 17.

    It would create openings for younger staff positions as people retire and others are promoted - BUT we are all living longer and healthier lives, so we need to work longer....

    .....and people with their health intact, the mortgage paid off, a nice company pensions & savings in the bank, with professional skills, could make for a great army of volunteers in their communities.....

 
 

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