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Government plans to scrap the Default Retirement Age starting April 2011

Government plans to scrap the Default Retirement Age starting April 2011
Monday, 09 August 2010 23:00

On the 29th July the government published its "Phasing out the Default Retirement Age" consultation. In its proposals the DRA will be abolished over a 6 month period commencing April next year.

Under the proposal from October 2011 it will no longer be legal to make employees leave an organisation just because they have reached the age of 65. You can find the detailed documents at  Phasing out the Default Retirement Age consultation

However, there is light at the end of the tunnel for those employers  concerned at the implication of no longer being able to issue compulsory retirement notifications. The law will still say that age discrimination will be legal if it can be 'objectively justified'. This was a finding in a recent Court of Appeal ruling on the Seldon case.

Tom Flanagan, employment law expert at Pinsent Masons said "An employer can still justify a mandatory retirement age and use justifications like wanting to balance the workforce and provide opportunities for younger employees."The Court of Appeal's ruling sets not that difficult a test, it is not particularly stringent."

Mr Flanagan said that the Court of Appeal's ruling outlined what a company's compulsory retirement must look like to meet the objective justification requirement of the law. He said that the requirements laid down by the Court are not as stringent as might have been expected.

"The Seldon case actually established that you can justify a retirement age and can do it on the basis of wanting a balanced workforce, to create opportunities for younger employees," he said. "The European Court of Justice had said in an earlier case that compulsory retirement schemes had to have legitimate policy objectives, but the Court of Appeal said that this was a Government issue, not a test that private employers needed to satisfy."

Richard Rowell, Managing Director at Dataplan Payroll Limited commented If you have employees nearing their Default Retirement Age you will need to monitor the progress of these proposals and be prepared to take further HR advice. The implication of the Court of Appeal ruling could be far reaching.

Having to go through a performance management process at the end of everyone's working career is an unsatisfactory situation for employers and employees. No doubt there will be further changes and we fully expect that employment contracts will need to be reviewed and amended once the proposals become final

The consultation on the new proposals closes on the 21 October 2010

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