13/01/2011

Employment e-Brief – Abolition of Default Retirement Age

There has been a great deal of anticipation and speculation in the press regarding what will happen to the default retirement age of 65.

It has been confirmed that a default retirement age is to be abolished from 1 October 2011 and the transitional arrangements will apply from this April.

There has been various media speculation on the issue of what should be done by employers to avoid being caught out by this change. Some employers have (rather outrageously) advocated sacking everyone who is over 65 or who will be 65 before the 30 September. It has always been our view that it would be highly inappropriate to advise employers to have a “clear out” of such staff before the new rules apply. Firstly, this would be disproportionate and morally unfair but secondly, it would only delay the problem which will catch up with employers in due course anyway.

That having been said, there may be instances where employers do wish to use this last chance to compulsorily retire people, rather than be faced with the alternative of managing poor performing employees in the normal way. In this respect employers need to be aware that if they have any employees who are due to reach the default retirement age of 65 before 30 September 2011 then they have only until the end of March in which to serve the required notice to start the process. So long as notification of retirement is given by 30 March 2011 then dismissals on the grounds of retirement can be effected before 30 September 2011.

If notifications of retirement due to fall after 1 October 2011 have already been notified before April 2011, because the employer has chosen to give more than the minimum 6 months notice provided by the Age Regulations, then any dismissal on the grounds of retirement after 1 October 2011 would be deemed to be invalid and the retirements in question should not take place.

Some employers have asked us how they will deal with employees after the default retirement age is abolished. We are proposing to run a workshop session to outline the processes that can be used. If you wish to pre-register for this workshop please contact Natalie Millar, Events Assistant on 01274 202 145 or at natalie.millar@gordonsllp.com.