Retiring remains risky

Published: 15th July 2008

Following the reasoning of the Court of Appeal circulated this week, there remains a risk of a successful unfair dismissal and age discrimination claim where an employee is retired, even if the full statutory retirement process is followed.

In the case of Johns v Solent, the employee had been retired in a way which complied with the statutory retirement procedures. Solent argued that the claim for unfair dismissal and age discrimination should be stuck out. Mrs Johns relied upon the Heyday case, in which we are waiting for the decision of the European Court of Justice, one outcome of which could be that the whole retirement process is found to be age discrimination. The CA have confirmed that her claim, and the many like it, must be stayed by the Tribunal. In practice what this means is that if Heyday decides the UK retirement process is not justified age discrimination, Mrs Johns will win her claims.

This leaves employers with unhelpful uncertainty. If they follow the full retirement process and retire employees aged (usually) 65 or more, under the law as it stands it is not unfair dismissal or age discrimination. But the employees can bring a tribunal claim alleging this and that claim will be stayed. The risk is that if Heyday is decided the wrong way, the employer will be left unable to defend the claims and will have discriminated and unfairly dismissed the employee. On balance we don't expect the Heyday claim to succeed and pragmatic employers may wish to continue using the retirement process, but there is a risk that a claim may follow and (ultimately) that claim may succeed. The risk averse approach is not to retire employees at all until we know the outcome of Heyday.

If you would like to discuss the potential impact of this decision on your organisation, any situations currently faced by you, or your approach to retirement, please speak to your usual contact in the Mace & Jones employment and HR team.