Age Discrimination - Over A Year After The Abolition Of The Default Retirement Age

In April 2011, the Government abolished the default retirement age ("DRA"). As a result (subject to various transitional provisions), it is now unlawful for employers automatically to terminate an employee's employment on their 65th birthday – unless it can be objectively justified.

As there is no upper limit on the amount of compensation that an employee can claim in relation to age discrimination, it is essential that employers address age related issues sensitively. Over a year after this change, what steps can employers take in relation to older employees without falling foul of age discrimination?

Retaining a normal retirement age ("NRA")

Under the Equality Act 2010, employers are able to retain a NRA provided that they can justify such action as a proportionate means of achieving a legitimate business aim. In order to ensure that moving to terminate an individual's employment at a specific age is not discriminatory, an employer would need to complete a detailed assessment to demonstrate the need for a NRA.

Careful consideration should be given to the age selected as 65 is no longer an accepted "default" age; therefore it may be more appropriate (and less discriminatory) to retain a NRA of 68, or 70 or more, rather than 65.

Employers should document and retain their analysis for the impact of retirement and show that they have carefully considered what age is appropriate and why. For example, it would be sensible to consider different areas of the workforce in light of their skills, the job requirements, health and safety considerations and career planning issues rather than simply enforcing a blanket age on everyone without considering the different factors. In addition, employers must carry out a balancing exercise to weigh up the discriminatory effect of the NRA against the benefits achieved for the business. Importantly, employers must be certain that there are no alternative, less discriminatory measures are open to them as a means of achieving the same business aim.

There are a number of aims which have been considered as potentially justifiable, including workforce planning, promoting the recruitment and retention of younger employees and protecting the dignity of older workers by not requiring them to undergo performance management procedures. However, the recent decision of the Supreme Court in Seldon v Clarkson Wright and Jakes [2012] UKSC 16 has highlighted the practical difficulties facing employers who wish to retain a...

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