e-Bulletins
Proposed Removal of the Default Retirement Age
The government is proposing to phase out both the default retirement age ("DRA") of 65 and the statutory retirement procedures. They are proposing to abolish the DRA on 1 October 2011, and certain arrangements will commence on 6 April 2011 to achieve this.
Key proposals
The government intends to abolish the DRA as follows:
6 April 2011: Begin to phase out the DRA and all associated statutory retirement procedures (including the "duty to consider" and "right to request" procedures). No new notifications of retirement under the DRA can be issued by employers after this date – this is crucial to note.
1 October 2011: The DRA and the statutory retirement procedures will be abolished.
Change arrangements
Where you have given notice of retirement under the DRA using the statutory retirement procedures before 6 April 2011 and the:
- intended date of retirement is before 1 October 2011: the DRA will continue to apply so long as you continue to follow the statutory retirement procedures.
- intended date of retirement is after 1 October 2011: the DRA will no longer apply. You will need to be able to objectively justify any retirement taking effect after 1 October 2011.
If you give notice of retirement after 6 April 2011, you can no longer rely on the DRA. This is because the minimum 6 months' notice would expire after 1 October 2011 and the short notice provisions allowing less than 6 months' notice will have been repealed. You will need to be able to objectively justify any retirement, if relying on your own contractual retirement age, or will need to rely upon one of the other potentially fair reasons for dismissal.
Contractual retirement ages
If giving notice after 6 April 2011, you will still be able to operate your own compulsory retirement age, providing that you can objectively justify it as a proportionate means of achieving a legitimate aim.
Some issues that you may want to start thinking about now are:
- Without the DRA you may have to start managing older employees out of the workforce for reasons such as poor performance. Will this mean that performance management procedures need to be tightened for all employees?
- Do you have any reliable evidence that an employee's performance deteriorates as they get older to justify a retirement age?
- Employees in the run up to retirement may have been overlooked for promotion and training in the past. Has this been an issue with your workforce and how will this be addressed in the future to stop age discrimination claims?
- What about flexible retirement, e.g. an employee working reduced hours post-65. How are such issues to be raised?