On 6th April 2011, the Employment Equality (Repeal of Retirement Age Provisions) Regulations will come into force.
What does this mean?
This means the Government will begin phasing out the default retirement age (“DRA”) of 65. The DRA will be abolished from 1st October 2011. Consequently, an employer will only be able to prescribe a compulsory retirement age if it can show it is a proportionate means of achieving a legitimate aim.
From 6th April 2011, employers will no longer be able to issue notifications of retirement to employees.
However, 6 or 12 month retirement notices provided by employers on or before 5th April 2011 will continue to completion as long as:
- the current DRA procedure in the 2006 Regulations is followed. This involves giving the employee correct notice and the employer considering any request by the employee to continue working past retirement age and
- the retiring employee reaches 65 or the normal retirement age (if higher than 65) by the 30th September 2011.
What should employers do?
It will certainly assist to read the new ACAS Guidance on the changes. Employers may also want to consider issuing any retirement notices by the 5th April 2011 but should also be mindful that the employee must have reached the age of 65 by 30th September 2011. Finally, it may be appropriate to amend any retirement provisions contained within employment contracts.
Employers risk a claim of age discrimination if they attempt to retire an employee who only reaches retirement age after the 30th September 2011. In this instance, an employer would have to rely on the grounds of capability or conduct or “some other substantial reason” to dismiss an employee fairly. The possibilities of age discrimination claims are likely to increase given the recent publicity and growing awareness of the changes.
In the next few months the Supreme Court will be hearing an appeal in the “forced retirement” case of Seldon v Clarkson, Wright & Jakes which should provide guidelines as to when compulsory retirement will be justifiable as a “proportionate means to achieve a legitimate aim”.