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Retirement Policy with employer justified retirement age.

April 2011

Simply-docs has created a new Retirement Policy for companies with an employer-justified retirement age for all staff.

The changes to the statutory provisions on retirement dismissals which came into effect on 6 April 2011 under the Employment Equality (Repeal of Retirement Age Provisions) Regulations 2011 abolished the default retirement age (DRA) of 65 for new retirements.  The notification procedures for retirement under the default retirement age and the statutory right to request to continue working beyond the default retirement age were also abolished at the same time.  Only employees who reach the age of 65 on or before 30 September 2011 and who were notified of their retirement on or before 5 April 2011 can be retired under the statutory procedures.   

This means that it will now not be possible to retire employees once they reach the age of 65 unless their retirement can be objectively justified as a proportionate means of achieving a legitimate aim. In practice, it is likely to be very difficult for most companies to objectively justify a compulsory retirement age; the Department of Business, Information and Skills (BIS) gives air-traffic controllers and police officers as possible examples of where having a retirement age could be justified.

Last month, Simply Docs provided a standard retirement policy for companies operating without a compulsory retirement age.  This month, we have added this Retirement Policy for companies with an objectively–justified retirement age for all staff. A Retirement Policy will follow shortly for companies which operate an employer-justified retirement age for some roles but otherwise do not use a compulsory retirement age. 

Any retirement clauses in employment contracts will also have to be amended accordingly. The Guidance on Handling Retirements includes a template clause which could be used in employment contracts where the employer believes a compulsory retirement age can be objectively justified. There are also specially adapted deeds of variation available, which can be further adapted with the relevant clause you have chosen, to advise existing staff of the change to their terms and conditions of employment following this change to the DRA:

Deed of Variation – Retirement Clause

Deed of Variation – Simply-Docs Retirement Clause.

The contents of this Newsletter are for reference purposes only and do not constitute legal advice. Independent legal advice should be sought in relation to any specific legal matter.

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