Seldon – Not a Repeal of Compulsory Retirement Laws
In theory, the Employment Equality (Repeal of Retirement Age Provisions) Regulations 2011 abolished employers’ right to require employees to retire. Despite recent press rulings that might suggest otherwise, that is still the law, so before employers rush to reintroduce compulsory retirement based on the ruling of the Supreme Court in Seldon v Clarkson Wright & Jakes (A Partnership), they will need to consider whether their intentions fit in with the grounds that might justify compulsory retirement. Even that won’t necessarily be enough, as cases could still be appealed to employment tribunals to determine whether the intentions were justified in the circumstances of the employer.
The Supreme Court’s judgment, handed down this week, confirmed that compulsory retirement may be permitted, but it would only be so if it has a “public interest” aim, and then only both if the discrimination is appropriate and necessary to achieving this end & no other, less discriminatory, measures are available.
Public Interest Aim
The Supreme Court identified examples that might meet the “public interest ” aim in paragraph 61 of its judgment:
[extract from paragraph 61] “For example, improving the recruitment of young people, in order to achieve a balanced and diverse workforce, is in principle a legitimate aim.” But if there is in fact no problem in recruiting the young and the problem is in retaining the older and more experienced workers then it may not be a legitimate aim for the business concerned. Avoiding the need for performance management may be a legitimate aim, but if in fact the business already has sophisticated performance management measures in place, it may not be legitimate to avoid them for only one section of the workforce.
That doesn’t mean that any of the examples given (or similar situations that may appear to have a “public interest” aim) will always be accepted as a legitimate aim – whether the grounds relied upon in Seldon’s case were sufficient is going back to the employment tribunal to consider, and it’s not likely that anything close to clear-cut guidance will emerge anytime soon. And of course, with people living longer & the government expecting people to work longer, it’s arguable that “a balanced and diverse workforce” could be expected to include older people among the workforce as well as young people.
Therefore, as well as being capable of being a legitimate aim, the actual grounds for requiring the retirement also have to be (and may need to be shown to be) the reason for the policy (see paragraph 59 of the judgment).
And even once the public interest hurdles have been satisfied, employers will still need to consider whether they could achieve the aim with less discriminatory measures – paragraph 62 of the judgment stated:
62. Finally, of course, the means chosen have to be both appropriate and necessary. It is one thing to say that the aim is to achieve a balanced and diverse workforce. It is another thing to say that a mandatory retirement age of 65 is both appropriate and necessary to achieving this end. It is one thing to say that the aim is to avoid the need for performance management procedures. It is another to say that a mandatory retirement age of 65 is appropriate and necessary to achieving this end. The means have to be carefully scrutinised in the context of the particular business concerned in order to see whether they do meet the objective and there are not other, less discriminatory, measures which would do so.
This matter has a long way to run before anything meaningful can be concluded, so employers can’t take solice (or rely upon media headlines) to introduce a policy of retiring staff just yet.
Whether your business needs to deal with young, old, or any other staff that might not justify retaining their employment, get in touch for advice that will protect your business.