The Government has now published the draft regulations that will phase out the default retirement age of 65 from 6 April 2011 and they provide a few traps for the unwary.
As addressed in last month's briefing, transitional measures will be in place from April 2011 until 30 September 2011. It was previously understood that providing an employer had given an employee notice of compulsory retirement prior to 6 April 2011, a lawful, compulsory retirement on the grounds of age could take place up until 30 September 2011.
However, as currently drafted, the regulations appear to provide that such compulsory retirements will only be lawful where notice is given by the employer before 6 April 2011 and where the employee will attain the relevant age limit (which will usually be 65) between 6 April and 30 September 2011. This would appear to mean that employers will not be able to compulsorily retire employees who have already reached the age of 65 before 6 April 2011 and any attempt to do so could result in claims of unfair dismissal and age discrimination.
The draft regulations were only published on 17 February and therefore it is possible that this apparent error will be corrected before the provisions are implemented in April. We will keep you posted.
The draft regulations also confirm that, whilst the default retirement age will be phased out, it will remain lawful for employers to stop providing access to insurance or other related financial services to employees when they attain whichever is the greater of the age of 65 or the state pensionable age.
However, such a step will only be permitted where the relevant insurance is provided in pursuance of an agreement between the employer and a third party or where the employer's business involves the provision of that particular insurance/other financial services.