It can be discriminatory to require an employee to retire when they reach a certain age, unless a retirement policy has a legitimate and fair aim. Andrew Sugarman looks at what the tribunals have found in the recent cases challenging Oxford University’s ‘Employer Justified Retirement Age’.
Forcing employees to retire at a particular age, whether under an absolute policy or one that permits exceptions, is direct age discrimination. However, unlike other forms of direct discrimination, direct age discrimination can be justified under section 13 of the Equality Act 2010 if the employer can show it is a proportionate means of achieving legitimate aims.
That sounds very much like the test for justifying indirect discrimination. However, the justification provisions for direct age discrimination are are narrower, said the Supreme Court in the case of Seldon v Clarkson Wright & Jakes. In her judgment, Baroness Hale said aims are only legitimate if they relate to social policy objectives and are n the public interest. They must be distinguishable from reasons which simply benefit an employer, for example cost reduction or increased commercial competitiveness.
But how easy is it to justify that a policy could achieve these legitimate aims? Case law, and instinct, suggests it ought to be difficult.
The burden is on the employer to establish justification, and the the measure must correspond to a “real need”; be “appropriate” to achieve the aim; and also it must be “reasonably necessary”.
Balance must be struck between the discriminatory effect of the measure and the needs of the undertaking – the more serious the adverse impact, the more cogent must be the justification for it.
Finally, there is no range of reasonable responses test – the employment tribunal must critically evaluate the facts to determine justification.
Oxford University’s policy
How easy is it for an employer to know whether a compulsory retirement scheme it has designed is justified or not? Well, two cases heard together recently in the Employment Appeal Tribunal suggest it is not easy at all. In Ewart v Oxford University and Pitcher v Oxford University, two different employment tribunals came to two different decisions on Oxford University’s so called “Employer Justified Retirement Age” (EJRA).
Oxford, unlike all other universities aside from Cambridge, elected to retain a compulsory retirement age in 2011 when the exemptions to the Equality Act 2010 that had existed for compulsory retirement were removed. It relied on a number of legitimate aims, which included some fairly standard ones, namely:
- intergenerational fairness: providing opportunities to the younger generation that might not exist if the older generation are allowed to stay as long as they wish
- succession planning: compulsory retirement provides a degree of certainty
- improving equality and diversity: the younger generation is more diverse than the older, so compulsory retirement of the older generation provides an opportunity (though no more) to improve diversity.
Professor Pitcher, a Shakespearean scholar who was forced to retire, lost his case. The Pitcher tribunal found the university’s aims were legitimate and the policy was justified. Although there was limited evidence demonstrating that the policy was effective in achieving the university’s aims – which boiled down to improving the diversity of its workforce – the tribunal concluded it ought to be slow to look for such evidence where the scheme had “not had time to take effect”.
Professor Ewart, a professor of atomic and laser physics, did not agree. The Ewart tribunal had the benefit of the reasoning in Pitcher when it deliberated. It also had the benefit of different evidence, including a statistical analysis about the effect of the EJRA on the vacancy creation rate, as well as evidence about diversity trends at other Russell Group universities who had no such schemes. Professor Ewart’s case was that the EJRA was flawed: it was only improving the vacancy creation rate by something in the order, at best, of 2-4% yet at great cost to those forced out of their jobs at a time not of their choosing.
The impact of the EJRA on the vacancy creation rate was important because it was the university’s case that the legitimate aims it relied upon were achieved through the creation of more frequent vacancies. That is is likely to be the same in most compulsory retirement cases as most aims will be tied to the creation of vacancies.
Despite the finding in Pitcher, the tribunal agreed with Professor Ewart’s arguments, finding that there was no evidence the EJRA was having anything other than a “trivial” impact on the vacancy creation rate, an impact which could not outweigh the heavy discriminatory impact of the policy. There was no cogent evidence the policy was achieving its aims in a proportionate way, nor was it obvious that it was likely to do so. Therefore, Oxford had not justified the policy.
There is much helpful analysis of the case law relevant to compulsory retirement schemes in the EAT’s judgment that employers will no doubt wish to consider when constructing or analysing schemes of their own.”
The Employment Appeal Tribunal resisted the temptation to square the inconsistent results. Instead, it dismissed both appeals, finding that each tribunal had been entitled to come to the decision it did on the evidence and submissions it heard. The EAT said that it is possible for different tribunals to reach different conclusions when considering the same measure adopted by the same employer in respect of the same aims, even where the evidence adduced is the same. That will no doubt be a concern for employers who therefore cannot safely conclude a policy is justified just because an employment tribunal has said it is in the past.
On the facts of Ewart and Pitcher though, the EAT thought there were material differences between the evidence and argument presented in the two cases, primarily:
- the statistical analysis used in Ewart about the extent to which the EJRA impacted vacancy creation, which was not available in Pitcher.
- in respect of the evidence about the detriment suffered by those to whom the EJRA applied. Though both could continue in an Emeritus capacity, the impact on Professor Ewart, as a research scientist dependent on a project team and facilities, was greater than the impact on Professor Pitcher. This led to a different focus on the question of detriment.
It is perhaps a shame the two cases were not heard together at first instance. That said, there is much helpful analysis of the case law relevant to compulsory retirement schemes in the EAT’s judgment that employers will no doubt wish to consider when constructing or analysing schemes of their own.
It is clear, for example, that employers will not only need to think very carefully about adopting such schemes but will need be in a position to provide evidence that their schemes are achieving or likely to achieve their aims. This will normally require an analysis of the extent to which the policy is causing vacancies to be created more regularly (after all, we all stop working at some point).
What Oxford will do about its policy remains to be seen. Another round of challenges looms on the horizon but for now, legal certainty does not.