Following the Labor Party’s landslide victory in the UK general election, the party is expected to impose a retirement age of 80 on members of the House of Lords. The plan, which the party hopes will create a “more representative” body, will also end up gradually eliminating the remaining hereditary peers.
The proposals have sparked a wider debate about compulsory retirement in the UK, with some criticizing Cambridge University’s “employer justified retirement age” (EJRA) as age discriminatory. Currently, the university’s EJRA sets the retirement age for senior academics at 67.
However, others say it opens up crucial avenues for young people working in academia, while ensuring that new, important voices are heard alongside older, more experienced staff.
But is compulsory retirement legal? Will Labor’s plan encourage more companies to introduce similar rules? And what are the pros and cons for employees and employers?
“Keir Starmer’s announcement that House of Lords colleagues will be forced to retire when they reach the age of 80 may put the cat among the pigeons for employers in the UK who were under the impression that it is illegal to set an age of mandatory retirement at work,” says Andrew Willis, associate director of legal at the employment and HR law firm Croner.
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“The reality is that it is not automatically illegal to set a maximum age for employment, which means employers can set a retirement age,” he explains. “But there is a complicated legal test to pass first, because terminating someone’s employment just because of their age would be a violation of age discrimination laws.”
Therefore, to establish a mandatory retirement age, companies need to have a compelling reason to release positions currently held by older workers. They also have to ensure that there is no other less discriminatory way to do this than terminating their employment, or they risk getting into hot water legally.
“Another thing to remember is that any age limit can be legal, as long as the test is met, there is no need to go over state retirement age,” adds Willis.
Benefits of compulsory retirement
One of the main arguments in favor of mandatory reform is that it could allow younger workers to move up the career ladder.
More than three-quarters of younger workers want their employers to invest more in their learning and development so they can progress, according to a recent study. survey.
“In certain workplaces, a mandatory retirement age can help create career space, and in that sense it could very well help younger workers,” says Willis.
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“The main advantage for employers is that this can make it easier for them to offer a career path to their employees and allow for effective and efficient succession planning. It also helps both employer and employee avoid having to manage older workers based on their capabilities on a case-by-case basis.”
Some suggest that mandatory reform is financially beneficial for companies, in part due to increased productivity among younger workers. However, with very few employers actually implementing this strategy, there is little data to support this theory.
Disadvantages of compulsory retirement
Older workers also bring a wealth of experience that younger workers can benefit from, so it’s about finding the right balance.
Some argue that imposing a retirement age is age discrimination, especially at a time when attitudes in relation to older workers, it got worse in some areas.
“Career advancement opportunities are vital to securing the future of the workplace, as is creating a workplace where everyone’s voices are heard and ideas are valued, regardless of age,” says Willis.
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Soma Ghoshcareer coach, adds: “It doesn’t allow flexibility to retire whenever someone wants and having it made mandatory means the choice is eliminated.”
Additionally, some older workers may struggle with the requirement that they retire at a certain age. More and more people are choosing to work beyond retirement age, either because they do not feel prepared to stop working or because they cannot afford not to work. Almost half of working adults in the UK (46%) believe they will continue to work after reaching state pension age, according to a study. survey of 2,000 people by Parceria Popular, a pension provider.
It can also be challenging for companies to implement a mandatory retirement age. “The main difficulty is that the compulsory retirement age is, on its face, discriminatory – although a claim can be successfully defended,” says Willis.
“The employer must be able to demonstrate that having a mandatory retirement age is intended to fulfill a legitimate purpose – a real business need.”
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