Default Retirement Age to be scrapped

The Government has announced that the default retirement age (DRA) will be scrapped on 1 October 2011.

At the moment, employers can force staff to retire at the age of 65 regardless of their circumstances but this will not be permitted under the new plans.

There is a transition period between 6 April 2011 to 1 October 2011 which means employers will not be able to issue any notifications for compulsory retirement using the DRA procedure. Between 6 April and 1 October, only people who were notified before 6 April, and whose retirement date is before 1 October can be compulsorily retired.

After 1 October, employers will not be able to use the DRA to compulsorily retire employees; if they wish to use retirement ages they will have to be able to demonstrate that these are objectively justified, for example in physically demanding jobs.

If you have polices in place forcing staff to retire at 65 then these will need to be reviewed. This is a service EmployEasily are happy to provide before the proposed changes take effect.

A consultation process is now in place until 29 October 2010, and as part of the consultation process a review on administration will take place.  There will no longer be a need for employees’ “right to request” to work beyond retirement or for employers to give them a minimum of six months’ notice of retirement.

We know this could cause some difficulties for employers as you might not be able to forward plan if you don’t know when an older worker is likely to retire. In some cases there you might have an example of an older employees who is not performing to a level they were previously and your worried out to approach this subject for fear of being taken to a tribunal.

Since Labour’s Employment Equality (Age) Regulations were introduced in 2006, employers have been allowed to force staff to retire at 65 without having to justify their decision. The DRA has been challenged by campaigners in the courts on several occasions, most notably Heyday and a number of groups will welcome this decision.