Supreme Court sheds light on legitimate retirement reasons.
If you are worried about retiring your staff following last year’s repeal of the default retirement age of 65, a new ruling by the Supreme Court could help.
In particular, it is very useful when considering whether you can retire older members of staff if retaining them is:
- Causing risks or disputes when they are no longer fit for work
- Preventing you from employing younger people
- Leading to loss of staff due to limited progression opportunities
In the case of Seldon v Clarkson Wright and Jakes (a partnership)  UKSC 16, the Supreme Court highlighted that employers may be able to justifiably retire a member of staff if the employer’s decision is based on social policy objectives.
The case concerned a partner in a law firm who wished to continue working with the firm after the age of 65.
Instead, the firm retired the partner, basing their decision on three main objectives:
- Retaining associates by being able to offer them a partnership opportunity after a reasonable time
- Facilitating workforce and partnership planning by giving realistic expectations of when vacancies would arise
- Contributing to a congenial workplace by limiting expulsion of partners due to performance issues
The matter went from tribunal all the way to the Supreme Court, which concluded that the firm did have legitimate aims for insisting the partner retire.
This was because they were -social policy objectives’ and of public interest, rather than relating to the firm’s business aims such as improving competitiveness. However, this remains a complicated area and each case is taken on the individual facts.
So if you are considering whether you may be legally justified in compulsory retiring an employee, it will help if you can show that the retirement:
- Promoted access to employment for younger people
- Helped you plan efficiently for staff churn
- Helped ensure you shared job opportunities fairly across different age groups
- Ensured a mix of staff ages to promote the transfer of ideas and experience
- Cushioned the blow for long-term staff that might struggle to find a new job if sacked
- Avoided humiliating staff on the basis they are no longer up to the job
- Prevented staff disputes where the person to be retired is not fit to work
It is not all black and white for legitimate retirement reasons
Whilst these objectives might justify retiring somebody, they don’t necessarily mean you can retire them at 65. The Court said this matter would have to go back to the tribunal to be considered, so we’ll have to wait and see what they decide.
If you would like any further advice, please contact our Employment & HR team on 01332 340 211.