Scrapping the Default Retirement Age

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The DRA will be phased out over a transitional period ending 30th September, 2011 with the Employment Equality (Repeal of Retirement Age) Regulations 2011 being introduced from 6th April, 2011. Currently, you must write to employees between six and twelve month before their 65th birthday confirming that as they are approaching retirement age, they have the right to request to work beyond that date. From 6th April, 2011, it will no longer be possible for you to issue any notification for compulsory retirement under this process. The last date for notification of a compulsory redundancy is 5th April, 2011 and for the DRA to apply, the employee must be 65 years of age by 30th September, 2011. Employees can make a request to work beyond the retirement date as long as they make their request at least three months before the specified retirement date. Therefore, the last date an employee will be able to make such a request if the compulsory retirement is notified on 5th April, 2011, is 5th January 2012. You can agree to extend the date by up to six months without needing to issue a further notice so the last date an employee could be compulsorily retired would be 5th October, 2012. If you received a request to work beyond the DRA on 5th January, 2012 and agreed to an extension of more than six months, you would be unable to apply the compulsory redundancy procedures as no notices can be issued after 5th April, 2011. So what does all this mean to you as an employer? Subject to the transitional arrangement, from 6th April, 2011, retirement will no longer be a potentially fair reason for dismissal and you will only be able to terminate the employment of older employees fairly for one of the other statutory reasons, ie misconduct, redundancy, capability, illegality and some other substantial reasons. If you dismiss an employee because of their age, this will be direct age discrimination unless you can objectively justify maintaining a compulsory retirement age which will very difficult to do. Therefore, older employees will be able to decide when or if they want to retire. You will also no longer be able to refuse to employ applicants within six months of their 65th birthday. However, there is a new exemption in the legislation allowing employers not to have to provide insurance benefits such as private medical insurance where an employee has reached the age of 65 and this age will rise in line with the State pension age.

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