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Employers used to be able to force workers to retire at 65 (known as the Default Retirement Age), writes Bob Fahy, a partner at law firm VWV.
But the legislation behind this was scrapped in April 2011, with the result that workers can generally carry on beyond 65 if they choose to.
However, exceptions to the rule exist – as two employment tribunal cases involving the University of Oxford and discrimination claims have highlighted.
A contractual retirement age
The University of Oxford enforces a contractual retirement age which requires employees to retire before their 69th birthday.
Termed the Employer Justified Retirement Age (EJRA) policy, its broad justification is based on three legitimate aims:
- to foster intergenerational fairness
- to aid with succession planning
- to promote equality and diversity on the basis that older academic cohorts tend to be less diverse
The university’s policy requires all employees at grade eight or higher to retire before their 69th birthday.
In June 2014, John Pitcher was notified by the university that his retirement date would be 30 September 2016, in line with the EJRA. He requested to work beyond this date, but this request was denied. He brought direct discrimination and victimisation claims in the tribunal.
Separately, in 2014, Paul Ewart was granted a two‑year work extension until he was 69. He later applied for a second extension, which was rejected, and in September 2017, he was forced to retire in line with the EJRA. He brought unfair dismissal and age discrimination claims in the tribunal.
The tribunal in Prof Pitcher’s case dismissed his claims of direct age discrimination and unfair dismissal, finding that the EJRA was justified and the dismissals fair.
A different employment tribunal in Prof Ewart’s case upheld his claims of direct age discrimination and unfair dismissal, finding the university had not shown the EJRA to be justified.
Both claims were appealed to the employment appeals tribunal (EAT), which considered the two appeals together.
Was it discrimination?
In the context of age discrimination, an employer will not have discriminated against an employee if it could show the treatment was objectively justified because it was “a proportionate means of achieving a legitimate aim”.
This means that EAT would have to decide whether the university’s aims for the EJRA policy were legitimate and, if so, whether the policy was a proportionate way to achieve those aims in each case.
That latter question requires a weighing up of the gravity of the effect of the policy on the employees disadvantaged by it against the importance of the legitimate aims.
In both cases, the EAT held that the policy did facilitate the aims by not delaying the creation of vacancies, thereby a younger, more diverse cohort of candidates could be considered for senior academic roles. However, the EAT rejected both appeals and upheld the opposite outcomes that had been reached by each tribunal – confirming that Prof Pitcher’s compulsory retirement was justified and a fair dismissal, but Prof Ewart’s dismissal was discriminatory.
The EAT acknowledged it was less than helpful for an employer to be faced with what appeared to be conflicting employment tribunal decisions relating to a particular policy, but stressed the nature of the assessment of whether a policy is objectively justified is always specific to the facts and evidence before the tribunal, and as a result, it is possible for different tribunals to reach different conclusions when considering the same measure adopted by the same employer in respect of the same aims.
In these cases, Prof Ewart had conducted statistical analysis that enabled him to persuade the employment tribunal that the EJRA policy appeared to create no more than approximately between two per cent and four per cent more vacancies than if had not existed. This evidence had not been put to Prof Pitcher's tribunal, allowing it to come to a different conclusion.
Considerations for employers
The EAT decision confirmed some of the legitimate aims that may be relied on by employers when justifying a compulsory retirement policy, which are – as aforementioned – the promoting of intergenerational fairness, facilitating succession planning, and the promotion of equality and diversity.
But because the evidential burden is on the employer, employers should not safely assume the impact of their policy is clear and obvious. Therefore, they should take several steps to protect their position.
In particular, they should consider how they will measure the effect of their chosen policy on the legitimate aims and keep retirement policies under regular review, making changes if the desired results are not being delivered.
Statistical evidence and case studies should be used to demonstrate the achievement of the legitimate aims sought by the retirement policy, and use reasoned projections and estimates of the impact of the policy as further evidence.
Finally, employers should consider how any mitigations – such as extension procedures – relate to the legitimate aims being pursued, and the balance between those aims and the effect on the discriminatory impact of the policy.
Employment law is difficult enough to navigate without employers falling into self-made holes.
Employers that use data and evidence to inform decisions stand a much better chance of staying out of the employment tribunal.