Abolition of Default Retirement Age: Transitional Provisions
We are indebted to Daniel Barnett, Employment Barrister, for alerting us to the second stab which the Government has had at drafting regulations which abolish the Default Retirement Age and more particularly deal with the transition period leading up to the regulations coming into full force. The regulations will come into effect on the 5 April 2011. There will then be a transition period until the 1 October 2011 after which the Default Retirement Age will be abolished and likewise retirement as a potentially fair reason for dismissal.
So what do the transitional provisions mean in practice?
- You can rely on the existing law to lawfully retire an employee who has reached the age of 65 or will do so by the 30 September 2011 providing that you give notice of intention to retire by the 5 April 2011.
- The last date by which an employee can exercise their right to request to work beyond retirement is the 5 January 2012.
- This date comes from the right of an employer to give 12 months notice of intention to retire on the 5 April 2011 coupled with the employee’s right under the Age Regulations to request to work beyond retirement not later than 3 months before the employer’s notice runs out.
- Remember that whilst an employee can request to work beyond retirement there is no compulsion upon an employer to grant that request. However it would be open to an employer and an employee, following a request, to agree an extension. For technical reasons (which we will explain if necessary!) that extension cannot be more than 6 months so Daniel Barnett remarks “the last possible date for retirement of an employee under the existing law seems to be the 3 October 2012”. As he explains “this would cover the employee who was given 12 months notice of intention to retire on 5 April 2011 (the last day possible) taking him to the 4 April 2012, and then given the maximum 6 month agreed extension…(going to the 3 October 2012)”.
This is the position as at the 2 March 2011.
The regulations are still draft and are going through a short form procedure in Parliament to enable them to be in force by the 5 April 2011. Please be aware, therefore, that there is the possibility of change to the draft regulations during the short form procedure although we would venture that this is not now likely.
If you do give an employee notice of retirement by the 5 April 2011 (where the employee has reached 65 or will do so by the 30 September 2011) then you should be able to force that employee to retire without facing a valid claim for unfair dismissal or discrimination. If a request to work beyond the retirement age is received you can consider granting that in exchange for requiring the employee to enter into a Compromise Agreement provided that the Compromise Agreement is carefully worded.
For advice and assistance in respect of employment matters please contact Nigel Pepper, Consultant or Patrick Nelson, Associate on 01785 211411.
22 March 2011
The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. The law may have changed since this article was published. Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances. (50587)