On the 6 April 2011 the default retirement age of 65 was abolished, together with the duty on employers to consider requests to work beyond the retirement date. Also abolished was the exemption allowing employers to lawfully refuse to recruit individuals who would be 65 within 6 months, or who were already over 65, and the use of retirement as a statutory fair reason for dismissal in its own right.
The Government has provided a 12 month transitional period within which the old rules under the Employment Equality (Age) Regulations will continue to apply. This will only apply to situations where employers had sent a letter on or before the 5 April 2011 giving notice to an employee of 65 years or over of an intended retirement date and meeting the other requirements in the Regulations.
When the default retirement age was introduced in 2006, the Government had committed to reviewing it in 2011, but this was brought forward to 2010. It was this review that resulted in the decision to abolish the default retirement age. This can be seen as a reflection of the increasing percentage of the population who are over 65 and need to work longer to save for retirement.
Some of the impacts of the abolition of the default retirement age are summarised below:-
• Employers are no longer able to automatically assume that it is safe to retire employees of 65 years or over.
• Where employers want to have a fixed retirement age or retire individual employees, they will have to show objective justification for their decision. For example, the employer must be able to demonstrate a business need that will be met by the retirement age imposed and that it is proportionate to use that retirement age as a means of achieving that aim. How lenient the tribunals will be in assessing whether the employer has objectively justified a retirement age remains to be seen. Previous retirement age justifications have usually been linked to positions that require a high level of mental or physical fitness.
• There is now no legal framework for discussion about retirement at an obvious point, as reaching 65 years old was previously. This means that employers will need to review their appraisal systems as this could facilitate a discussion of an employee’s future intentions, although any questions that could be seen to be discriminatory should be avoided.
If you need advice on any of the issues highlighted in this article, whether for business or individually, please contact Julie Taylor: [email protected]