Statutory default retirement age and related provisions repealedFriday, April 8th, 2011
Amendments to the Equality Act and the Employment Rights Act repeal fair dismissal and lawful age discrimination for employees reaching age 65.
In October 2006, provision was made by means of the Employment Equality (Age) Regulations 2006 for a default retirement age (DRA) of 65, which could be relied on by employers, if they wished, to dismiss employees fairly at age 65 (or at a higher normal retirement age) on the grounds of retirement. These provisions were inserted into the Employment Rights Act 1996.
For a dismissal to be fair, the 2006 Regulations also introduced formal procedures – referred to as the “DRA procedures” below – namely, the statutory right for individuals to be given at least six months’ notice of retirement and to request postponement of retirement beyond the age of 65 – requests which the employer had to consider seriously.
However, the 2006 Regulations allowed employers to refuse a request to postpone retirement at age 65, after following the specified procedures, without providing written reasons. There was no provision for appealing to an employment tribunal against the employer’s decision to refuse a request not to retire.
The ability of employers to enforce retirement despite an employee’s wishes to continue in employment led to a challenge of the rules by Age Concern in 2007 and a referral by the High Court to the European Court of Justice (ECJ). The judgement by the ECJ in 2009 was that the rules were not inconsistent with the European Equal Treatment Directive but that the High Court must decide whether or not the rules could be justified objectively. That was followed promptly by an announcement by the government of the time that the use of the default retirement age would be reviewed in 2010.
The current Coalition government quickly made its own views known by publishing a consultation document proposing complete abolition of the DRA by October 2011.
By this time, the Equality Act 2010 had been enacted, consolidating all of the existing discrimination legislation, including the Employment Equality (Age) Regulations 2006. However, the “DRA procedures” were not consolidated into the Equality Act but remained in what was left of the 2006 Regulations.
Following that consultation, the Department for Business, Innovation and Skills (BIS) confirmed on 13 January 2011 that the DRA would be abolished completely in stages during 2011. The necessary repeals and amendments to the legislation have now been made by means of the Employment Equality (Repeal of Retirement Age Provisions) Regulations 2011 and by equivalent Regulations in Northern Ireland. They came into force on 6 April 2011 and make the following changes.
- In the Equality Act 2010:
- The exception to age discrimination that allowed dismissal for retirement not be treated as age discrimination is removed. Dismissal for retirement is now age discrimination.
However, removal of the default retirement age does not prevent employers continuing to enforce retirement at a set age if they are able to demonstrate that they are objectively justified as “a proportionate means of achieving a legitimate aim”. Examples given by BIS of jobs where retirement ages are likely to be retained are air traffic controllers and police officers.
- The exception to age discrimination that allowed job applicants to be rejected on the basis that they were over age 65 or within six months of age 65 is removed. It is now discriminatory for a job applicant’s age to be a consideration in the recruitment process.
- A new exception to age discrimination is introduced for insurance or related financial services (e.g. income protection, life assurance, sickness and accident insurance, including private medical cover) provided for employees by making it lawful for insurance providers to stop providing cover for employees aged 65 or over. However, this age limit will change in line with increases to the State Pension age, initially to age 66 during the period November 2018 to April 2020.
- All of the provisions that make retirement a fair reason for dismissal are removed.
However, this does not mean that employers are obliged to retain older workers indefinitely. All of the potentially fair reasons for dismissal apply irrespective of age, namely capability or qualifications, conduct, redundancy, statutory duty or restriction, or some other substantial reason.
- All of the provisions supporting the “DRA procedures”, i.e. tribunal rights and awards, are removed.
- The “DRA procedures” are removed in their entirety.
- From 6 April 2011, employers will not be able to issue any notifications for compulsory retirement using the “DRA procedures”.
- Between 6 April and 1 October 2011, only people who (1) were notified before 6 April, and (2) have a retirement date before 1 October, can be compulsorily retired using the DRA procedures.
- From 1 October 2011, employers will not be able to use the DRA procedures to compulsorily retire employees.