Employer Justified Retirement Age

A recent landmark case has highlighted the importance of employers having an EJRA (Employer Justified Retirement Age) policy in force if they wish to retain a mandatory retirement age.

EJRA’s were introduced in 2011, after the default retirement age of 65 was axed by the Government.  Now, unless an employer can justify a compulsory retirement age, it has to forget the concept of automatic “retirement” and instead consider the termination of employment of anyone aged 65 or over in exactly the same way as any other employee.

Employers that wish to continue implementing a compulsory retirement age must be able to justify it with strong evidence of the legitimate business aims.  However, it is unlikely that a blanket retirement age across a whole organisation for every type of role could be justified.

ACAS advise that an employer can set a retirement age if it can legally prove the need. This means proving the retirement age is ‘a proportionate means of achieving a legitimate aim’, e.g.:

  • the organisation’s business need, and,
  • the wider needs of society in some way – for example, this might be by giving young people the chance of employment or creating a workforce with a mix of age groups.

Personnel Today recently reported that a former Oxford University academic who was forced to retire at 67, lost his claim for unfair dismissal and age discrimination.  The Tribunal judge found that the Universities EJRA policy had a social aim to improve career progression and diversity, and was therefore legitimate.

The University say that the policy was created in order “to sustain excellent teaching, research and administration and to maintain and develop its historical position as a world-class university”.  They also say that their policy hoped to “promote inter-generational fairness and maintain opportunities for career progression for those at particular stages of their career”.

Previously only employers in active industries, where physical fitness is directly linked to job capability (e.g. the construction industry), or where the job has an age limit by law (e.g. the fire service), admitted to retaining a forced retirement age.

If you need advice on how to ensure you are following a fair retirement process, then please contact one of our Advisors.

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