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It will still be possible for employers to have a compulsory retirement age if it can be objectively justified.  Examples given by BIS (Department for Business, Innovation and Skills) are air traffic controllers and police officers as possible professions where having a retirement age could be justifiable.  These are called employer justified retirement ages (EJRA's).

To have a compulsory retirement age an employer will have to show that it has a 'legitimate aim' and that the retirement is a 'proportionate means of achieving that aim.'

The definition of a 'legitimate aim' is:

• relating to health and safety
• relating to the training requirement of the job
• relating to the needs and efficiency of the business

A cost saving alone would not be a 'legitimate aim.'  For example that an older worker has a higher salary than a younger worker and therefore there is a saving to the business if the older worker leaves.

The definition of 'a proportionate means of achieving that aim' is:

• the actions of the employer are fulfilling an aim that the employer has defined
• the actions are required because there is no reasonable alternative to achieving that aim
• the benefits and importance of the 'legitimate aim' significantly outweigh any discriminating effect.

If an employer does want to retire an individual it will have to follow a fair procedure under existing dismissal rules and for the dismissal to be fair there will have to be a potentially fair reason.  These are set out in the Employment Rights Act 1996 and are capability, conduct, redundancy, statutory ban and some other substantial reason.