In October 2011, the default retirement age in the U.K. will be abolished. U.K. employers had been able to require employees to retire at age 65 without reason by giving them at least six months’ advance notice of the requirement to retire. Employees could request to continue to work beyond age 65, and employers were obliged to consider such requests, but they were not required to justify any refusal. In other words, employees over this age did not have the ability to claim unfair dismissal.
Subject to transitional provisions, as of April 6, 201 1, U.K. employers are no longer able to give notice to compulsorily retire staff at 65 or any other age without breaching U.K. agediscrimination legislation unless the age chosen can objectively be justified. Employers seeking to do so risk claims of age discrimination and unfair dismissal.
It is intended that retirement at an age mutually agreed upon by the employer and employee will become the norm, but there will still be situations where employers can lawfully require employees to retire if the employers can show that the retirement age is objectively justified. An example would be a position that has physical requirements which an older person either cannot meet or finds harder to meet than a younger person would.
A large volume of case law is expected to develop surrounding the question of what can be objectively justified. Employers will need to give careful consideration to any fixed retirement ages and assemble evidence in order to be able to defend any claims of direct age discrimination brought in the employment tribunal—the evidential burden on employers will be high.
In order for any “retirement” dismissal to be fair under unfairdismissal laws, the usual rules requiring an employer to follow a fair procedure will apply. Employees should therefore be consulted, and employers should consider employee requests to stay on (where feasible), even possibly considering phased retirement through a move to part-time work.
In situations where employers are unable objectively to justify compulsory retirement, performance-based evaluation and, in appropriate cases, dismissal of employees regardless of age will continue to be lawful. In order for the procedure to be fair at law, the employee would need to be formally put on notice as to the employer’s concerns and given proper opportunities to improve before being eventually dismissed. In practice, this could take six months or more and is likely to lead to disputes and discord, since in many cases judgments about performance will be subjective and disputed. Standards and judgments about performance will have to be applied consistently to all staff to avoid allegations of age discrimination. Introducing/applying more rigorous processes of evaluation selectively for older employees would itself be an act of age discrimination, so employers will need to take care to avoid potential claims. With an aging population, these issues are likely to figure heavily in employment litigation over the years to come.