Abolition of the Default Retirement Age – Act Now

Posted: 3rd March 2011

The Government has published the draft Employment Equality (Repeal of Retirement Provisions) Regulations 2011. These will abolish the Default Retirement Age (DRA) of 65 and are due to come into force on 6 April 2011.
What this means is that the last date on which an employer can lawfully notify an employee of a retirement dismissal using the statutory DRA provisions laid down by the Employment Equality (Age) Regulations 2006 is 5 April 2011.After that date, it will no longer be lawful to compulsorily retire an employee on the grounds of age unless the dismissal can be objectively justified as a proportionate means of achieving a legitimate aim. There are some changes in the transitional arrangements, of which employers should be aware.
Under the DRA provisions, employers must give a minimum of six months’ notice of retirement but no more than 12 months’ notice. Previous announcements had suggested that, under the transitional arrangements for phasing out the DRA, all retirements under the provisions would have to take effect by 30 September 2011, but this is not the case. Retirements notified on or before 5 April 2011 can continue to the end of the given notice period, provided certain conditions are met. These are:
  • the statutory procedures set out in the 2006 Regulations must be followed. These include notifying the employee that he or she has the right to request to continue working beyond the DRA – or the normal retirement age where your business has in place a higher normal retirement age. Employers have a duty to give serious consideration to such a request; and
  • the employee must attain the age of 65 or reach the higher normal retirement age before 30 September 2011.
Under the draft Regulations, the last date on which an employee can exercise his or her right under the DRA provisions to request to continue working beyond retirement age is 5 January 2012. The maximum extension that can be granted without the employer giving the employee a fresh notice of retirement is six months. Therefore, according to the Department for Business, Innovation and Skills, the latest possible retirement date for an employee given notice to retire on 5 April 2011 is 5 October 2012
The draft 2011 Regulations also repeal the provision allowing short (two weeks’) notice of retirement. Short notifications will therefore no longer be permitted after 5 April 2011.
Contact us if you are planning to retire employees who will have reached retirement age before 30 September 2011 and would like advice.