Compulsory retirement – An unusual case study

Since April 2011, the default retirement age of 65 no longer applies. Therefore, an employer setting a compulsory retirement age will be at risk of unlawfully discriminating against its employees unless it can show that compulsory retirement is objectively justified as a proportionate means of achieving a legitimate aim. The Employment Appeal Tribunal has recently heard appeals from two separate and opposing Employment Tribunal decisions in relation to a compulsory retirement policy operated by the same employer. This led to an interesting and perhaps unexpected outcome.

The cases

The appeal cases of Pitcher v the University of Oxford and the University of Oxford v Ewart, arose out of the Employer Justified Retirement Age (EJRA) scheme operated by Oxford University, which in general terms led to employees facing compulsory retirement at 67.

The University had the following legitimate aims in operating the EJRA:

1. inter-generational fairness;
2. succession planning; and
3. equality and diversity

The EJRA was said to facilitate other measures in achieving those aims by ensuring vacancy creation was not delayed and recruitment into senior academic roles might take place from a younger, more diverse range of people.

The Employment Tribunal hearing for Professor Pitcher’s case, found the EJRA to be justified and that there was no age discrimination or unfair dismissal, whereas the completely separate Employment Tribunal hearing for Professor Ewart’s case found the opposite, and upheld his claims of age discrimination and unfair dismissal.

Findings of the Employment Appeal Tribunal

The Employment Appeal Tribunal found that the EJRA enabled the legitimate aims outlined above to be achieved. In terms of whether the legitimate aims could be objectively justified, it was said that the nature of the assessment undertaken by the different Employment Tribunals meant that it was possible for them to reach different conclusions.

It was found that there were two significant differences in the way in which the evidence was presented to the two Employment Tribunals:

• The Tribunals received different evidence on the detriment suffered by those to whom the EJRA applied, and so were entitled to give different weight to the mitigating factors relied on. For instance, in Professor Pitcher’s case, the Tribunal had given weight to survey evidence regarding those who would have continued in employment if the EJRA had not applied (only 24% who typically would have worked a further three years). The Tribunal in Professor Pitcher’s case had also considered the mitigating effects of provisions that allowed for an extension of employment beyond the age of 67, and other post-retirement opportunities for senior academics.

• One Tribunal had the benefit of statistical evidence on the impact of the EJRA upon the creation of vacancies, which was not available to the other. In Professor Ewart’s case, he had presented a statistical analysis which showed the rate of vacancies created by the EJRA was trivial (2 – 4%).

On this basis, the Employment Appeal Tribunal decided that neither Employment Tribunal had made an error when reaching their decisions and so both appeals were dismissed.

Conclusion

The unusual aspect of this decision is that it upheld different decisions made at Employment Tribunal level in respect of the same compulsory retirement policy. Employers might therefore be worried about whether their own policy on compulsory retirement can be justified. In our view, employers with such concerns should start by looking at what they say their legitimate aims are in operating the policy and should then collect and review any evidence to see whether those aims are being met. For example, if compulsory retirement is not leading to senior roles being offered to a younger and more diverse set of people, then maintaining the policy is going to be harder to justify.

This is a complex area of law, and we would always recommend taking legal advice before making decisions on whether to operate a compulsory retirement policy. Age discrimination claims can be very costly and can cause reputational damage too. Our team has significant experience in handling discrimination claims for employers and can work with you to reduce the risk of claims being brought against you.