Age discrimination legislation allows that an employer will not have discriminated against an employee by dismissing them for retirement at or over the age of 65. Providing the retirement procedure set out in legislation is followed then such a dismissal will be deemed fair. Where an employee is retired before reaching age 65, the lower retirement age must be objectively justified to avoid an age discrimination claim.

There has now been a recent Tribunal case where the Employer following the statutory retirement process and retired an employee the day before his 65th birthday, as that was their practice. The employee took them to Tribunal claiming that his dismissal was both unfair and discriminatory on grounds of age.

Unbelievably the Employment Tribunal decided that his dismissal was unfair and that he had been subject to unlawful age discrimination because his employment contract made quite clear that his retirement age was below age 65 (i.e. 64 and 364 days). As such, the default retirement provisions of the age legislation permitting retirement at or over age 65 did not apply. The Employer was unable to objectively justify the lower retirement age of one day even though they had a genuine belief that the retirement age which applied to the employee was 65 and they had followed the retirement procedure set out in the age legislation. When assessing compensation the Tribunal took no account of the fact that the Employer had acted mistakenly rather than having deliberately flouted the law and they awarded compensation of more than £36,000 which included £7,500 for injury to feelings and 50% uplift to the compensatory award to reflect the employer's failure to follow the statutory dismissal procedure. This decision provides a salutary lesson for employers and demonstrates the unforgiving nature of employment tribunal proceedings.

If it is common practice in your organisation for a retiring employee's last working day to be one or two days before they actually reach their 65th birthday you must now ensure that, whatever their last working day happens to be, their employment does not actually and officially end until the day on which the employee becomes 65.

You may recall that I inserted in your Handbook a section on the Retirement Procedure and in the first paragraph of the policy I have referred to the retirement date for employees being their 65th birthday or the Friday before. I have now amended the wording (highlighted in yellow) to that paragraph as follows;

The normal age of retirement from the Company’s service for male and female employees is 65 years. The retirement date will be the actual date on which your retirement age is reached even if the retirement date falls on a day you do not normally work.

Please will you make this amendment immediately to your Handbook, or at the very least inform managers and payroll that if you have any retiring employees coming up to 65 that their last day of employment should be classed as the actual date of their birthday, even if their last working day is earlier such as the Friday before.