Justifying Compulsory Retirement – Academics v Oxford University: Round 3

In September 2021, Eady J in the EAT upheld two employment tribunal decisions that had reached opposite conclusions on the lawfulness of Oxford University’s compulsory retirement policy: Pitcher v Oxford University, which Oxford won, and the slightly later case of Ewart v Oxford University, which it lost: [2022] ICR 338.

Compulsory retirement is an act of direct age discrimination and the issue in such cases is whether an employer, the burden being upon it, can justify it by reference to legitimate aims which must, according to the Supreme Court in Seldon v Clarkson, Wright & Jakes [2012] ICR 716, be of a social policy nature. The two tribunals had reached different conclusions on whether the compulsory retirement scheme was a proportionate means of achieving a number of legitimate aims.

Rather than abandon the policy or appeal to the Court of Appeal, Oxford retained the so-called Employer Justified Retirement Age (“EJRA”) policy, tweaked it in a number of ways (e.g. reduced its scope, increased the retirement age from 67 to 68) and went about gathering further  evidence to support it, some of which was seemingly designed to meet the criticisms articulated by the Ewart Tribunal.

Unsurprisingly, a further challenge to the policy made its way to the employment tribunal in Field-Johnson and others v Oxford University Case No3301882/2020 and others. Three of the claimants were academics, one was a senior administrator. By the time of the hearing, Oxford had a carried out a detailed 10-year review of the policy which had been introduced in 2011.

The creation of vacancies is generally at the heart of compulsory retirement policies.  It is through the creation of additional vacancies that social policy aims, such as increasing diversity or furthering intergenerational fairness, commonly relied upon aims, can be pursued. The key finding in Ewart though was that the University had not shown that compulsory retirement had anything other than a trivial impact on the vacancy creation rate.

Most vacancies arose for other reasons, many chose to retire at or before EJRA age in any event and of those that would stay, evidence suggested they would only stay for a limited period. The result was that the vast majority of vacancies would likely exist in any event, meaning the discriminatory EJRA was having only a very modest contribution, at best, on the achievement of Oxford’s aims.

In Field-Johnson, Oxford argued that the new evidence it adduced ought to lead to a different conclusion. It relied on Little’s Law of Queueing – which had been applied in the US in similar circumstances -  to model the rate at which vacancies were likely to arise as a result of different (and no) retirement ages, as well as its own analysis of the impact of the policy year on year.

It contended this showed the EJRA significantly enhanced the number of vacancies, giving it the opportunity to use those vacancies to make progress towards achieving its aims, such as increasing diversity, creating opportunities for the next generation and helping it with succession planning.

It also led evidence designed to show that the discriminatory impact of the policy was not as significant as it might appear, as retirement was cushioned both by generous pension provision (more generous than the current generation will receive, a point relevant to intergenerational fairness) and the ability of academics to stay on in an emeritus capacity post retirement.

The Tribunal however concluded, as it had in Ewart, that the University had not justified the policy: it was not a proportionate means of achieving legitimate aims. The University has since conceded the claims of direct age discrimination arising out of the enforced retirements.

By the time of the hearing, the University had already decided to remove administrators, such as Mr Field-Johnson, from the scope of the EJRA because there was insufficient evidence it was efficacious. His task was therefore a little easier. The policy remained in place for various academic grades however, two of the three academic claimants were statutory professors (the highest academic grade) and one was a reader.

The Tribunal concluded that the modelling relied upon by Oxford rested on questionable assumptions and  showed at best that only up to 8% of vacancies at the statutory professor grade were attributable to the EJRA, though the figure was likely to be lower than that. The figure was even lower for the grades below statutory professor. These figures were said to be “small”.

On the other side of the scales, the Tribunal concluded the qualitative discriminatory impact of the policy was great. This was so even though retired academics could often stay on and continue making use of some of the University’s facilities and take part in  aspects of college life. Further,  the fact the policy may only have a small quantitative effect did not prevent a finding that the EJRA caused a significant and substantial discriminatory impact.

Overall, it was not satisfied the EJRA was reasonably necessary for Oxford to achieve its aims. It was having a “trivial” impact and that impact was outweighed by its highly discriminative effect.  

In reaching those conclusions, the judgment contains much that may be helpful to other employers considering introducing or retaining compulsory retirement schemes:

• The fact the burden falls on an employer to justify such a policy is critical. That cannot be done by assertion or guesswork, cogent evidence will be needed. Where a policy has been operated for some time, an employer ought to be monitoring it, collecting data and periodically reviewing it. Justification is an on-going process;

• The Tribunal was critical of Oxford for failing to keep contemporaneous records to evidence the effect of the EJRA. It could have done so by eliciting information in exit interviews to determine why people were leaving when they did and when they might otherwise have left if their departure was EJRA related. Instead, it had to rely on surveys after the event of those that had already retired and could be bothered to respond. These surveys were unreliable because the samples were small and self-selecting. The Tribunal concluded that the mathematical analysis Oxford had adopted could only ever be second best to information elicited in exit interviews;

• Oxford had relied on diversity data to illustrate the positive progress it had made. However, its case on this was significantly weakened by any lack of reliable statistics relating to protected characteristics other than sex. In any event, the Claimants’ case was that progress towards improving gender diversity was slow and did not compare favourably with progress at other Russell Group universities, none of which operated compulsory retirement schemes;

• The Tribunal held that Oxford had not properly considered alternatives to the EJRA, dismissing options that had been canvassed too readily and without proper reasoning. This was despite the fact its 10-year Review Group had devoted time in a number of meetings specifically to considering alternatives having received oral and written evidence, which is likely to be more than many employers manage. This perhaps illustrates the difficulties employers have in meeting the test for justification, given the burden is on them and the test involves a consideration of whether aims could be achieved via less discriminatory means.

• The Tribunal did not think that Oxford could rely on its own convoluted internal procedures to justify what would otherwise be direct age discrimination: a warning to employers thinking of arguing that their internal recruitment processes contribute to the difficulty of securing replacements timeously where vacancies arise with limited notice.

Whether Oxford will now abandon the policy or retain it and wait for the next challenge, in the hope that a different tribunal will reach a different decision, remains to be seen. That is clearly a possibility in light of the EAT’s conclusion in Pitcher and Ewart that there is no legally correct answer to the question of justification in all cases, it is a matter for a tribunal based on the evidence it hears. That sits uneasily with legal certainty. For the time being, the policy remains in place and each year, a new tranche of academics are forced to retire, some before they would wish to do so. Unless the policy is abandoned, “Round 4” seems inevitable.

These series of judgments do not mean compulsory retirement can never be justified. It will depend on the evidence adduced by the particular employer in the particular sector in which they operate. Oxford is a large, somewhat unique, employer and the position may be very different for a small employer with scarce opportunities available for promotion. The Ewart and Field-Johnson judgments do however illustrate the difficulties of justifying such schemes and the lengths to which an employer is likely to have to go in order to do so.

Andrew Sugarman represented the academic claimants in Field-Johnson, and Professor Ewart in the ET and EAT in Pitcher and Ewart.