Employers can force you to retire
Filed under: Retirement
It ruled that a solicitor who was forced to retire at 65 had not been discriminated against. So what does the ruling mean for you?
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The caseIn this instance, Leslie Seldon, a Partner at Kent law firm Clarkson Wright and Jakes, was forced to retire at 65. In fact his retirement came before the legislation in October, but he took the company to court, arguing that his forced retirement amounted to age discrimination. The court unanimously found against him, deciding that the firm had been acting reasonably when it forced him out of the door.
The landmarkThis is considered something of a landmark case, as since the new legislation was introduced banning default retirement ages, employers have been allowed to retire employees off as long as they have good reason to, and it has helped to establish what constitutes a good reason.
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Simon Rice-Birchall, Partner at international law firm Eversheds, explains: "The firm had to satisfy the employment tribunal that the treatment was justified as 'a proportionate means of achieving a legitimate aim'"
The firm argued that it was justified because it needed to ensure that younger employees had the opportunity to work their way up to Partnership level without being stuck waiting for an existing partner to retire. They also said they needed to have a fixed retirement age in order to help them plan for succession, and they wanted to limit the need to expel partners for poor performance.
The impactIt means, Rice-Birchall says, that: "Employers do have some flexibility when seeking to justify compulsory retirement, providing their reasons are consistent with public interest objectives such as inter-generational fairness and maintaining dignity in the workplace."
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So what does it mean for you?It may mean your employer can force you to retire. This may come as a bitter blow if you had planned to work on to supplement your pension income. As we reported earlier, this is increasingly likely for almost half of all employees.
There is some hope though. Rice-Birchall said: "Each employer must show that they are legitimate in their case. For example, if the aim is to improve recruitment of young people, has the employer got a problem in recruiting the young? As the Court says, "all businesses will now have to give careful consideration to what, if any, mandatory retirement rules can be justified in their particular business."
In addition, there has been no decision yet as to ether the firm was right to pick 65 as the forced retirement age. This has been sent back to the tribunal, and is likely to muddy the waters because he was forcibly retired before the new legislation kicked in. It means there's unlikely to be any clarity as to what age your employer can force you to go home.
What makes sense, therefore, is to work on a fall-back plan. Rather than assuming you can stay in your job forever if you cannot afford to retire, it will require a re-think. You may need to revisit your pension savings plans, or building up an alternative career for your later years.