Time to retire

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08 October 2010

At the end of July 2010, the Government announced that it intends to remove the default retirement age of 65 (DRA) by April 2011.  If the proposals go ahead, this means that employers will generally no longer be able to retire employees when they reach a particular age and will instead have to rely on another fair reason, for example, poor performance to justify any dismissal.

The abolition of the DRA will have a significant impact on business planning, particularly for those businesses with employees approaching or past the current DRA. As the agricultural sector traditionally employs large numbers of older people, you may want to consider the following:

  1. The current statutory retirement procedure requires employers who wish to retire an employee to notify the employee 6-12 months before the compulsory retirement date and to give them the right to request to work beyond that retirement date.  If an individual is retired in accordance with this procedure this will be a fair dismissal and will not constitute age discrimination. If the Government’s proposals go ahead, this regime will be phased out so employers will only have until 5 April 2011 to issue these statutory retirement notifications with all retirements having to take effect before 1 October 2011. 
  2. Whilst the proposals should not affect an employer's existing ability to impose a compulsory retirement age beyond 1 October 2011, the employer will need to be able to objectively justified the chosen age and this, as now, is likely to be difficult for most employers.

In order to plan ahead you may want to establish whether any of your employees are approaching or past the DRA and consider whether these employees should be retired under the current statutory retirement regime before it disappears. 

For further information contact Huw Cooke on 0117 902 7719 or email huw.cooke@burges-salmon.com

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