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I understand the law regarding automatic retirement at 65 is to change soon. Can you advise on retirement of staff with regard to the changes?


25 March 2011

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It has been government policy, since the introduction of the
Employment Equality (Age) Regulations in 2006 to review the
default retirement age (DRA). The coalition government’s
decision to abolish the DRA fits alongside its policy of raising
the state-pension retirement age to address the problems of
the ageing population.

Prior to 6 April 2011, compulsory retirement will remain
lawful provided that:
• Notification of retirement is given to the employee before
6 April 2011;

It has been government policy, since the introduction of the
Employment Equality (Age) Regulations in 2006 to review the
default retirement age (DRA). The coalition government’s
decision to abolish the DRA fits alongside its policy of raising
the state-pension retirement age to address the problems of
the ageing population.

Prior to 6 April 2011, compulsory retirement will remain
lawful provided that:
• Notification of retirement is given to the employee before
6 April 2011;
• Date of retirement falls before 5 April 2012;
• All statutory retirement requirements are met; and
• The person will reach the normal retirement age between
6 April – 30 September 2011.

Many commentators have suggested this latter point is a serious drafting error, which precludes employers lawfully retiring an employee unless he/she has reached retirement age between 6 April – 30 September 2011 this provision may be subject to amendment.

From 6 April, employers can abandon or retain fixed
retirement ages. If a fixed retirement age is retained, an
employer will need to objectively justify retirement as a
proportionate means of achieving a legitimate aim.

If a fixed retirement age is abandoned, employers should
remove references to retirement from their contracts and
inform staff of the change. In these circumstances staff would
be left to decide when they wish to resign.

In terms of legal risks, from 6 April, employees can bring
discrimination and unfair dismissal claims in relation to
dismissals due to age. If an employer can objectively justify the retirement, the dismissal will be fair for “some other substantial reason”.

The abolition of the DRA means that employers will either
have to justify a retirement dismissal, which may be difficult;
or allow employees to continue working until they choose to
resign. It is also likely to place a greater emphasis on managing employees’ performance.

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