Retirement

Employers no longer have a statutory right to compel employees to retire, either at 65 or at any other age. Instead, retirement can only be by agreement. This agreement usually takes the form of a written term in the employment contract. If there is a recognised union, setting the retirement age should be a matter for collective bargaining.

Even if there is an agreed retirement age, there can still be age discrimination (direct and indirect) if the employer cannot justify that retirement age as a proportionate means of achieving a legitimate aim at their workplace.

Justification of direct age discrimination is explained in Chapter 2, on page 15. Here are some points to consider when negotiating a contractual retirement age:

• the employer can be challenged to show why there is a genuine organisational need for a retirement age;

• a retirement policy negotiated through collective bargaining is more likely to be judged proportionate than one that is imposed on workers (Loxley v BAE Systems (Munitions & Ordinance) Limited [2008] ICR 1348);

• the needs of the disadvantaged group must be considered before introducing a contractual retirement age, for example, by giving them enough advance notice to plan for the future;

• the availability of an adequate pension is an important consideration; and

• a reasonable policy should provide a right to request not to be compulsorily retired.