The Default Retirement Age ("DRA") was abolished with effect from 6 April 2011 (subject to transitional provisions for employees who have been notified of the intended retirement before 6 April 2011). Any dismissal because of age taking place on or after 6 April 2011 will constitute direct age discrimination under the Equality Act 2010 (EqA 2010), unless it falls within the transitional provisions. This means that dismissing employees for reasons related to age now has to be justified.
Retirement is no longer a fair statutory reason for dismissal; employers will have to show that the dismissal of an older worker is fair for one of the five potentially fair reasons and that a fair procedure was followed. The reason, where a retirement age is objectively justified, might typically be "some other substantial reason". Whilst employers may also seek to rely on "capability" as a fair reason for dismissal, it is, in reality, often difficult to demonstrate that an employee is no longer capable of carrying out their job.
Employers can no longer regard 65 as the "safe" age at which to retire employees but will instead have to show objective justification for dismissing at this or indeed any set age for retirement. Whether employers actually keep fixed retirement ages or decide when to retire people on a case by case basis, they will have to justify the decision to retire. This will entail identifying a legitimate aim being pursued and showing that the means used to pursue it are proportionate. Case law on retirement of non-employees will be a useful guideline, as will guidance from European Court of Justice cases on legitimate aims and proportionality. Employees who previously could not bring discrimination claims in relation to retirements at 65 or over will now be able to do so.
While those aged 65 and over have been able to bring unfair dismissal claims since October 2006, the impact of this has not been fully felt since those who were retired at the DRA, using the correct procedure, could not claim that the dismissal was unfair or discriminatory. With the abolition of the DRA this will change and claims for direct or indirect age discrimination and unfair dismissal are likely to increase.