STOP PRESS – ABOLITION OF DEFAULT RETIREMENT AGE

The draft Regulations to abolish the default retirement age have been published by BIS and laid before Parliament. We shall be discussing the impact of the Regulations at our Spring Employment Seminar on 31st March 2011, but for now there appears to be quite a significant anomaly in the drafting. 

As they stand at the moment (and the Regulations could still be amended) there will not necessarily be protection for employers to retire someone who has already reached age 65 before 6th April 2011.    The reason for this is that unless the specific transitional provisions apply, any dismissal which takes effect from 6th April 2011 onwards and which is based on the fact that the employee is 65 or older could be regarded as unfair dismissal and/or age discrimination unless the employer can show that the policy of retirement is objectively justified.  

The conditions for the application of the transitional provisions are as follows:-

1.         Notification in accordance with the Age Regulations must be given before 6th April 2011, and

2.         The person will attain the age limit (65 or normal retirement age if higher) during the period that begins on 6th April 2011 and ends with 30th September 2011.

The transitional provisions do not therefore cover anyone who has already attained the age limit by 6 April 2011.  It was not previously suggested that this was the intention but it seems clearly to be the effect of the current draft.  

There is still time for the Regulations to be amended so that there will be consistency for all employees who are or will be at least 65 by 30th September 2011, but if as an employer you have given notice of intended retirement to an employee who is already over 65 and to take effect after 5th April 2011 you should consider taking advice.  If the draft Regulations are not amended, a retirement in these circumstances could leave an employer vulnerable to a potential claim for unfair dismissal and age discrimination.  

Otherwise, the Regulations are broadly as expected, including reassurance for employers that the provision of insurance benefits to the under 65s, but not to those over 65, will not amount to age discrimination. 

For more detailed information and to discuss these and other relevant issues, please contact Jane Laidler j.laidler@grm.co.uk