Gardner Leader

Ready to Retire?

On Tuesday 14^th July 2009 the Government announced that a review of the default retirement age planned for 2011 will be brought forward by a year. Julie Taylor, Employment Solicitor at Gardner Leader LLP, briefly looks at what the current UK retirement provisions are and why these are going to be reviewed.

What is the default retirement age and what does it mean?

Currently employers can require employees who reach 65 years to retire on their 65^th birthday for no reason other than their age, as long as they have followed the prescribed statutory procedures.

What are the current procedures?

The procedures, set out in the Employment Equality (age) Regulations 2006, require (as a minimum) that employees are notified in advance of the intended retirement date and of their right to request to continue working. This notification must be sent not more than 12 or less than 6 months before the intended retirement date, which is usually the employee's 65^th birthday.

If the employee requests to work beyond the retirement date, the employer must consider the request. If it can be accommodated then a new retirement date should be agreed. If the employer does not agree to the extension request, they can insist that the employee retires on the intended retirement date, although the employee could appeal against the decision.

Why is the retirement age the subject of a review?

There are a number of reasons that have been cited for the review and why it has been brought forward. The current economic climate means that many individuals are being forced to work for longer to meet shortfalls in their pension and maintain their standard of living.

Additionally, allowing UK employers to continue to end employment for no reason other than the employee's age has been challenged as age discrimination. In particular, the UK Government has been accused of failing to fully implement the European Equality framework, which seeks to protect employees from discrimination on grounds of their age, amongst other things.

Who has challenged the current system as discriminatory?

Age Concern has been leading a case to challenge the default retirement age and procedures implemented by the UK Government through the Employment Equality (age) Regulations 2006. The case was referred to the European Court of Justice in March this year who took the view that, in principle, the default retirement age may be justified, but the case has now been referred back to the High Court. The High Court's ruling is expected in the Autumn and they have to decide whether or not the UK has correctly implemented the European directive outlawing age discrimination. 

The outcome of this case is likely to have a significant impact, and for now we will all have to wait and see what happens next.

If you have any queries about any of the contents of this article, or have been affected by any of the issues, please contact Julie Taylor on 01635 508181.

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