The Government has now confirmed that it will begin to phase out the default retirement age from 6 April 2011, as announced last July. It has resisted calls from the CBI to hold off these changes for a further year to allow business more time to adapt.

The retirement exemption will cease to apply for retirements taking effect on or after 1 October 2011. The statutory retirement procedures will also be withdrawn and the last date on which an employer can give at least six months' notice under those procedures will be 30 March. Retirement will also be removed from the list of potentially fair reasons for dismissal set out in the unfair dismissal legislation. Employers who choose to retain compulsory retirement ages beyond October 2011 will need to be able to show that they are objectively justified and that is unlikely to be easy.

Employers who have not already done so will need to consider whether they will attempt to justify compulsory retirement going forward or whether they will remove retirement ages and review their approach to workforce planning and performance management. ACAS has published helpful guidance for employers on working without the default retirement age.