Until 2011 your employment could end legally at 65 with your retirement – this was called the default retirement age (DRA). This is to be abolished during 2011 – we’ve got all the details you need.
The default retirement age (DRA) of 65 will be abolished by 1st October 2011, which means that your Employer can no long retire you through these means (the DRA) after this date. Employers will no longer be able to have a fixed compulsory retirement age unless they can justify doing so (see details below). You can of course choose to resign, voluntarily, at age 65 (or any other age) or you can continue working past 65.
There is a 6 month ‘transitional’ period from 6th April 2011 which means that:
- New notifications of retirement cannot be issued by your Employer under the DRA after 6th April 2011, that will be legally valid.
- If Employers have issued the 6 months notice of retirement before 6th April 2011, and as long as the date of retirement is before 1st October 2011, and the age of 65 has been reached between the dates of 6th April and 30th September 2011 (or the Employers normal retirement age if this is higher) then these retirements will be valid.
Prior to the change, there was a statutory retirement procedure that needed to be followed to make this type of retirement ‘dismissal’ fair. This statutory procedure is to be scrapped also and Employers, if they wish to retire an Employee, will need to follow a fair procedure under normal ‘unfair dismissal’ rules and use one of the potentially ‘fair’ reasons for dismissal to end the employment of someone who is aged 65 (read more information on this in our Guide to How Your Employment Can End). If procedures are not followed correctly, Employers could face an unfair dismissal claim from the Employee and an age discrimination claim.
Employers will now be able to choose whether to operate a compulsory retirement age – as long as they can justify this – or can stop using a compulsory retirement age altogether and deal with each individual approaching 65 individually. Employers must make sure that any reference to compulsory retirement must be amended in their contracts or staff handbooks to reflect their new position.
To justify a compulsory retirement age an Employer must be able to show that it is a proportionate means of achieving a legitimate aim. An aim can be ‘legitimate’ if it is related to:
- Economic factors such as the needs of running a business
- The health, welfare and safety of the individual to be retired or
- The particular training requirements of the job.
‘Proportionate’ could mean that:
- What the employer is doing is actually achieving its aim
- The discriminatory effect would be significantly outweighed by the importance and benefits of the aim and
- The Employer should have no reasonable alternative to the action that they are taking.
There has been much criticism and confusion about the transitional arrangements and as more information becomes available we will update this Guide.
Please note that the advice given on this website and by our Advisors is guidance only and cannot be taken as an authoritative interpretation of the law. It can also not be seen as specific advice for individual cases. Please also note that there are differences in legislation in Northern Ireland.