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Retirement rules : Supreme Court ruling confirms that retirement CAN still be enforced

The Supreme Court has ruled that a company who forced a member of staff to retire at the age of 65 have not broken the law, despite changes which came into force last year regarding the Default Retirement Age (DRA). From 6th April last year employers were no longer able to issue staff with retirement notices and from 1st October 2011, it became unlawful for a company to force employees to retire simply because of their age.

However, a case involving a Partner from a firm of solicitors who claimed he was forced to retire when he turned 65 has lost in his attempt to have his previously unsuccessful appeal reviewed and overturned.

In this case his employer (a city law firm) argued that there were legitimate aims for its retirement policy including ensuring young workers had the opportunity of becoming a partner after a reasonable period and limiting the need to expel partners for poor performance.

The Supreme Court held that the compulsory retirement age of 65 contained in the firm’s deed of partnership was a directly discriminatory measure but that it was capable of justification as it was founded on legitimate social policy aims aimed at ensuring succession at the firm and fairness between generations.

It would appear that despite legislation (which came into force in October 2011) preventing employers compulsory retirement ages of 65, employers can still enforce retirement within the law when they have reasonable reasons for justification of the policy, as in the above case.

It should be noted that employers can still fairly dismiss employees by adopting the proper process and having a fair reason, although under the Equality Act, dismissal cannot be on the grounds of any ‘protected characteristic’, including age.

If you require employment advice, including advice regarding the retirement or termination of the employment of employees, please don’t hesitate to get in touch.

By Victoria Mitchell, Employment Solicitor in Lancashire

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