Can Employees Be Forced To Retire Early?
Key Contact: Claire Knowles
Author: Katie Shanahan
There has recently been some discussion regarding whether the introduction of a fixed retirement age by an employer (known as an Employer Justified Retirement Age / ‘EJRA’) will amount to unlawful age discrimination. Typically, an EJRA constitutes less favourable treatment, as it requires someone to stop working because of their age (i.e. a protected characteristic). As we know, the Equality Act 2010 protects individuals from this type of discrimination.
However, the exception to the rule that direct age discrimination cannot be justified is such that the less favourable treatment (i.e. the EJRA) will not be discriminatory if the employer can show it is a proportionate means of achieving a legitimate aim.
The University of Oxford has been involved in two cases whereby its EJRA, which had been set at aged 67, was disputed. In both cases, it was argued that the EJRA was a proportionate means of achieving the following aims:
- inter-generational fairness (e.g. ensuring vacancies are available for a younger workforce);
- succession planning; and
- equality and diversity (e.g. so a younger / more diverse workforce can be recruited into more senior academic roles).
Pitcher v University of Oxford
Professor Pitcher was a Professor of History. He applied under the EJRA’s extension provisions to continue to work beyond the age of 67 but his application was refused and he was forced to retire. He bought claims of (1) unfair dismissal and (2) direct age discrimination and they were both subsequently dismissed by the Employment Tribunal. The Tribunal found that the employers were justified in implementing the EJRA as it constituted a proportionate means of achieving the legitimate aims listed above.
This is because the policies aim was to create vacancies, and a survey showed that it had been successful in doing so. The Tribunal also considered that the detriment to the claimant of compulsory retirement was mitigated by the receipt of a pension and the continued ability to use University facilities and apply for grants. Therefore, despite the fact that the decision to terminate the claimant’s employment was less favourable treatment on the basis of age, the Tribunal ruled that his dismissal was fair.
University of Oxford v Ewart
Professor Ewart was a Professor in Atomic and Laser Physics. He was granted a two-year extension beyond the EJRA and on applying for an extension the second time, the University refused the application. He again brought the same claims of (1) unfair dismissal and (2) direct age discrimination, but this time a different Employment Tribunal found that the EJRA was not a proportionate means of pursuing the legitimate aims above, and his claims were upheld.
They were upheld on the basis that the evidence available included statistical analysis and demonstrated that the rate of vacancies created by the EJRA was trivial and the introduction of an EJRA was therefore “without justification”. The difference in fact between this case and Pitcher is also noteworthy, whereby an extension beyond the EJRA had already been granted to the claimant, which was found to defeat the objectives of the EJRA.
The debate settled?
Appeals were made by parties in both cases and the EAT considered the two decisions together. Perhaps somewhat confusingly, it upheld both decisions and emphasised that its task was “not to strive to find a single answer, but to consider whether a particular decision was wrong in law”. It further confirmed that an error in law would arise “if the conclusion reached was perverse”, therefore neither of the Employment Tribunals had erred in law.
It found that both Tribunals had acted within the band of reasonable responses and the nature of the proportionality assessment meant that it was possible for different Tribunals to reach different conclusions when considering the same measure. This appears to be somewhat unhelpful for employers or employees who may be looking to assess whether a similar measure might be disproportionate. However, there are a few things that can be taken away from the decision:
- an EJRA will not necessarily result in unlawful age discrimination;
- whether or not there is sufficient evidence available to demonstrate the impact of the EJRA will have an impact upon the Tribunal’s decision – in Ewart, there was evidence available that was not presented in Pitcher, which swung the balance towards the policy being unjustified;
- there is clearly no one size fits all when it comes to compulsory retirement policies and the Tribunal will analyse the individual facts and evidence available in each case in order to reach a conclusion; and
- employers can take reassurance in the early years of any EJRA that a Tribunal will not require evidence since it cannot reasonable be expected to produce it.
Employers who are considering imposing a compulsory retirement age will need to ensure that they have strong justification for doing so and that the policy’s discriminatory impact does not outweigh its justification. Equally, employees will need to rely on evidence that the benefits of the justification for the policy are minimal, or at least, are outweighed by its discriminatory impact.
At Acuity, we have vast experience in advising on discrimination claims, therefore if you are seeking advice in this area, please feel free to contact a member of our employment team.