Significant Issue With Draft Regulations Abolishing Default Retirement Age

18 February 2011

Careful reading of the draft regulations abolishing the default retirement age throws up a rather serious issue. Whether it is an error or intentional (lets hope not) the transitional provisions in the regulations (as currently drafted) provide that you cannot safely retire someone who has already reached the age of 65 by the 6th April even if you have followed the full retirement procedure. You can only safely retire someone who “attains” the age of 65 between the 6th April 2011 and the 30th September 2011.

Unless the regulations are amended before they are passed by Parliament, if you have already given notice of an intended date of retirement to an employee over the age of 65 (or your current normal retirement age) which will take effect on or after the 6th April the dismissal will be unfair and discriminatory on the grounds of age. Clearly this will be an issue for employers that have previously deferred retirement (presumably having followed the applicable procedure) and the retirement dismissal is due to take effect after 5th April.

The regulations will come into force on the 6th April. From that date:

  • retirement will no longer be a “fair reason” for dismissal;
  • the retirement procedure will cease to have effect (unless the transitional provisions apply);
  • the retirement exception in the Equality Act will cease to exist; and therefore
  • unless the transitional provisions apply (or a retirement dismissal can be objectively justified, which will be rare) dismissals after the 6th April by reason of retirement will be age discriminatory and unfair.

Transitional Provisions

The transitional provisions apply only if two conditions are met:

1. Notice of retirement has been given before 6th April 2011; and
2. The person will attain the age limit (65 or the employers normal retirement age) between 6th April and 30 September 2011.

It is a technical point – but one which will have a significant impact. It was anticipated that the regulations would provide for the transitional provisions to apply if the person attained the age of 65 (or the employers normal retirement age) by 30 September 2011. However, that is not what the draft regulations say. The provision in regulation 5(1)(b) is quite clear that the age of 65 must be attained between 6th April and 30 September 2011.

Should you have any queries please contact:

Adele Martins – [email protected]
Susan Thompson – [email protected]
Catherine Yallop – [email protected]
Moji Oyediran – [email protected]

Nicholas Stott – [email protected]