Changes that the coalition government intend to make to the default retirement age mean employers will have to justify their retirement ages or face the risk of claims.
The government’s intention of removing the default retirement age (DRA) will mean an end to a risk-free route of dismissing employees. The DRA, which is currently 65, has acted as an exemption, allowing employers to retire employees without the fear of age discrimination claims. Following the changes, employers will have to be able to justify their retirement ages in order to avoid claims of discrimination. Such justifications can be very difficult.
A professional football referee, Martin, brought an age discrimination claim to court for his forced retirement at age 48. Although this retirement age concurred with the retirement policy of Professional Game (a Premier League referee supplier), the tribunal sided with Martin. The tribunal remained particularly unpersuaded as to why the age was 48, as oppose to 47 or 49. Even though, as the tribunal stated, 48 is between the usual range of referee retirement ages in other countries and thus in a sense justifiable, Professional Game was expected to go further in justifying the exact choice of 48.
So how do employers justify a retirement age? The Employment Appeal Tribunal (EAT) suggests that employers should analyse their company’s experience to identify the age at which performance begins to decline. However, such an assessment of performance is never easy, and new companies with limited experience will have few ideas to draw upon.
While this doesn’t bode well, especially for new companies, the tribunal’s suggestion in the case of Martin of careful performance management should result in a justifiable retirement age.