30th July 2010

INFORMATION
UPDATE

 Issue No.  2010/18

 Sentient
              

 

 Retiring? Not me

Here we go then, the precursor to not getting your pension payout until you are in no fit state to enjoy it. The Government have announced proposals to remove the default retirement age (DRA) of 65, we knew it was coming but the speed at which it is to be removed has surprised many.
 
Without going into the blah-di-blah legal history, at present an employer can compulsorily retire an employee at the age of 65 or above without that being deemed to be unfair dismissal or age discrimination, provided they follow a set statutory retirement procedure.  Currently employees have a statutory right to at least six months’ notice of retirement and a right to request to work longer and the employer has a duty to consider this request.
 
The key proposals are:
  • retirements under the DRA will cease on 1st October 2011.
  • no new notices of intended retirement may be issued after 6th April.
  • retirement dismissals will still be permissible after 1st October, but only if objectively justified. We will keep you updated on what might constitute 'objective justification'.
  • transitional arrangements will apply to retirements that have been notified before 6th April 2011 to take effect before 1st October 2011. Retirements notified before 6th April, but intended to take effect after 1st October, will not be valid unless objectively justified
  • the procedural requirements applicable to a retirement dismissal, currently set out in Age Discrimination Regulations, will be abolished.
The implications are that if an employer wished to dismiss (or retire) an older worker this would only be possible by following a fair procedure and relying on one of the well established reasons set out in section 98 of the Employment Rights Act 1996 (capability, conduct, redundancy, illegality or some other substantial reason).
 
The Government's consultation on the proposals can be found on the Department of Business Innovation and Skills web site, the closing date for responses to the consultation is 21st October 2010.
 
We will comment further on this once the position is clearer. Stay tuned.

 

 

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