The end of compulsory retirement?
The Government has recently announced that it plans to abolish the default retirement age (65) with effect from October 2011.
A transitional period is proposed, so that retirement processes that will have been initiated by 6 April 2011 can continue through to completion provided that the date of retirement falls before 1 October 2011. Notification of retirement has to be issued by the employer before 6 April 2011 and the requirements of the current statutory procedure must be met. But, after 6 April 2011, all compulsory retirements will cease completely.
A period of consultation is underway on the practicalities of the decision, but not the decision itself. The decision was reached following pressure from the European Court of Justice regarding the legality of the statutory retirement age. By making this decision, the Government is simply meeting its obligations under the European rules on age discrimination.
What it does mean in reality is that employers are very unlikely to be able to objectively justify a compulsory retirement age without the backing of legislation. It will mean that the only avenues open to employers for terminating employment will be the five acceptable reasons for dismissal, the most likely of which will be conduct and capability.
Whilst there are significant benefits to each person being treated as an individual with regard to their performance and capability, this decision takes away the opportunity to 'retire' people on positive terms, particularly after long periods of service.
If you would like more information on what this decision means in practice, give the HR team at CHaRM a call on 0115 984 3119.
