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Employment – Default retirement age abolished

With the decision never in doubt, the Government announced that the default retirement age will be abolished from 1 October 2011. Also abolished is the notification process of retirement to the employee at least 6 months prior to the retirement as well as the employee’s right to request to continue working.

This announcement follows a period of consultation when the Government received over 600 responses, ranging from individuals, companies and representative bodies. The Head of Clarke Willmott’s Birmingham Employment team was involved in writing the response from the ELA, the national representative body for employment lawyers.

Having listened to all the representations, after 1 October 2011, an employer will be still be able to dismiss an employee who is 65 or older. However this will be an act of discrimination unless the employer can objectively justify the dismissal.

Effectively it will be too late after 30 March 2011 to give notice of retirement to any current employee who is 65 or older.

The Government has announced that there will not be a statutory procedure which employers must follow when liaising with older employees about their future plans. In its desire for ‘light touch regulation’, the Government want employers to adopt the ACAS guidance on best practice to be adopted by business. They disliked the concept of the statutory code because it would not be ‘flexible enough’ for all the different size of employers in the UK.

Clarke Willmott is advising many clients on how they should adapt to the new rules on older workers and age discrimination. Far more emphasis will be put on appraisal systems to provide evidence to justify dismissal of older employees and more generally, Tribunals will find themselves scrutinising in more detail an employer’s performance management procedures when faced with unhappy employees.

If you wish to discuss your procedures, need to make a decision about an older employee before 30 March 2011, or would like to know how the new rules will impact on you, please contact a member of our national Employment team.