Can you still have a compulsory retirement age? Yes – but….

A recent survey showed that 46% of employers felt that the phasing out of the default retirement age will have a negative impact on their business. 22% believe they now have less capacity to take on younger employees.

It is possible for employers to objectively justify a compulsory retirement age, but clearly not many have decided to do so! However, there have been some recent cases where a retirement age has been justified.

The ECJ has held in recent cases from Germany and Bulgaria that it was justified to have a compulsory retirement age of 68, eg to encourage new entrants to a profession (dentists and teachers.) In a further German case however it was held that it was not justified for Lufthansa to have a compulsory retirement age of 60 for its pilots on health and safety grounds when the national retirement age for pilots in other German airlines was 65. A leading case in the UK concerning the compulsory retirement age of 65 of a partner in a law firm is due to be heard by the Supreme Court in January 2012. So far the firm has successfully argued for retaining the compulsory retirement age.

These cases suggest that it is possible in principle to have a compulsory retirement age. It may be appropriate in certain specified professions, eg fire fighters, or for certain limited groups within an organisation, eg senior managers. A compulsory retirement age could of course be older than 65.

Until we have more case law, it is best to tread very carefully...   

Can you discuss retirement plans with older workers? Yes – but…

You can, but it is advisable to incorporate these into discussions about career plans for all staff to avoid the risk of being accused of age discrimination.  Even the Government’s Employers Charter says ‘an employer is entitled to ask an employee about their future career plans including retirement’.

If you do not have an appraisal process, this is a good time to be thinking of introducing one, since you can ask all staff about their future career plans and no one asked about retirement can say they are being treated differently from younger workers.

for more information visit:  http://www.hrdept.co.uk/se_london.htm