Pastures new

Berrymans Lace Mawer LLP London head of employment Andrew McDonald sets the legislative scene on the end of the default retirement age in an article published in RIBA Journal, the official publication of the Royal Institute of British Architects.

Real lives

Since 6 April this year the ability of employers to retire their workers at 65 has been severely curtailed. While government statistics show that only 32% of employers were using a default retirement age (covering 45% of the national workforce), workers previously subject to enforced retirement will welcome the opportunity to work on until a time of their choosing. But managing the change could cause difficulties for firms and their employees alike.

To keep open opportunities for younger workers, architecture firms may wish to continue with an enforced retirement system at 65. The new regulations retain an avenue for this, the 'employer justified retirement age' (EJRA), although firms must prove that enforcing an EJRA is a proportionate response to a legitimate aim. However, it is clear is that the courts will only countenance EJRAs in exceptional cases - for example, under the previous regime air traffic controllers justified an EJRA of below 65 on the basis of a legitimate requirement for exceptional and sustained mental alertness. In this context it appears unlikely that architectural firms will be able to justify EJRAs for their general workforce. Architecture is known for 'old masters', such as Frank Lloyd Wright and IM Pei, who carried on designing into their nineties. But architects might be able to justify EJRAs for a few workers in technical roles which require exceptionally sustained mental alertness.

Practices must also ensure they manage their relationships with older employees without falling foul of age discrimination laws enshrined in the Equality Act 2010. Informal discussions with older workers about when they intend to retire can help succession planning. However, no-one is obliged to retire when they have told their employer they intend to; and a dismissal in such circumstances would be ruled unfair by an employment tribunal. Employers must also avoid saying anything suggesting age discrimination in any discussion or interview. For example, telling an employee they are 'too long in the tooth' and should retire to avoid an undignified sacking, would be grounds for a discrimination claim. Anyone managing older workers should read Retirement process and the removal of the Default Retirement Age, published on the ACAS website, which explains how to approach discussions about retirement and work capability.

There is another problem: employers cannot discriminate between older and younger workers on the basis of capability. If a worker's productivity declines after 60, an employer who sets them less challenging performance targets will be open to discrimination claims by younger workers. This will undoubtedly be a minefield for employers, but should not result in older workers being let go of on capability grounds just because they are less productive than a 30-45 year old, provided their treatment is fair. To cover themselves firms could introduce performance incentive structures that allow younger but more productive employees to earn more (other things being equal) than older ones doing the same work.

The demise of the Default Retirement Age and the effect of the Equality Act 2010 will therefore probably require a culture change in some firms. For some architects this might increase the likelihood that earnings come down towards the end of their career.

Andrew McDonald is head of the London employment team at national law firm Berrymans Lace Mawer LLP.

The article is not a substitute for specific legal advice and should not be relied upon as such.