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In response to a judgment handed down at the Supreme Court, which some are claiming may have left the door open for businesses to set their own retirement age for staff, the CIPD has warned employers to remember the business benefits of recruiting, retaining, engaging and motivating a diverse workforce and the value that an ageing workforce can contribute to business and the economy.
The case, viewed as one of the most significant for years on the issue of age discrimination, involves Mr. Leslie Seldon, a former senior civil litigation partner at Clarkson Wright and Jakes (CWJ). Despite the abolition of the default retirement age, the complex Supreme Court ruling found his dismissal upon turning 65 to be legitimate because, amongst other things, it allowed effective succession planning within the firm.
Dianah Worman, Diversity Adviser at CIPD, comments: “The main messages to be taken from today’s complex ruling are the difficulty of providing well evidenced reasons to justify the retention of a retirement age and the importance of good performance management to safely dismiss a person fairly on the basis of capability rather than their age. This is set out in good practice guidance published by Acas as well as the CIPD and the TUC to support the law. Since the removal of the Default Retirement Age came into force most businesses have dealt with the banning of compulsory retirement without skipping a beat, and there is significant evidence of good practice delivering real business benefits.
“Recent CIPD labour market analysis has made clear that the notion of there being a “lump” of older labour standing in the way of younger workers finding jobs is a fallacy. In many ways older workers are worse hit by the recession, as once they fall out of work, they find it much harder to get back into work than their younger counterparts. For business, labour market economics and societal reasons, employers should not interpret the Seldon judgement as an indication that maintaining a retirement age is an easy or desirable option. On the contrary, we believe it points to the legal complexities of stacking one up when challenged. Good performance management is the way forward and employers need to bite the bullet on this.”