Default Retirement Rule Abolished - So What Does It Mean?

It has recently been confirmed that the rules relating to default retirement ages and compulsory retirement will cease to have effect from 1 October 2011.

Regulations have now been published (The Employment Equality (Repeal of Retirement Age) Provisions 2011), which come into force on 6 April 2011 and deal with the phasing out of the default retirement age. However, they appear to contain an important drafting error.

Unless the transitional provisions of the Regulations apply, a dismissal on the grounds that someone has reached a retirement age at or over 65 will be unfair and amount to age discrimination, unless it can be objectively justified by the employer. The transitional provisions will only apply if two conditions are met (i) notification of retirement has been given in accordance with Schedule 6 to the Employment Equality (Age) Regulations 2006 before 6 April 2011 and (ii) the employee will attain the age limit (65 or any higher applicable retirement age) between 6 April 2011 and 30 September 2011.

Therefore, as currently drafted, if an employee is over 65 on 6 April 2011, even if he has already been given notice of retirement to take place after that date in accordance with current legislation, the employer will not be lawfully entitled to retire that employee unless the retirement age can be objectively justified.

It has to be hoped that this is a drafting error that will be rectified before the Regulations come into force.  If not, employers who make employees compulsorily redundant after 5 April who had reached 65 by that date will be exposed to unfair dismissal and age discrimination claims.

If you are an employer and are unsure how the Regulations will apply to your current employees then do contact our employment team for further advice on 01952 291222.