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Compulsory retirement to be gone by October 2011

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It seems very unlikely that compulsory retirement will be with us for very much longer as earlier this summer the Government announced proposals to phase out the default-retirement age. At present, the Employment Equality (Age) Regulations 2006 allows an employer to compulsory retire an employee upon reaching the age of 65 (the default-retirement age (DRA)), so long as the statutory procedure is followed. In those circumstances an employer will be protected from a claim for unfair dismissal due to age discrimination. An employer may begin the process for compulsory retirement by serving on the employee notice specifying the intended retirement date. This notice must be at least 6 months but not more than 12 months in advance of the specified date of retirement which be before the employee's 65th birthday. This is all set to change over the next year; the phasing out of the DRA will begin on 6 April 2011, after which no employer will be able to issue any new notifications of retirement. If an employee has been given notification of their retirement date prior to 6 April 2011 then the retirement must take place by 1 October 2011. From 1 October 2011 the DRA will be completely abolished and although employers will still be able to dismiss older employees, such dismissals will only be lawful if they can be 'objectively justified' under discriminatory legislation. These proposed changes have been met with delight by anti-ageism groups which claim that the current system is dated and unfair. Certainly it is fair to comment that with people living longer and healthier lives and staying fitter for longer, there is no reason that older people should not be considered able to make valuable contributions to the work environment due to their age. If one was to take a more cynical look at the actions of the government it could be conceived that there is more to this decision than simply rectifying a rule that is out of date and out of line with current discrimination laws. The emerging budget crisis faced by the government leads one to suspect that a reduction of the costs of state pensions would not go amiss; one solution is to make pension funding an individual concern. Obviously, faced with the prospect of funding their own retirement many people will not be able to afford to retire at the age of 65 and thus the removal of the DRA would be an astute development at this time. It is by no means certain that the regulations will change, but in bringing forward the proposed review of the law originally planned for next year the government has given a clear indication as to its intentions to amend the current rules. • For additional information please contact: Alexandra Dean of Gepp & Sons. The above is not legal advice; it is intended to provide information of general interest about current legal issues.