Employment: Government brings forward review of default retirement age

January 9, 2009

The government has announced that the review of the default retirement age (“DRA”), originally scheduled for 2011, will be brought forward to 2010. It is expected that any changes to the DRA will not be implemented until 2011.

At present provided employers follows a prescribed procedure an employee who has reached age 65 can be dismissed by reason of retirement without such treatment amounting to unlawful discrimination.

Although the government has said that the review of the DRA was brought forward to reflect the economic climate and an increasingly aged population, it was doubtless also influenced by a legal challenge of the DRA in the so-called “Heyday” case (see related article link below).

Comment

Company performance management procedures can be time-consuming and when a poor performer is close to retirement the temptation to date has been to let matters lie in the knowledge that they can be terminated at 65 without repercussions. If the DRA is increased or scrapped altogether employers will no longer be able to count on poor performers leaving as a matter of course when they reach 65 have to follow the same disciplinary and capability procedures that apply to the rest of the workforce if they wish to dismiss older workers.

Resources

Building a Society for All Ages strategy document

High Court rules default retirement age of 65 is lawful

Equality Bill 2009 – a wide-ranging reform of discrimination legislation

For further information or to discuss the issues raised, please contact Colina Greenway (colina.greenway@abbisscadres.com) on +44 (0) 203 051 5711.

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Category:

Employment/Labor law

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