Can an employer compulsorily retire an underperforming older worker?

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Published on LexisPSL on 06/03/2017

The following Employment Q&A provides comprehensive and up to date legal information covering:

  • Can an employer compulsorily retire an underperforming older worker?
  • Employer justified retirement age
  • Early retirement
  • Dismissal
  • Poor performance
  • Sickness
  • Other protected characteristics
  • Workplace discussions
  • Flexible or phased retirement
  • Retirement policy

Can an employer compulsorily retire an underperforming older worker?

Since the abolition of the default retirement age and the repeal of the statutory retirement provisions in 2011:

  1. compulsory retirement is prima facie direct age discrimination under section 13(1) of the Equality Act 2010 (EqA 2010), and

  2. retirement is no longer a potentially fair reason for dismissal of an employee

Forcing an employee to retire will therefore risk a possible age discrimination claim and an unfair dismissal claim. If the primary aim is to avoid such risks, the employer will have to wait for the employee to voluntarily retire at the time the employee chooses to do so.

For further information on the employment law issues relating to retirement generally, see Practice Note: Retirement.

Employer justified retirement age

Retirement of the underperforming employee is, however, possible if the employer has an employer justified retirement age (EJRA).

Age discrimination is unique. Unlike other forms of direct discrimination under EqA 2010, direct age discrimination can be objectively justified, under EqA 2010, s 13(2).

An employer can therefore lawfully retire an employee provided the retirement age set can be objectively justified, ie shown to be a proportionate (ie appropriate and reasonably necessary) response to a legitimate aim.

This objective justification test is a difficult one to pass. Even if having a set retirement age can be shown to be proportionate, the selected retirement age itself must

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