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.

Start Quote

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."

 

More on This Story

The BBC is not responsible for the content of external Internet sites

Comments

This entry is now closed for comments

Jump to comments pagination
 
  • 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
    +9

    Comment number 44.

    The Government tell you to work longer,the employers tell you they don't want you to.Sounds like the usual chaos we've come to expect in this country.

  • 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
    +4

    Comment number 42.

    That's as clear as mud to me. Either there's a fixed retirement age or there's not.

    Anyway, for me, not having a 70yr-old TV actor play the part of a 30yr-old is objective. Not using a 70yr-old to advertise products aimed at 30yr-olds is objective. But *nearly* every objective test is about competence.

    Stopping 65-year-olds working to be replaced by 30-year-olds is what the law protects against!

  • 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
    +4

    Comment number 39.

    This particular case refers to a partner in a law firm. The law firm argued that is was reasonable to have succession plans in place and to act on them.

    However, the case has still been referred back to the tribunal to decide whether 65 is a reasonable age to get rid of this partner.

    It does not follow that this now applies to all workers.

  • rate this
    +1

    Comment number 38.

    I can't believe what I'm reading here. This is so muddled it beggars belief it comes from supposed learned experts.
    For goodness sake make your minds up.
    The problem of old folk not being wanted any more was easily solved by paying up their retirement early. No such luck these days.
    Seriously though how are young people ever going to work if us old folk cling on to our jobs indefinitely.

  • rate this
    +18

    Comment number 37.

    So you won't be able to claim your state pension but you can be forced to retire???

  • rate this
    +11

    Comment number 36.

    You couldnt make it up, so the government wants us to work on till we drop but the employers dont want us because we are old and useless, stop the world i want to get off.

  • rate this
    +1

    Comment number 35.

    Think you'll find Capitalist Cameron behind this. He also wants to make it easier for Companies to fire people.

    Now, coming from a Politician voted in by the general public, does this sound like a Prime Minister who is representing the people or the guests at one of his dinner parties?

  • rate this
    +2

    Comment number 34.

    Surely this decision will have to go to judicial review to see whether it is in keeping with recent equality law?

  • rate this
    +5

    Comment number 33.

    I am already considered over the hill yet under 50. Employers in the UK threw the baby out with the bath water years ago when the staff department became HR. We are no longer staff but a human resource to be chewed up and spat out at will. My last job interview failed due to me giving too many work experience answers to the questions instead of school. You cannot win.

  • rate this
    0

    Comment number 32.

    If you have a major problem with youth unemployment do you really ant to clog up the work force with semi-retired pensioners. In my business, which involves physical work, people become less productive over 60 years of age, so expecting the employer to find work for them over 65 is un-realistic. Maybe we should all retire after 25 years work like the police! Oh look I am retired, oh no I am not!

  • rate this
    -2

    Comment number 31.

    Kicking workers while their down!

  • rate this
    +7

    Comment number 30.

    HaveIGotThatWrong is correct but we are discriminated against all our lives! Over the last 60 years I have been respectively too young, too qualified, too old, too experienced and latterly too short and too fat. Basically management and personnel (HR) will find any excuse not to employ you if you fall into their prejudice zone or retire you when they want to grab your pension fund.

  • rate this
    +4

    Comment number 29.

    @22. John Dobson

    The change in law makes no difference as this relates to an employer's ability to set a retirement age.

  • rate this
    +17

    Comment number 28.

    If I am translating this article correctly, this ruling is a precedent that sets out employers can ask someone to retire if they wish employment being shared out among generations. If true then this is likely to be used to get rid of older staff, who, if they don`t have a work pension, will just be cast onto the dole until their state pension kicks in.

  • rate this
    0

    Comment number 27.

    I can see both sides of this. I once worked for a firm that contracted people to retire at 60.

    However, when the law was changed some refused to go. I thought that was unjust, as they'd already agreed to go before the SRA anyway, but it seemed they were covered.

    I'm not sure what effect the recent rule will have in such cases. Ideas?

  • rate this
    +3

    Comment number 26.

    I must be missing something but does this not make a complete nonsense of the fact that we are supposed to work longer now. Regardless of political persuasion the least you can expect from any government is consistency. At this moment in time one can only draw one conclusion that is this current government doesn't know what it's doing.

 

Page 8 of 10

 

More Business stories

RSS

Features

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.