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Default retirement age

Apr 11, 2011

Employers are no longer able to use the default retirement age to compulsorily retire employees and, unless a retirement procedure was commenced on or before 5 April 2011, retirement can no longer be relied on as a potentially fair reason for dismissal.

For those employers who did give lawful notice of retirement to an employee on or before 5 April 2011, they will be able to continue with the procedure under the transitional provisions and there is some flexibility in these provisions which allows an employer to agree an extension with the employee.

Where an employer gave 12 months notice of retirement, the employer will be able to agree to an extension of up to 6 months under the employee’s ‘right to request’ to carry on working; as long as the latest date of retirement is 5 October 2012. However, where the employer gave 6 months notice of retirement, the employer will still only be able to agree an extension of up to 6 months – even if a longer extension would still result in an earlier retirement date than 5 October 2012. This is because, under the statutory procedures, where an employer agrees an extension of more than six months, it has to issue a fresh notice of intention to retire – which it now cannot do!

If an employer wants to retain a compulsory retirement age in its contract then it will have prove that this is objectively justified as being ‘a proportionate means of achieving a legitimate aim’. It will depend on the circumstances of the employer and the nature of the job in question but the general consensus is that this is unlikely to be an easy test to pass. Otherwise employers who want to dismiss an older employee will have to treat them the same as any other employee and show that they have a potentially fair reason for doing so.

Employers should also bear in mind that they can no longer refuse to recruit an employee aged 64 ½ or more. Job applicants will have to be evaluated equally, regardless of their age, unless a difference in treatment can be objectively justified.

By Kirstie Johnson, Associate Solicitor in the Employment Department, Lamb Brooks, an established legal practice for over 200 years offering a traditional service with a modern touch.

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