Retirement age rows - What the Supreme Court's judgement means for you

  • By Josh Hall
  • 14 May 2012
Retirement age rows - What the Supreme Court's judgement means for you

Last week the Supreme Court made a landmark ruling in the ongoing row over retirement ages.

The court ruled in favour of a City law firm that had forced an employee to retire just after his 65th birthday.

Leslie Seldon, a partner in the firm, was told that he must go – despite the fact that he wanted to continue working. Mr Seldon claimed that his treatment amounted to age discrimination, but the Supreme Court ruled that the firm acted within its rights.

The court signalled that employers are entitled to enact mandatory retirement for reasons including succession planning, and for ensuring fair access to higher positions for younger workers. But it also chose to send the case back to an employment tribunal to determine whether or not 65 was the right age for Mr Sheldon to be forced to retire.

What is the legal position?

At first glance the Supreme Court’s decision seems to be entirely at odds with recent legislative changes. Until last year business owners were legally entitled to force employees to retire at 65. But, in a much-heralded move, the so-called Default Retirement Age was finally scrapped in September.

Despite this scrapping, the Supreme Court’s decision seems to indicate that there remain limited circumstances in which forced retirement may still be possible. In particular, businesses may be able to justify mandatory retirement if it is necessary for workforce planning, or if it will help to ensure fairness between generations of employees.

What should I do?

It is important to understand that despite the Supreme Court’s judgement, the range of circumstances in which forced retirement can be justified remains very limited. This is a very complicated area of the law, and errors by business owners can prove cripplingly costly.

You should remember that the Supreme Court has not ruled that 65 is necessarily an acceptable age for forced retirement; indeed, current legislation specifically outlaws this. Rather, the judgement suggests that mandatory retirement may be permitted on a case-by-case basis. It is therefore vital that you seek specialist legal advice before taking any action in this field.

Read more about: Staying legal , Employee and HR , Managing your business