Legal Update - Abolishing the Retirement Age
Legal Update – August 2010
Abolition of the Default Retirement Age
The government is proposing to abolish the default retirement age of 65 and the statutory retirement procedures on 1 October 2011 and bring in transitional arrangements to phase them out on 6 April 2011.
According to the proposals, from 6 April 2011 it will no longer be possible for most employers to give employees notice of dismissal on the grounds of having reached 65.
The current statutory retirement procedures include a right for an employee to request to work beyond the age of 65 and a duty upon the employer to consider this.
If an employer gives notice of retirement using the statutory retirement procedures before 6 April 2011 and:
- the intended date of retirement is before 1 October 2011 – the default retirement age will continue to apply.
- the intended date of retirement is after 1 October 2011 – the default retirement age will no longer apply. If the employer is relying upon its own contractual retirement age this will have to be objectively justified as a proportionate means of achieving a legitimate aim.
With regard to notices of dismissal given after 6 April 2011, the default retirement age and statutory retirement procedures will no longer have effect. Employers will be able to rely on their own compulsory retirement age only if it can be objectively justified as described above (e.g. in the case of police officers or air traffic controllers). If a specified retirement age cannot be justified, then an employer will need to rely on one of the other statutory potentially fair reasons in order to dismiss an employee.
There is currently a consultation on the proposals, which closes on 21 October 2010. Presuming that the reforms will go ahead according to the suggested timetable, employers will need to start preparing themselves for the changes now.
Employers will need to do the following:
- Review and amend their employment practices to comply with the new law.
- Ensure that they have adequate performance management so that if employees are genuinely no longer capable of carrying out their work they may be dismissed and on the other hand so that employees are not dismissed on the grounds of capability without the right procedures being followed (which could lead to unfair dismissal claims).
- Review their pension schemes.
For any further advice please contact Audrey Spencer at our Poole office on 01202 725400 or Caroline Carretta or Louise Rowsell at our Dorchester office on 01305 251007.
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