Update on the Default Retirement Age
As previously stated in our article on 14 January 2011, from 6 April 2011 the Default Retirement Age (“DRA”) and the statutory retirement procedures will be phased out. On 1 October 2011 the DRA and the statutory retirement procedures will be abolished and employers will have to objectively justify the retirement of any employee at any age and follow a fair procedure. Transitional arrangements apply to cases where notice to retire under the old DRA procedure is given before 6 April 2011.
Draft regulations implementing these changes were placed before Parliament in February. However these first draft regulations stated that it was only possible to make an employee retire using the Default Retirement Age (DRA) if the employee was going to turn 65 between the 6 April 2011 and 30 September 2011.
The Government has therefore now introduced a revised version of the legislation, titled the Employment Equality (Repeal of Retirement Age) Regulations 2011. The amended Regulations are scheduled to come into force on 6 April 2011. They state that an employer may retire an employee using the DRA provided the employee has turned 65 at any time on or before 30 September 2011 and correct notice of retirement has been given under the old statutory regime on or before 5 April 2011.
If an employer wishes to give notice of retirement using the DRA, the maximum notice of retirement that an employer can give an employee will be 12 months. Therefore the last possible day that an employee can be compulsorily retired using the DRA will be 12 months from the last day that notice can be given. The last date that notice of retirement can be given is 5 April 2011 and therefore the last day that an employee could be compulsorily retired using the DRA is 5 April 2012.
Under the old statutory regime, an employee could make a request to delay their retirement date if they were notified they were going to be retired using the DRA. The new regulations state that employees will not be able to make any such requests after 4 January 2012. Under the old regime, an employee could make a request for an extension for any period of time, however if such a request was for a period of over 6 months a fresh request had to be reissued by the employee and a full procedure followed every 6 months. Because no requests for extensions will be allowed after 4 January 2012, this means that the maximum extension to retirement that an employee could possibly request under the new regulations will be for six months or less.
Although there is some debate on the point, the majority of legal opinion (shared by the Department of Business Innovation and Skills and ACAS) is that the latest possible extension of an employee’s employment will be 6 months from the 6 April 2012 and therefore the final date for retirement possible using the DRA will be 5 October 2012.
Any employee who is given notice to retire due to age after 5 April 2011 can claim age discrimination. To defend such a claim an employer would need to show that the retirement was objectively justified. Useful links