Compulsory Retirement

In September 2016, age was added to the Discrimination (Jersey) Law 2013 as a protected characteristic, Whilst this amendment will have a significant impact in a number of areas for Jersey employers, one of the biggest changes relates to the retirement of employees. The Law allowed for a transitional period of two years during which employers can maintain a compulsory retirement age without considering the implications of age discrimination. This transitional period ends on 1st September 2018. So what are the implications of this for employers?

Fixed Retirement Age

If an employer wishes to continue to have a fixed retirement age, there is a risk of unfair dismissal claims from employees being automatically dismissed on reaching that age. In defence of such a claim, an employer must be able to show that:

• the compulsory retirement age was intended to meet a legitimate aim (it is “objectively justifiable”);
• having the particular retirement age meets that aim; and
• It is proportionate to use that retirement age as a means of meeting that aim.

The fixed retirement age will usually be at least States pensionable age (which is currently 65). A lower retirement age is only likely to be justified in exceptional circumstances.

Once it is established that the reason for dismissal was retirement, the question of whether the retirement was fair will be a matter for the Tribunal. A key factor will be whether the employer has adopted a fair procedure in the run up to the retirement.


When deciding whether a compulsory retirement age is proportionate, a tribunal is likely to consider:

• Whether a compulsory retirement age actually achieves the legitimate aim identified.
• Whether there is an alternative to a compulsory retirement age (for example, using fitness or competence tests rather than age as retirement criteria).
• Why the particular retirement age chosen by the employer is appropriate and necessary.
• Whether the employer applies a retirement age consistently. Deviations could undermine the assertion that the particular cut-off point chosen is necessary (although there is a counter-argument that blanket rules which take no account of individual circumstances are harder to justify).

Legitimate Aim

Legitimate aims can be summarised as promoting inter-generational fairness and ‘dignity’ and may include, for example;

• Economic factors such as business needs and efficiency

However, it may not be considered legitimate if the employer intends to retire the employee simply to save money on a large pension package or in an attempt to circumvent redundancy.

 Maintaining the health and safety of the individual and others

However, this is not a legitimate aim unless the employer can show evidence that most employees over age X would not be able to meet the requirements of the post and will need to be able to justify why regular competency testing is not a more proportionate means of dealing with performance issues, rather than retirement.

• Legal considerations

(ie. where an employee is legally prohibited from undertaking a certain job after reaching X age.)

• Promoting the recruitment and retention of younger employees
• Protecting against incompetence / ensuring a high quality of service

Fair Procedure

ACAS Guidance suggests that steps in a fair procedure include:

• Giving employees “adequate notice” of impending retirement

Acas do not specify what “adequate” notice might be. However, it would be good practice for employers to ensure that all employees are made aware of any fixed retirement age in place and to check that employees approaching that age are aware of the policy and its implications for them.

• If circumstances allow it, give consideration to any request by the employee to stay beyond the fixed retirement age

• Consider offering pre-retirement training to employees to help them prepare for both the financial and personal changes retirement will bring

• Discuss the option of flexible or part-time working in the lead up to retirement.

ACAS suggests “other possibilities may include job-sharing, changing roles, or getting staff to coach or mentor younger employees to pass on their expertise and improve continuity”.


Employers should be considering whether to continue with compulsory retirement ages, taking advice on the implications of not doing so (for example on any pension scheme), documenting their decision (in board minutes and the like) and notifying their employees of their decision and amending their various policies.

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