Proposals to Abolish the Default Retirement Age

Under the Employment Equality (Age) Regulations 2006, an employer is currently able to retire employees at or above the default retirement age of 65, provided they follow the statutory retirement procedures. The government had always intended to review these provisions in 2011 but in July 2009, they indicated that the review would be brought forward to 2010.

In its Programme for Government, the coalition government committed to phasing out both the default retirement age of 65 and the statutory retirement procedures. This commitment was confirmed on 29th July 2010 with the publication of a consultation document setting out the government’s proposals to phase out the provisions from 6 April 2011 and abolish them on 1st October 2011.

The proposals for transitional arrangements which will be put in place from 6th April 2011 are:

• An employer will no longer be able to give 2 weeks short notice of retirement which is currently allowed in the Employment Equality (Age) Regulations 2006.

• If notice of retirement has been given before 6th April 2011 and the intended date of retirement is before 1st October 2011, then the default retirement age will continue to apply - provided the employer continues to follow the statutory retirement procedures.

• If an employer has given notice of retirement before 6th April 2011, and the intended date of retirement is after 1st October 2011, the default retirement age will no longer apply.

• An employer will no longer be able to rely on the default retirement age if giving notice of retirement after 6th April 2011. This is because the short notice provisions will no longer apply and the minimum six months notice which must be provided would expire after 1st October 2011.

Following 6th April 2011, employers will still able to operate their own compulsory retirement age, provided that they can objectively justify it as a proportionate means of achieving a legitimate aim. If employers are unable to objectively justify their own compulsory retirement age then this may constitute unlawful age discrimination.

The consultation closes on 21st October 2010. Therefore, we will have to wait until after this date for confirmation of the coalition government plans. We will of course inform you in future updates if there are any changes to the current proposals.

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