News Commentary

Compulsory Retirement Age: Important new judgement

The Supreme Court has ruled this week that employers/partners do, in principle, have the right to require older members of staff/partners in the business to retire.  But the ruling said only that it was ‘acceptable’ for the law firm involved in the case to force its partner, Leslie Seldon, to retire – not that it was ‘right’ to make him leave aged 65.  This has implications for all practices with compulsory retirement ages for staff and/or partners.

First of all it is important to note that there is no ‘normal’ age limit – in this case it just happened to be 65.  Mr. Seldon is going back to tribunal for clarity on this point and it will undoubtedly be some time before any further ruling is issued.  So what are the salient points to consider in the meantime as a result of the court’s ruling and comment?

  1. It may be possible to justify a compulsory retirement age.  This will depend on the stated aims of the partnership/company which must be consistent with a wider social policy objective. For example, an aim to allow younger generations to become employees and to have reasonable prospects of promotion.  In addition the aims must be shown to be actual and legitimate in the particular circumstances of the employment.  It would be difficult to argue that the objective was to enable the hiring of younger generations if the practice already had a significant proportion of senior positions held by younger people.
  2. Do not assume that you will easily be able to justify compulsory retirement, and keep your  arrangements under regular review. A company/partnership will need to have some very valid reasons for having a mandatory retirement age and every situation will need to be considered on a case by case basis. This means that it will be very hard to establish whether a practice’s mandatory retirement age is justifiable until it is tested in court.
  3.  A Practice that currently has in place a policy of compulsory retirement would be well advised to review this now.  It will be unlikely that  one age for retirement would be appropriate across a workforce.  What might be relevant for a clerical worker would not necessarily be appropriate when considering a GP Partner.

 There is no simple solution to what can be a difficult decision in many practices. Clarity, if it ever comes, is some way off. 

 If you either have or are considering a mandatory retirement age, we recommend that you contact us for a review of your procedures to reduce the likelihood of a future  successful legal challenge.

Posted on April 27th 2012 in News Commentary

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