Since the removal of the default retirement age, there have been surprisingly few cases giving guidance as to when an employee might be lawfully retired. Some employers have implemented their own ‘Employer Justified Retirement Age’. Others are still considering the this option. The concern is whether such an approach is effective and can be justified and therefore recent case of Harrod v Chief Constable of West Midlands Police and others has provided welcome guidance.
Background to the case
The Employment Tribunal was asked to consider the lawfulness of the retirement of a number of police officers, following a Government requirement for the police force to reduce its expenditure by 20%. Given 80% of its expenditure was on labour costs, it was an obvious target for reduction.
The Police Pension Regulations 1987 permits a police authority to retire officers if it considers their retention is not in the general interests of efficiency and provided they have the requisite period of service to attain a defined pension entitlement (regulation A19). Generally, officers to whom A19 can be applied will have served 30 years and will be at least 48 years of age.
Twenty-seven police authorities considered the possibility of retiring a number of officers who satisfied Regulation A19, and of these seven authorities decided to retire most of their officers who satisfied the requirements of regulation A19.
A number of officers brought complaints to the Employment Tribunal claiming they had been discriminated on the grounds of their age. It was argued that the policy of retiring staff who satisfied regulation A19 was indirectly discriminatory on the grounds of age. The officers alleged the practice placed older officers at a substantial disadvantage and could not be objectively justified.
The Police Authorities against whom the claims were brought admitted that the policy of removing officers by relying on regulation A19 was potentially indirectly discriminatory as it put older officers at a particular disadvantage. The issue for the Tribunal to decide was whether the policy was justified.
For indirect discrimination to be justified the employer must demonstrate that they had a legitimate aim and the method/policy to produce that aim was proportionate in achieving it.
The Tribunal found that although reducing cost was a major factor in the police authorities’ approach, it was not the only factor. The authorities also wished to maintain an effective and efficient police force and believed the policy was aimed at achieving that result. The Tribunal held that the police authorities had a legitimate aim.
Once a legitimate aim was established the Tribunal was required to consider whether the method used to achieve that aim was proportionate i.e. was the retirement policy adopted proportionate in achieving the desired efficiency improvements? The Tribunal found that most officers (80 to 95%) would have retired once they had satisfied the requirements of regulation A19. Therefore, the savings to be gained from forced retirements were modest.
The Tribunal went on to find that the policy of forcing officers to retire when they satisfied the requirements of regulation A19 had a severe detrimental effect on those relatively few officers who wished to remain employed. They found that there were a number of alternatives that could have achieved the desired result without such a severe discriminatory impact, and that the majority of the reduction in officer numbers had been achieved by a recruitment freeze. Accordingly forcing officers to retire was not necessary or proportionate.
The case has been appealed to the Employment Appeal Tribunal. In the meantime, the Tribunal’s decision demonstrates that implementing an Employer Justified Retirement Age is not easy, and requires careful analysis and planning. Moreover, the case highlights that proportionality is the key to justifying any provision, criterion or practice that is discriminatory. Having a legitimate aim is only part of the defence, not the defence. The case also serves as a reminder that costs alone will not be sufficient to justify discrimination, and there need to be other factors (known as the “cost-plus” rule).
Harrod v Chief Constable of West Midlands Police and others, 3 February 2014