Do you have to retire at 65?

Do you have to retire at 65?

You have an employee who is reaching the age of 65 and you contracts of employment state that employees will be required to retire at this age. Can you still do this?

In short the starting point is 'no'. But this is not absolute...

Up until 2011, upon reaching the age of 65 an employee could be compelled to retire and, assuming the correct procedure was followed, this would be deemed to be a fair dismissal for the reason of retirement. This is no longer the case following the abolition of the default retirement age, so what is permitted?

If you want to operate a compulsory retirement age now you will be at risk of being sued for both unfair dismissal and age discrimination. This means you will have to be able to establish the following when implementing the compulsory retirement age:

  1. That there was a potentially fair reason for dismissal - normally 'some other substantial reason';
  2. That the dismissal was fair and reasonable in all the circumstances; and
  3. The compulsory retirement age was a 'proportionate means of achieving a legitimate aim'.

This is easier said than done as you will essentially have to prove that you have a real business need that can only be met by having a compulsory retirement age which is, by its nature, directly discriminatory. Further you then have to show that the importance of that need justifies the discriminatory effect of the retirement age, and lastly that the age you have selected is appropriate to meet that need.

Our advice is that unless you are adamant that a compulsory retirement age is vital to the success of your business then it is not worth the risk. In any event, many employees will want to retire at or before 65 and of those who do not, if they are capable of carrying out the job to the required standard, all well and good and it they are not then they can be dismissed on the grounds of capability like any other employee.

For advice on age discrimination, unfair dismissal or on updating your contracts of employment give EL Direct a call on 0114 241 7092.

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