The UK Government has laid before Parliament a revised version of the regulations which will abolish the default retirement age, after concerns were raised by lawyers and employer groups about the wording of the original draft. Owen Warnock, partner at international law firm Eversheds, comments:
“The regulations make it unlawful for employers to compel employees to retire unless the retirement can be justified as an exceptional case not withstanding the general ban on age discrimination. Although the regulations take effect from 6 April 2011, the Government assured employers that the old rules would not simply be abolished in April but would be phased out over a six month period so that retirements already set in train before the rule change could continue to completion. However, when the draft regulations were published two weeks ago we were perturbed to see that the transitional arrangements were not as expected. Under those regulations the new regime would have applied straight away to anyone who had already reached retirement age before 6 April. The bizarre consequence would have been that employees turning 65 over the next six months could have been retired, but those already over 65 could not without risking claims of age discrimination. This would be the case even if the employer had already served a legitimate notice of retirement.
“Employers will be relieved that the Government acted swiftly to amend the proposed regulations. But although the problem with the original version of the regulations has been addressed, there is still a trap which all employers will need to take care to avoid. Employers still need to review retirement notices which have already been issued and are pending, as well as those retirement notices which are planned to be issued before 6 April. Any such notices which will lead to a retirement after 5 April need then to be checked more carefully since such a notice will not work – even if it was perfectly lawful when issued – for any employee who will not be 65 before 1 October 2011. In such a case consideration should be given to withdrawing the notice. Some employers might contemplate retiring such employees before 6 April 2011 by giving short (ie less than 6 months’) notice of retirement. However, this approach is not without risk, potentially leaving the employer open to age discrimination and/or unfair dismissal claims.”