Our Company has continued to use the retirement procedures because we consider that we require a normal retirement age. However, one of our employees has recently challenged a notice of retirement that we have issued. How do I handle it?

Sharon McArdle, Tughans Solicitors, Belfast writes:

The statutory retirement procedures which were introduced under the Employment Equality (Age) Regulations 2006, allowed employers to lawfully force an employee to retire at or over the age of 65 provided certain procedures were followed. However, the retirement procedures were abolished on 6 April 2011 together with the default retirement age and retirement as a potentially fair reason for dismissal. Dismissal on grounds of age now amounts to unlawful direct age discrimination unless the employer can objectively justify it or establish that it is an “occupational requirement”.

Some employers have continued to use the retirement procedures but it is important to understand that the procedures have been abolished and it is no longer appropriate to follow them. Existing policies and procedures should be reviewed to ensure that they comply with the current law.

The default retirement age has been abolished, but if the employer considers it necessary, it may choose a retirement age. The particular age chosen is not set down in legislation and is chosen by the employer. However, in order to fairly dismiss when an employee reaches that age, the employer must be able to show that it can objectively justify the retirement age. Otherwise an employee may be able to successfully sue the employer in relation to age discrimination.

In order to demonstrate that the imposition of a retirement age is objectively justified by the employer, it must show that:

• The fixed retirement age chosen is intended to meet a legitimate aim;
• The particular age chosen meets that aim;
• It is proportionate to use that retirement age as a means of meeting that aim.

It will be for the courts or Tribunal to decide whether the age chosen is in fact objectively justified. It will consider whether each limb of the above test has been met.

Examples of legitimate aims which have been upheld by the courts are as follows:

• Workforce planning
• Promoting the recruitment and retention of younger employees
• Contributing to a pleasant workplace and protecting the dignity of older workers by not requiring them to undergo performance management procedures as well as avoiding disputes with older workers over fitness to work
• Protecting against incompetence
• Ensuring high quality of service
• Having an age balanced workforce in order to promote the exchange of experience and innovation
• Avoiding adverse impact on pension and benefits i.e. increased cost of extending such benefits to older workers and standardisation of retirement ages across the public sector.

Therefore, the employer should look at the reasons why it believes the Company need a fixed retirement age, consider what aims are being pursued by fixing a retirement age and whether the particular age chosen meets that aim. It would assist in defending a challenge to the retirement age, if these reasons were recorded in a retirement policy. If the age chosen is lower than that at which the employee may obtain pension benefits then this will make it harder to justify the chosen fixed retirement age.

Note that in the event of a challenge, the employer may need to provide evidence to show a need for a fixed retirement age, for example, evidence of an unbalanced workforce.

If you decide that the employer does not have a legitimate aim you could consider abolishing a fixed retirement age within the Company. This would mean dealing with health or performance issues as they arise, as with any employee and if necessary dismissing on the grounds of the applicable fair reason for dismissal.