Phasing out the Default Retirement Age

The Government’s Plans

On 29 July 2010, the Government published the phasing out of default retirement age consultation. As you will be aware the current default retirement age is age 65.

The Government’s proposals on phasing out the default retirement age are as follows:­

6 April 2011 ­ No new notifications for retirement on the basis of the default retirement age can be issued by employers.

1 October 2011 ­ The default retirement age and the statutory retirement procedures will be abolished.

Issues that Employers will face

After 1 October 2011, employers will be unable to terminate an employee’s employment when the employee reaches age 65 on the grounds of retirement, unless the employer can objectively justify doing so. It is our view that there will be a significant number of job roles for example finance, administrative and marketing roles where it will be difficult to justify having a retirement age of 65. We can advise employers as to whether a proposed contractural retirement age can be justified, please do not hesitate to contact us if you require such assistance. It is important for employers between now and April 2011 to review the work force and ensure that appropriate notices are issued to employees to ensure that any dismissals on the grounds of retirement are deemed to be fair.

Recap of the current procedure

Six months, but not more than twelve months, before the intended date of retirement (a six month window), the employer must notify the employee in writing of:­

  • The date that the employer intends to retire the employee;
  • The employee’s right to request not to retire on the intended date of retirement;
  • If the employer fails to notify the employee during the six­month window, it is under a continuing duty to provide the written notification two weeks before the date of termination on the grounds of retirement.
  • If the employer provides notification within the six­month window and the employee’s employment terminates on the date of retirement, then retirement will be deemed to be the only reason for the employee’s dismissal and the dismissal will be fair.

An employer who receives a request by the employee to work beyond the retirement age must:­

  • hold a meeting to discuss the request with the employee within a reasonable period after receiving it;
  • give the employee written and dated notice of its decision as soon as is reasonably practical after the date of the meeting;
  • advise the right to appeal;
  • conduct an appeal meeting within a reasonable period after the date of the notice of appeal; and give the employee written notice of its decision on the appeal as soon as is reasonably practical after the date of the appeal meeting.

If you would like further advice in relation to retirement age and whether your organisation could justify having a set retirement age then please contact Sejal Raja on sejal.raja@rlb-law.com.


Disclaimer

This briefing is for guidance purposes only. RadcliffesLeBrasseur accepts no responsibility or liability whatsoever for any action taken or not taken in relation to this note and recommends that appropriate legal advice be taken having regard to a client's own particular circumstances.