Removal of the Default Retirement Age – keep calm and carry on!
07 March 2011
The Government has now published an updated version of the draft regulations removing the default retirement age. The new version remedies the confusion that arose when the original draft regulations were published in mid-February and adds some further detail regarding an employee's right to request to work beyond retirement.
Updated draft regulations
Confusion was caused when an error in the original draft regulations meant that only those employees attaining the age of 65 between 6 April 2011 and 30 September 2011 could be retired without leaving the employer exposed to claims of unfair dismissal/age discrimination – i.e. those who were 65 or over before 6 April 2011 could not be retired without risk of claims.
The updated draft regulations remedy this and reflect the position that was originally suggested by the Government.
In a nutshell, the current position under the revised draft regulations is as follows:
Category 1 - employees who are 65 or over on or before 30 September 2011
Employers will be able to retire these employees without risk of claims for age discrimination and unfair dismissal provided that:
- you follow the statutory retirement procedures; and
- on or before 5 April 2011, you give notice of retirement of at least 6 months and not longer than 12 months.
Category 2 – employees who reach the age of 65 on or after 1 October 2011.
Employers will not be able to retire these employees without risk of claims for age discrimination and/or unfair dismissal.
Requests to work beyond retirement
As the statutory retirement procedure must be followed to retire an employee, the employer must still give the employee the right to request to continue working and it will still be possible to extend employment for a period if the employee requests it. If an employer agrees to an employee's request, the maximum extension that can be agreed (without the employer facing claims of age discrimination/unfair dismissal on expiry) is 6 months from the original retirement date.
What do I do?
Whilst the revised regulations are still in draft form, it seems unlikely that they will be materially amended again.
The revised regulations should, therefore, mean that employers can continue as originally anticipated when the Government confirmed the removal of the default retirement age. In particular, it would be sensible to review your position to ensure that all employees currently over 65 and/or reaching the age of 65 on or before 30 September 2011, whom you wish to retire, are given notification of retirement in time.
If you have any queries or wish to discuss this, please do get in touch with a member of the employment team.