Can employers operate a compulsory retirement age?

Since 1 October 2012, as a result of the repeal of the retirement age provisions in the Equality Act 2010, there is no "default" retirement age and "retirement" is not a potentially fair reason for dismissal. Guidance from the Equality and Human Rights Commission on managing retirement says that the effect of the removal of the default retirement age is that "in most cases workers can retire when they are ready, rather than when their employer decides". However, individual employers can operate a compulsory retirement age, provided that they can objectively justify it.

To justify a compulsory retirement age, the employer must be able to show that it is a proportionate means of achieving a legitimate aim. If a retirement age cannot be justified, it will be unlawful direct age discrimination.

If the retirement age is objectively justified, the dismissal of an employee because they have reached that age will be deemed to be for "some other substantial reason" under s.98 of the Employment Rights Act 1996. The employer must also follow a fair procedure and the ordinary unfair dismissal principles will apply.