Followers of my blog will know that the Government's attempts to abolish the Default Retirement Age have not gone smoothly, with fundamental errors being found in the initial draft regulations to implement the changes. The Government have now published revised draft regulations which address the previous concerns and also add a few extra complexities. So to summarise the proposals, the key remains whether the employee has reached 65 (or the normal retirement age for the employer, if higher) on or before 30 September 2011.
To consider the various scenarios:-
- If an employee has reached the normal retirement age on or before 5 April 2011 and the proper process (involving timely notice and meetings if required) has been followed: retirement can progress as planned. The law provides the employer with protections against claims for unfair dismissal and/or age discrimination.
- If an employee will reach the normal retirement age on or before 30 September 2011 and the proper process has been followed: retirement can progress as planned. The law provides the employer with protections against claims for unfair dismissal and/or age discrimination.
- If an employee will reach the normal retirement age on or before 30 September 2011 but the proper process has not started: start the process as soon as possible if you want to benefit from the current law. To use the current protections, an employer must start the process on or before 5 April 2011. When an employer starts the process, they require to give the employee between 6 and 12 months' notice of the intended redundancy date. So theoretically, a notice given on 5 April 2011 could be for an intended retirement date of up to 4 April 2012. Employees have the right to ask for that intended date to be extended and an employer can agree to this. Provided this agreed extension is less than 6 months (from the original intended date) then the whole notice process does not need to be started again. The effect of this is that under the transitional provisions and assuming the notices are all given as late as possible for the longest period possible, you could still have an employees retiring under the current law on 3 October 2012. For the long running effect of transitional provisions this must be a record!
- If an employee will reach the normal retirement age after 30 September: the current law cannot be used and employers would need to objectively justify any dismissal (and have a proper procedure) to avoid the risk of a claim for unfair dismissal and/or age discrimination.
Overall, as I said, the fundamental issue is whether an employee will be 65 by 30 September 2011. If they will be, then an employer needs to consider whether to start a process on or before 5 April which will lead to their retiral under the current law. Employers also need to plan for how they will deal with their remaining employees and how "retirals" will be managed in the future.
If employers are in any doubt then advice should be taken as mistakens in this area may well be expensive.
Subject to Parliament's approval, we hopefully now have clarity on what will be happening. All in all, trying to understand (and explain) the permutations makes you think about retiring!