Compulsory Retirement - Do you have to retire at 65?

Posted 25th January 2013

Written by Malcolm Jones

In the 1890s about two thirds of males over 65 were 'gainfully occupied'.   This fell to 50% in the 1920s and by the 1980s was less than 10% - about half of whom were part time. 

With life expectancy increasing, but the level of pensions falling, many will want to work much longer. If you are able to carry on to 70, 75 or even older does your employer have to let you stay?

The lucky few who can afford to retire can do so at any age.  If you want to retire you should give the proper period of notice to the employer and then simply leave.

Difficulties can arise when your employer wants you to retire but you want to carry on working.

If you are doing a job that needs doing and doing it well, then the law says that in most cases you should be allowed to work on.

Employment Contract

Some employment contracts say that employment ends automatically when you reach a specified age.  If there is one of these clauses in your contract your employment will end on the date the contract provides.

If this happens or you are dismissed by your employer it is likely that you will be able to claim that the ending of your employment is both age discrimination and unfair dismissal.

Employees cannot sign away their employment rights in their contracts of employment.  This can only be done in certain circumstances where they are legally advised and sign a compromise agreement.

Age Discrimination

Ending your employment just because you have reached a certain age is likely to be age discrimination.

Compensation for claims for age discrimination, unlike unfair dismissal, is unlimited.  As it may be difficult for an older employee to find alternative employment a successful claim for age discrimination could be a significant amount.

Justification

Unlike most types of discrimination an employer may be able to ’justify’ discrimination on the grounds of age and so defend a claim.

Your employer will have to justify both the need for compulsory retirement at all and the age at which it takes place.

Employers have successfully justified compulsory retirement ages on the basis of:

  • promoting access to employment for young people;
  • the efficient planning of the departure and recruitment of staff;
  • sharing a limited number of employment opportunities fairly between the generations;
  • ensuring a mix of generations of staff so as to promote the exchange of experience and new ideas;
  • rewarding experience;
  • cushioning the blow for long serving employees who may find it hard to find new employment if dismissed;
  • facilitating the participation of older workers in the workforce;
  • avoiding the need to dismiss employees on the ground that they are no longer capable of doing the job which may be humiliating for the employee concerned;
  • avoiding disputes about the employee’s fitness for work over a certain age.

The employer has to be able to show there aren’t other, non-discriminatory, ways of achieving the same objective.

In addition even if the reason for compulsory retirement is accepted a Tribunal won’t always accept that it should be at the age the employer thinks it is.  It could be 65 or a higher number or possibly a lower one.  The employer has to be able to justify the chosen age.

It is discriminatory to assume that employees over a certain age will be unable to do something.  This is the case even if there is statistical evidence to show that most employees of that age can’t.  It is better to apply the test to the individual than assume they are typical of their age group.  In general all employees should be treated as individuals and not on the basis of their chronological age.

Sex Discrimination

It probably no longer needs saying that it is discriminatory to have different retirement ages for men and women.

Unfair Dismissal

Until fairly recently employees lost the statutory protection against unfair dismissal when they reached their firm’s normal retirement age.  This is no longer the case.  An employee who has passed retirement age is entitled to bring a claim for unfair dismissal in the same way as any other employee.

Compulsory retirement may be considered as a dismissal for some other substantial reason.  This can be a fair dismissal if the employer followed a fair procedure in retiring people at the compulsory retirement age.  Employees should be given adequate notice of impending retirement and proper consideration given to any request by an employee to stay beyond the compulsory retirement age as an exception to the general policy.

If an employee of any age is incapable of carrying out their duties then their employment may be fairly terminated.  The employer will have to carry out a proper procedure and the employee the opportunity of trying to persuade the employer they should not be dismissed.  Provided the employer does carry out a proper procedure the ultimate decision is that of the employer.  This tends to be unpopular with employers who may see compulsory retirement as a more dignified way of parting with a longstanding employee than using disciplinary procedures.

Conclusion

Compulsory retirement is a theoretical possibility, but it should only be used where the employer can demonstrate a clear need for it – rather than a general desire to have the flexibility to sack 65 year olds without legal repercussions.  Such cases are likely to be quite rare and the safest course is for employers not to pick an age at which employees will be forced to retire.

For more information contact Malcolm Jones on 01423 789 059 or malcolm@newtons.co.uk

The information contained in this article is intended for guidance only and is not intended to provide specific legal advice to you or your business. Expert advice on any issue should always be obtained. Newtons Solicitors Limited does not accept liability for any loss that may arise from relying on or using the information contained in this article.