The Government announced in July that as from October 2011, with phasing in from April 2011, the current exemption from anti-age discrimination law which allows compulsory retirement of employees at age 65 or over is to be abolished. The fact that there is still no official response to the consultation on the proposal although it ended two months ago may suggest a rethink is taking place (although it must be said that there is no evidence for this). If the government does back track on its proposal and decides to retain a “default retirement age” after all it would be likely to set it at a higher age than 65.
Currently, in law there are two ways in which an employer is able to force an employee to retire without risking a successful age discrimination claim. The first is to take advantage of the age 65 default retirement age exception noted above (provided proper procedures are followed). The second is to use the provision which allows an employer to require an employee to retire at any age if this can justified as “a proportionate means to achieve a legitimate aim”.
No doubt from a strictly legalistic point of view reliance on the second of these on its own, as proposed by the government, is fine. However from a practical and human point of view relying on this second method alone has obvious disadvantages. It involves removing a simple and clear cut way to avoid the unpleasantness for both employers and employees of having to justify enforced retirement by, for example, reference to the employee’s capability. At the same time it almost guarantees more litigation to establish in particular cases whether dismissing an employee – for that is what enforced retirement is – was justifiable. For these and other reasons, many have argued that it would be sensible to retain a default retirement age, albeit increasing it to, say, 67 or aligning it in some way with state pension age.
It is evident that the very process of removing the default retirement age could be counter-productive, at least in the short term. Doing so will no doubt encourage employers of at least some employees aged 65 or over to give them enforced retirement notices before April 2011, while there is still time. Indeed already there are signs that this may be happening. Although they have denied that the proposed abolition of the default retirement age has had anything to do with their decision it is reported that the Longleat Estate has recently given dismissal notices to all 27 of their staff who are aged 65 or over (see “Longleat staff aged over 65 made to retire“, BBC News, 25November 2010).
It is worth noting that the EU Directive which requires Member States to ban age discrimination does NOT ban provision of a “default retirement age”. The directive itself specifically provides that “differences of treatment on grounds of age shall not constitute discrimination, if, within the context of national law, they are objectively and reasonably justified by a legitimate aim, including legitimate employment policy, labour market and vocational training objectives, and if the means of achieving that aim are appropriate and necessary“.
Interpreting the Directive, the European Court of Justice has confirmed in various cases that Member States can lawfully set a default retirement age provided it can be objectively and reasonably justified. It has recently indicated the sort of considerations which should be taken into account in particular cases (Rosenbladt v Oellerking Gebäudereinigungsges mbH on 12 October 2010) and that whether a compulsory retirement age can be justified in any particular case is a matter for the national courts (Georgiev v Tehnicheski universitet Sofia on 18 November 2010), confirming what it had previously said in the well known British Heyday case in which Age Concern failed in its bid to have the British age 65 default retirement age declared unlawful.
Those interested should keep a careful watch out for the Government’s response to the consultation noted above. Subject to that, however, the present position is that from April 2011 it will be unlawful to give notice to an employee requiring him or her to retire because they have reached age 65 (the reference to October 2011 above is because that is the final date at which such a notice can expire).