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Proposed Abolishment of Default Retirement Age


 
The Employment Equality (Age) Regulations introduced in 2006 implemented a Default Retirement Age of 65 and prohibited compulsory retirement before that age unless it could be objectively justified.  An employer would need to show that retirement at 65 was a proportionate means of achieving a legitimate aim.  Employees had the right to request to work beyond the Default Retirement Age and the employer was obliged to consider that request.

The Government is proposing to remove the Default Retirement Age of 65 from October 2011.  The proposed removal of the Default Retirement Age will begin in April 2011 with transitional arrangements covering the period until October 2011.  The Government is also proposing to remove the employee’s right to request working beyond retirement as this will no longer be required.  The state pension age will also be increased to 66. 

There is currently a consultation process about this and you can air your own views on this.  If you would like to do this, you should go to www.bis.gov.uk.

Currently, the Default Retirement Age is not mandatory and employers and employees can agree to work past the age of 65.  

In some circumstances and industries, a particular retirement age can be set.  However, employers will need to look carefully at the reasons for choosing a particular retirement age.  It must show that retirement is a proportionate means of achieving a legitimate aim.  A legitimate aim may be health and safety, training requirements of the job or the needs and efficiency of running a business.  The employer must be able to prove that there was a proportionate means of achieving a legitimate aim which can sometimes be difficult. 

A number of groups will be unaffected by the proposed removal of the Default Retirement Age such as police, the judiciary, partnership and where there is statutory age limit (e.g. commercial pilots).  This could mean that there would be a rise in claims in the Employment Tribunal, however, this is likely to be on the basis of whole groups of employees within certain sectors as opposed to just individuals.

What does this mean practically for you?

As an employer – it will mean that you will be unable to terminate an employee’s employment for reason of retirement at the age of 65 and force them to leave your employment.  In order to dismiss (or retire) an older worker, this would entail following a fair procedure and relying on the provisions of the Employment Rights Act 1996 i.e. capability, conduct, illegality or some other substantial reason.

As an employee – you will no longer be forced to retire at 65.  It will give you more of an opportunity to work beyond the current Default Retirement Age whether that be to keep active and maintain a social life or to save more money for your retirement.

We will update you further as this develops!

If you would like further information on this topic please contact Verity Slater on 01872 241700 or to email her click here.
 

 



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