The draft Employment Equality (Repeal of Retirement Age Provisions) Regulations 2011 have now been published and are expected to come into force on 6 April 2011.
From 1 October 2011, the Default Retirement Age (set at 65) will be abolished. The Regulations will come into force on 6 April 2011 and deal with the phasing out of the current procedures and the eventual abolition occurring in October. Broadly speaking, after 5 April 2011, employers will no longer be able to commence the statutory retirement procedure to force an employee to retire due to their age. It will though still be possible for employers to have a retirement age moving forward if it can be objectively justified. If the retirement age cannot be objectively justified, then any compulsory retirement dismissal will be unfair and discriminatory.
Up to and including 5 April 2011 it will remain possible to commence the statutory retirement procedure and rely upon that procedure and the default retirement age of 65 to avoid an unfair dismissal and/or age discrimination claim, provided that the employee turns 65 before 1 October 2011 (subject to the point below). This allows retirements under the statutory retirement procedure to take effect up to 4 April 2012 (i.e. 12 months' notice having been given on 5 April 2011). The statutory process requires that at least 6 months' notice is given to an employee prior to the retirement age to fully benefit from the full statutory protections. A "short notice process" (which allows a shorter notice period but means that the employee is entitled to compensation amounting to up to eight weeks' salary) exists but this will be abolished as of 6 April 2011 also.
Due to an apparent drafting error in the draft regulations, as presently worded, it will not be possible to rely on the default retirement age and the statutory retirement procedures (for retirements which take effect after 5 April 2011 - i.e. where the termination date is after 5 April 2011) for employees who reach the age of 65 before 6 April 2011. It is likely that this will be corrected before the draft regulations become law and there have already been suggestions that this is the case. However, employers in this position should check whether this issue has been corrected and/or take advice.
With the abolition of the default retirement age, employers need to be very careful (and should seek specific advice). Employers should consider whether they intend to retain a "retirement age" and if so, how they will objectively justify this and put the necessary procedures in place. The full extent of what will amount to objective justification is yet to be established by the courts. As such, until the law is clearer, great care should be exercised.
For details of the up to date position see the BIS website at www.bis.gov.uk It is recommended that advice is sought for any retirements on or after 6 April 2011.