The Default Retirement Age (‘DRA’) of 65 for both men and women is being abolished in 2011. All employers need to be aware of this change as it will have a substantial impact on how they deal with staff reaching the age of 65.
The following extract is taken from ACAS guidance:
“The default retirement age (DRA) is being phased out over a transitional period running until 30 September 2011. Details will be set out in Regulations coming into force on 6 April 2011. The last date on which an employee can be given notice of retirement under the DRA is 5 April 2011. Under the DRA employers must give a minimum of six months’ notice of retirement but no more than 12 months’ notice. Retirements notified on or before 5 April 2011 can continue through to completion provided that the following conditions are met:
- the DRA procedure, as set out in the previous Employment Equality (Age) Regulations 2006, is followed correctly (including the employee’s right to request to stay on is given serious consideration by the employer); and
- the person retiring reaches 65 or the normal retirement age (if this is higher) before 1 October 2011. Therefore an employee must be 65 by 30 September if they are to be retired using the DRA.
Employers will not be able to issue notifications of retirement using the DRA after 5 April 2011. The provision allowing short (two weeks’) notice of retirement, will also be repealed on 6 April 2011, and such short notice notifications will not be permitted on or after this date. For employer-justified retirement ages, all notifications made prior to 6 April 2011 will continue to be valid, and there is no reason to curtail any notifications made under the former DRA arrangements prior to that date.”
If you have staff who are 65 or approaching 65 and you wish them to retire, contact us now on 01245 893400 to discuss your options. Remember, 5 April 2011 is the last day that notice of retirement can be given.
Once the dust has settled on the transitional arrangements, the only ways to “retire” older staff will be:
- to objectively justify doing so on the grounds of some exceptional circumstances such as a need for extreme mental or physical fitness – this will undoubtedly be difficult to prove
- to follow a performance management procedure in the same way as any other underperforming member of staff. Not only will this be unpleasant if the staff member has been with you for a long time, but unless done “by the book” it will leave you open to claims of unfair dismissal
To discuss any of the issues raised above, please contact 01245 893400 and ask to speak to one of expert employment solicitors.