Retiring an employee at age 65 is not unlawful
30 September 2009
On 26 September the long awaited outcome on the Heyday case was given in that a default retirement age of 65 is not unlawful. Therefore for now to have a compulsory retirement age and retire an employee at 65 is lawful without any fear of age discrimination even though the employee does not wish to retire.
This also means that you can (dismiss) retire an employee on their 65th birthday without a redundancy payment. However, for the retirement to be lawful you must still stick to the current statutory retirement procedure.
It also means that you can refuse to recruit anyone over the age of 65.
However, whilst most people do retire at 65, many employers value the skills and experiences that older employees bring to the work place and allow them to continue working after the default retirement age and there are currently 1.4 million people working past the state pension retirement age to prove this.
Whilst you can now set a mandatory retirement age of 65 should you wish to make a mandatory one for employees under 65 this will have to be objectively justified and due process followed.
The procedure for retirement still means that you can refuse any request to continue working beyond 65 without giving any reason for your decision.
Whilst the outcome on this case has now been finalised it wont be long before the Government (along with their plans for companies to have compulsory pension schemes) that they bring forward their review of the compulsory retirement age by a year to 2010 this is in part due to the increasing number of older employees in the UK.
Also the 260 employment tribunals that have been ‘stayed’ pending the outcome of this case will now move forward and are now likely to be dismissed or withdrawn where the statutory retirement procedure was followed. If a claimant argues that the retirement procedure was not followed correctly, for example if he or she was not given the right to appeal, or the timescales were not kept to, the tribunal may still hear the case and the dismissal could be found to be unfair.