At present, there is a default retirement age (DRA) of 65 which means employers can retire their employees at age 65 by giving an employee 6 months’ notice in writing of the impending retirement date.
An employee can request to work beyond their retirement date if they wish and the employer has a duty to consider such a request. Ultimately, however, the employer can still decide to retire the employee without this being an unfair dismissal or age discrimination. This is all about to change!
The Government has recently confirmed that the DRA, and the statutory retirement procedure, will be phased out from April 2011 and from 1 October 2011 the statutory retirement procedure and the DRA will both cease to exist.
We understand that transitional arrangements will be put into place from 6 April 2011 until 1 October 2011. Where an employee is due to retire on or before 30 September 2011, the existing statutory procedures will still apply as long as the notice to retire is issued before 6 April 2011. If an employer gives notice of retirement on or after 6 April 2011, it cannot rely on the DRA because the minimum of 6 months’ notice in writing would expire after the cut-off date of 1 October 2011 and the reliance of the ‘short notice’ provisions will have been abolished.
Any compulsory retirements on or after 1 October 2011, will need to be objectively justified, following a fair procedure under ordinary unfair dismissal rules and rely on one of the other potentially fair reasons to dismiss (conduct, capability, redundancy, some other substantial reason or illegality).
There is likely to be a surge of unfair dismissal and age discrimination claims from employees who have been forced to retire on or after 1 October 2011. So if in doubt, take advice!