· Features

Ruling on retirement: 'a major disappointment for older workers and seriously flawed'

In a highly publicised ruling last month, the Supreme Court made it relatively straightforward for employers to adopt a compulsory retirement policy.

So long as the policy coincides with state social policy, and is executed 'proportionally, then it will defeat any claim of age discrimination. All of this is a bitter blow for campaigners such as Age UK, who hoped that last year's abolition of the default retirement age (which permitted compulsory retirement) signalled a right for older workers to retire when they chose.

But the judgment is seriously flawed, in at least three ways. First, the Court accepted the employer's three policy aims coincided with social policy. The aims in this case were:

'Job-blocking': This was 'ensuring associates were given the opportunity of partnership after a reasonable period'. More generally, it is argued to facilitate the recruitment of younger people and so help youth unemployment.

Workforce Planning: This was 'facilitating the planning of the partnership and workforce across individual departments by having a realistic long-term expectation as to when vacancies will arise'. A known 'attrition rate' can benefit a business in all sorts of ways by providing certainty.

The Court held these two aims - indelicately known as dead man's shoes - were legitimate as they coincided with the social policy of 'inter-generational fairness'.

'Dignity': The third aim was: 'limiting the need to expel partners by way of performance management, thus contributing to the congenial and supportive culture in the firm'. This 'retire with dignity' aim again was accepted as a legitimate aim.

The flaw in the ruling is that only one of these aims - Workforce Planning - coincides with state social policy. The Coalition Government has set itself dead against the other two aims, declaring the job-blocking theory a 'myth', and retirement in the absence of performance management to be undignified. In a curious piece of logic, the judgment stated that an employer's policy must coincide with state social policy, and then ignored state social policy. Instead, the Court alluded to several judgments of the EU Court of Justice. But these judgments were merely permissive, ruling in each case brought before it whether or not a particular policy was permissible under EU law.

This leads to the second criticism. The acceptance of such policies - especially dignity - is underpinned with a sense that job-performance declines with advancing age. This is a lazy stereotype unthinkable in other grounds of discrimination, such as race or gender. No court would condone a policy on the basis that 'blacks are lazy workers' or that 'woman are unreliable'. It is conceded that age is different in principle, but this ruling virtually destroys the protection for the most vulnerable (older) workers promised by the age discrimination legislation. It is a fundamental principle of discrimination law that each person should be treated on his or her merits.

Finally, the Court accepted that an employer need not have the state social policy in mind when adopting it retirement policy. This will prove problematic when a dismissed worker brings a parallel claim of unfair dismissal, where after the event reasons cannot be deployed by the employer. The whole point of the unfair dismissal regime is that the employer must have acted 'fairly' at the time of the dismissal.

Not only does this decision come as a major disappoint for those most in need of the age discrimination legislation (older workers), it is also seriously flawed. The Government should act to reassert its social policies by amending the legislation accordingly.

Michael Connolly, barrister and Lecturer in Law at Surrey Business School