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Recent case has potential implications for compulsory retirement age policies

Lodders employment law specialist, Faye Reynolds, examines a recent case which has potential implications regarding employer’s policies for compulsory retirement age.

Background

Compulsory retirement is accepted as direct age discrimination under the Equality Act 2010. That is, unless the employer can objectively justify it as a “proportionate means of achieving a legitimate aim”, or can establish that being below that age is an “occupational requirement”. If an employer wishes to have a fixed retirement age, they must be able to show that:

  • It is intended to meet a legitimate aim;
  • Having that particular retirement age meets that aim;
  • It is proportionate to use that retirement age as a means of meeting that aim.

As touched upon above, proving objective justification is not the only way an employer can defend an age discrimination claim based on compulsory retirement. It could also show that the age limit on the job in question falls within the “occupational requirement” defence. There are subtle differences between the defences in the context of justifying a compulsory retirement. These are best discussed with your legal adviser.

The dispute

In the case of Ewart v Chancellor, Master and Scholars of the University of Oxford ET/3324911/20, an employment tribunal upheld a university professor’s claims for direct age discrimination and unfair dismissal following his compulsory retirement at age 69 under the university’s Employer Justified Retirement Age Policy (EJRA).

The university argued its policy was not discriminatory because it was a proportionate means of achieving a legitimate aim.

The employment tribunal found that there were legitimate aims for the policy, which included intergenerational fairness and career progression for junior academics, facilitating succession planning, and promoting equality and diversity.

The tribunal went on to find that the university’s policy was “in principle capable of contributing to the legitimate aims”. However, statistical evidence suggested that the policy only created 2-4% more vacancies than would otherwise have arisen. An effect that the tribunal described as “trivial in comparison with the discriminatory effect”. Additionally, there was no evidence of a system of career progression for junior academics, or expectation that they would be promoted, as senior posts were often filled externally.

In relation to the diversity aim, the policy was only one of many diversity measures adopted by the university, and the evidence suggested that the university did not view it as a particularly significant measure. It was concluded that the university had not shown that having an EJRA policy made a sufficient contribution to the legitimate aims to justify its discriminatory impact. The tribunal therefore did not need to go on to consider whether the particular retirement age chosen in the policy (67) was itself appropriate.

Since the reason for dismissal was unlawfully discriminatory, the tribunal also held that it could not amount to “some other substantial reason”, meaning that the dismissal was unfair.

Advice for employers

This decision contradicts an earlier decision in Pitcher v University of Oxford ET/3323858/2016, in which the university’s EJRA was held to be justified.

It is understood that the university intends to appeal the tribunal decision in the Ewart case. In the meantime, employers need to give careful consideration to any existing retirement policies, as they may be found to be discriminatory.

Lodders’ team of employment solicitors offer accurate, focused, and solution-based legal advice to a wide range of clients. We have forged an excellent reputation for advising SMEs, publicly owned companies, charities, and other bodies; as well as senior employees and stakeholders in respect of all manner of employment law related issues and, in particular, in respect of discrimination of all kinds.

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Get in touch...

For more information, please contact Faye Reynolds on 01242 229093, or via email.