Retirement 




Employers no longer have a statutory right to compel employees to retire, at 65 or any other age. Employers who want to retire their workforce on reaching a certain age can only do so by agreement — usually an express contract term in the employment contract setting out a contractual retirement age (see Chapter 3). If there is a recognised union at the workplace, setting this age should be a matter for collective bargaining.



Even if there is a contractual retirement age, that is not the end of the matter. The employer will engage in age discrimination if that retirement age cannot be objectively justified as a reasonably necessary means of achieving a legitimate aim at that workplace (HM Land Registry v Benson [2012] ICR 627).




The employer’s statutory right to compel retirement at 65 was removed by law with the abolition of the default retirement age in April 2011.



In Seldon v Clarkson Wright and Jakes No.1 [2012] UKSC 16, the Court identified two broad categories of “public interest” aim that are capable of justifying a discriminatory retirement age. These are:



• aims that promote intergenerational fairness: helping young people to access the workforce and progress, enabling older workers to plan for retirement, sharing promotional opportunities between generations, facilitating workforce planning, promoting diversity and the exchange of ideas and experience, and recognising that older workers have already benefited from the retirement of older ex-colleagues; and 




• aims that promote dignity: avoiding the need to dismiss older workers on grounds of incapacity or under-performance. However, national charity Age UK has pointed out that this aim is itself based on outmoded stereotypical assumptions about the performance of older workers.




Protecting the health and safety of workers and the public is a legitimate aim, although employers should avoid making stereotypical assumptions about physical and mental fitness based on age where a more proportionate alternative is available, such as a policy of regular health check-ups for each worker past a certain age. In Fries v Lufthansa CityLine GmbH [2017] IRLR 1003, the ECJ agreed that some physical capabilities inevitably diminish with age. In this case, the ECJ ruled that a blanket age limit of 65 for commercial pilots (rather than a system of testing each pilot individually) was justifiable. 




Here are some factors to consider if negotiating over a contractual retirement age. Employers should back up any general assertions with evidence. For example, an employer who suggests that young workers are held back by older workers must be able to show with facts and figures that this is a genuine concern at their workplace:

• the needs of the disadvantaged group should be considered when devising a retirement policy. Change is more likely to be reasonable where those affected get enough advance notice to plan for the future (European Commission v Hungary [2012] EUECJ C-286/12);

• a retirement policy negotiated through collective bargaining is more likely to be judged proportionate and reasonable than one that is imposed on workers (Seldon No.1, Loxley v BAE Systems (Munitions & Ordinance) Limited [2008] ICR 1348);




• the availability of an adequate pension is an important consideration (Rosenbladt v Oellerking Gebaudereinigungsges mBh [2010] EUECJ C-45/09); and




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




In June 2014, the right to request flexible working was extended to all employees with 26 weeks’ service. This development is particularly useful to employees planning retirement. For more information, see Chapter 9. 





“Flexible retirement” is supported by the TUC and the Chartered Institute of Personnel Development. In some workplaces, unions have negotiated flexible retirement agreements. For examples, see the LRD booklet Representing older workers — a guide for trade union negotiators (www.lrdpublications.org.uk/publications.php?pub=BK&iss=1676).