The Government consults on proposals to phase out the default retirement age by 1 October 2011.
The Employment Equality (Age) Regulations 2006 (SI 2006/1031) provide for a default retirement age of 65, which allows employers to retire employees who are 65 or over. The Government intends to phase out the default retirement age from April 2011, by prescribing that from 6 April 2011 employers will be prohibited from issuing new notifications of retirement using the default retirement age. Employers will not be required to follow the statutory retirement procedure, and dismissals will need to be conducted in accordance with unfair dismissal rules.
The Government proposes a transitional period of six months. Employers who have commenced the statutory retirement procedure before 6 April 2011 will be able to retire employees whose retirement date is before 1 October 2011.
On or after 1 October 2011, employers will be prohibited from prescribing a compulsory retirement age, unless they can justify it as a proportionate means of achieving a legitimate aim.
The Government seeks views on how to help employers manage without the default retirement age and encourage communication between an employer and an individual on alternatives to retirement. It suggests issuing guidance, for example in the form of a code of practice.
The Government seeks views on whether or not the removal of the default retirement age could have an impact on insured benefits and employee share plans.
The closing date for submissions is 21 October 2010. The Government intends to publish its response in November 2010.
Retirement and Age discrimination The XpertHR employment law manual sets out employees' rights in relation to retirement and age.
Policies and documents on retirement The XpertHR policies and documents section includes a letter from an employer notifying an employee of his or her intended date of retirement and the right to request not to retire, and a letter from an employer that imposes a retirement age to inform employees that it is removing its retirement age.
Simply written guidance on retirement ages, employers' duty to notify employees of their forthcoming retirement and the right for employees to request to continue working is available in the XpertHR line manager briefing on retirement.
Default retirement age and age discrimination Changes to the default retirement age mean employers will have to justify their retirement ages or risk claims, advises Louise Mason, senior associate at Hogan Lovells.