April 6: Default retirement age abolished
The provisions enabling employers to retire an employee at the age of 65 on the basis that he or she has reached the default retirement age, and the associated statutory retirement procedure, are repealed from 6 April 2011.
On or after 6 April 2011, employers will no longer be able to issue notifications of retirement on the basis of the default retirement age (or the employer's normal retirement age, if that is higher). Employers that wish to retire employees must have an objective justification to avoid a successful claim for age discrimination. Retirement is no longer a fair reason for dismissal under s.98 of the Employment Rights Act 1996, so employers that wish to achieve a fair dismissal must rely on one of the remaining fair reasons for dismissal set out in s.98 of the Employment Rights Act 1996 (capability, conduct, redundancy, illegality or some other substantial reason).
A transitional period applies to retirement notifications issued on or before 5 April 2011. Retirements that had already begun can continue through to completion, provided that the employee reaches the age of 65 (or the employer's normal retirement age, if that is higher) before 30 September 2011 and the employer follows the statutory retirement procedure. The last date for a retirement under the statutory procedure is 5 April 2012 (according to the Department for Business, Innovation and Skills (BIS)), on the basis that the employer must give between six and 12 months' notification of retirement. If the employee wishes to make a request to continue working, the final date for doing so is 4 January 2012, on the basis that this must be done more than three, but not more than six, months before the intended date of retirement. This makes 5 October 2012 the last possible date for a retirement under the statutory procedure (according to BIS), because the employer can agree a maximum six-month extension from the intended date of retirement.
Employers may no longer prohibit job applicants from applying for a role if they are aged 65 or over, or are within six months of that age. However, the employer may limit access to group-risk insured benefits, for example income protection and life insurance, to people aged under 65.
- Draft Employment Equality (Repeal of Retirement Age Provisions) Regulations 2011 (PDF format, 30K) Read the draft Regulations, which were amended following confusion over the original version of the Regulations, on the UK legislation website.
- Working without the default retirement age Read the Acas guidance on the abolition of the default retirement age on its website.
Default retirement age to be abolished The XpertHR forthcoming law section provides detailed guidance on the abolition of the default retirement age.
Post-default retirement age policy and procedure Use this model policy to deal with the retirement of employees to whom the default retirement age does not apply.
The XpertHR FAQs section covers the abolition of the default retirement age:
- How can an employer know whether or not its retirement age can be objectively justified?
- What procedure should an employer follow if it wants to retire an employee after the removal of the default retirement age?
- What should an employer do if an employee indicates that he or she wishes to retire?
- Can an employer ask an employee whether or not he or she has any plans to retire?
Podcast: Abolition of the default retirement age XpertHR employment law editors Susie Munro and Jeya Thiruchelvam discuss the repeal of the default retirement age and associated statutory retirement procedure, giving guidance on the transitional provisions relating to the repeal of the regime, the key dates that employers need to be aware of, and what employers will need to show if they want to compulsorily retire employees on or after 6 April 2011.