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).
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.
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