UK: Age Discrimination - Over A Year After The Abolition Of The Default Retirement Age

Last Updated: 27 July 2012
Article by Ben Smith

In April 2011, the Government abolished the default retirement age ("DRA"). As a result (subject to various transitional provisions), it is now unlawful for employers automatically to terminate an employee's employment on their 65th birthday – unless it can be objectively justified.

As there is no upper limit on the amount of compensation that an employee can claim in relation to age discrimination, it is essential that employers address age related issues sensitively. Over a year after this change, what steps can employers take in relation to older employees without falling foul of age discrimination?

Retaining a normal retirement age ("NRA")

Under the Equality Act 2010, employers are able to retain a NRA provided that they can justify such action as a proportionate means of achieving a legitimate business aim. In order to ensure that moving to terminate an individual's employment at a specific age is not discriminatory, an employer would need to complete a detailed assessment to demonstrate the need for a NRA.

Careful consideration should be given to the age selected as 65 is no longer an accepted "default" age; therefore it may be more appropriate (and less discriminatory) to retain a NRA of 68, or 70 or more, rather than 65.

Employers should document and retain their analysis for the impact of retirement and show that they have carefully considered what age is appropriate and why. For example, it would be sensible to consider different areas of the workforce in light of their skills, the job requirements, health and safety considerations and career planning issues rather than simply enforcing a blanket age on everyone without considering the different factors. In addition, employers must carry out a balancing exercise to weigh up the discriminatory effect of the NRA against the benefits achieved for the business. Importantly, employers must be certain that there are no alternative, less discriminatory measures are open to them as a means of achieving the same business aim.

There are a number of aims which have been considered as potentially justifiable, including workforce planning, promoting the recruitment and retention of younger employees and protecting the dignity of older workers by not requiring them to undergo performance management procedures. However, the recent decision of the Supreme Court in Seldon v Clarkson Wright and Jakes [2012] UKSC 16 has highlighted the practical difficulties facing employers who wish to retain a NRA. The Supreme Court held that, to justify direct age discrimination, employers must themselves identify a "social policy aim" and not just a "real business need". It is therefore now thought to be very difficult for employers to prove that there are no less discriminatory ways to meet such business aims and that there is a social policy element to their decision to retain a NRA.

Managing employees without a NRA

So, what can a School do in the likely event that it decides it cannot justify having a NRA? The starting position is that employees should be permitted to work until they decide to leave. As with any employee, any dismissal of an older employee will need to be for one of the five potentially fair reasons (conduct, capability, illegality, redundancy or "some other substantial reason") and a fair procedure must be followed. Many employers are concerned that an employee's performance may decline with age. However, issues with the performance of older employees should be dealt with in the usual way under the employer's capability/performance management procedure. If a School has a robust procedure in place, which is fairly and consistently applied to employees, any resulting dismissal on the grounds of capability is more likely to be deemed fair. However, whilst employers should be keen to avoid discrimination because of an employee's age, issues concerning any potential disability discrimination (which can frequently arise in capability/performance management situations) should not be overlooked.

ACAS guidance

ACAS has produced some guidance for employers, Working without the default retirement age, which assists with employing (and dismissing) older workers, and focuses on how to handle workplace discussions when seeking to establish workers' future plans, or where there may be performance issues. The guidance states the following:

  • Workplace discussions should be built into the appraisal system for all employees and should be conducted at least annually. This will also help the employer to identify any training or development needs or any requirement for reasonable adjustments to be made.
  • Establish reasons for poor performance. Avoid falling into the stereotype that poor performance is more likely to be associated with older workers.
  • Avoid asking questions which could be seen as discriminatory, such as indicating that the employee is preventing younger workers form progressing. Ask all employees open questions about their future plans for the short, medium and long term.
  • Address poor performance consistently for employees of all ages.
  • Older employees can still voluntarily retire at a time of their choice and draw any occupational pension they are entitled to, in accordance with the scheme rules.


Schools which have not already done so need to decide whether to have a retirement age. If a retirement age is maintained, Schools will need to ensure that they can justify it in the event that it is challenged as age discriminatory – which will not be straightforward.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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