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Leaving Before Your Time

Leaving Before Your Time

In February this year, just a week or so before her 24th birthday, Olympian Rebecca Adlington announced her retirement from swimming. Sir Alex Ferguson’s retirement hit the headlines last month and since then David Beckham has played his last home game of football for Paris Saint-Germain at the tender age of 38. I don’t know whose announcement had the biggest impact (I’m guessing Fergie judging by the fact it was plastered all over the news for at least a week). It seems that the issue of retirement has been in the forefront of media attention just recently, and not just where football is concerned. Last week the six year battle between Mr Seldon and the firm where he formerly worked, Clarkson Wright & Jakes, came to an end, with the employment tribunal finally rejecting Mr Seldon’s age discrimination claim.

Mr Seldon was a partner with Clarkson Wright & Jakes, a firm of solicitors. He brought a claim of age discrimination against them in 2006, when he was forced to retire at the age of 65 under the partnership’s rules. The case was taken to the Supreme Court, where it was concluded that the firm could justify having a mandatory retirement age. However, the court did not consider whether having this set at the age of 65 was appropriate. That decision was made by an employment tribunal last week, which decided that 65 was indeed an appropriate retirement age.

The Tribunal concluded that there were three legitimate aims which justified the firm having this retirement age:

  1. Retention – by retiring older members of staff, there was room at the top for junior members of staff to be promoted, helping to ensure that they stayed in the company.
  2. Business planning – staffing levels needed to be managed to create a long term strategy for the business.
  3. Collegiality – the need to encourage good working relationships and allow departures of older staff with dignity.

This decision does not give employers the right to impose a mandatory retirement age of 65. Justification will always depend on the facts in each case. Additionally, since the case began, the default retirement age has been removed in the great majority of situations. The Employment Tribunal stated that having a retirement age at the time Mr Seldon retired (in 2006) was justified, but societal norms relating to retirement age have changed, and the tribunal specifically stated that the case might be decided differently on facts arising today.

Every employer knows that there are advantages and disadvantages of having older workers present in your company. On one hand, they’re likely to know the ins and outs of the organisation. But increasing age can bring problems and there might be performance or underlying health issues which will need to be addressed. Fergie, Beckham and Adlington have shown Britain that it’s fine to leave at the top of your game; and good on them I say. It’s not easy to admit that it’s time to go, especially in a job that you love.

While the Seldon judgement will be welcomed by a wide range of businesses who still maintain a default retirement age for a number of different reason, it remains a very high bar for an employer to satisfy.

Even in the few years since the removal of the default retirement age, society has changed and technology has advanced. One consequence is that that people are living longer and working until they are much older. The Government is also slowly pushing back pension age; by 2040 the pension age will be 70. Having a default retirement age in your business is risky, and it’s important that you think about whether it is a proportionate means of achieving a legitimate aim. Whilst you might think that it’s justifiable, applying a retirement age is a high risk option for any business, and the final decision lies with the tribunal if it is the subject of a legal challenge.

If you’d like help on any of these issues, then please don’t hesitate to get in touch.

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