Retirement Age Changes due in April 2011

March 2011

The default retirement age (DRA) of 65 will be removed on 1 October 2011, with a six-month transitional period from 6 April 2011 to allow the default retirement age of 65 and the statutory retirement procedure to be phased out.

From 6 April 2011, employers will be prohibited from issuing new notifications for compulsory retirement using this statutory retirement process. Only employees who were notified of their retirement date before 6 April and whose retirement date is on or before 30 September 2011 can be compulsorily retired by using the full statutory retirement procedures.

After 1 October 2011, there will no longer be a DRA and employers can only continue to prescribe a compulsory retirement age when they can justify it as a proportionate means of achieving a legitimate aim. The Department for Business, Information and Skills (BIS) gives air traffic controllers and police officers as possible examples where having a retirement age could be justified.

If an employer wants to retire someone after 1 October 2011, the employer will have to show any decision to retire an employee can be objectively justified. Accordingly, in making any decision to retire someone and in the absence of a compulsory retirement age, the employer will have to follow a fair procedure under the ordinary unfair dismissal rules and there will have to be a potentially fair reason for the dismissal such as capability, conduct, or redundancy.

Following the removal of the default retirement age, employers will have to decide if they are not going to set a compulsory retirement age or if they consider that a compulsory retirement age can be justified as a proportionate means of achieving a legitimate aim. Any retirement clauses in employment contracts will have to be amended accordingly.

To reflect these changes, Simply-docs has added the following to the site:
- Guidance on Handling Retirements. This includes a clause which can be used in contracts where the employer believes a compulsory retirement age can be objectively justified.
- Specially adapted deeds of variation are available which should be used 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

Simply-docs will be adding some appropriate Retirement Policies to the site ready for the new changes coming into force.

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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