The Government has confirmed that the Default Retirement Age (DRA) of 65 will be phased out from 6 April 2011, with complete abolition on 1 October 2011. The Government has worked with Acas to produce comprehensive guidance to help businesses adapt to the change.
From 6 April 2011, employers will no longer be able to issue compulsory retirement notifications using the DRA procedure. Between 6 April and 1 October, only people who were notified before 6 April, and whose retirement date is before 1 October, can be compulsorily retired using the DRA. After 1 October, employers can no longer use the DRA to compulsorily retire employees. Employers will only be able to operate a compulsory retirement policy if it can be objectively justified.
As employers are required to give six months’ notice of compulsory retirement, any notifications given after 30 March but before 6 April will be on a ‘short notice’ basis. While ‘short notice’ of at least two weeks is allowed under the current scheme, an employee may be able to claim compensation.
The Government has also stated that it will introduce an exception so that employers can stop offering employees insured benefits, such as life assurance and private medical cover, beyond their normal retirement ages after concern was expressed at the cost of providing such benefits to an aging workforce.
For more information regarding this issue or advice and assistance on handling employment issues please contact our Employment team on 0844 391 5866 or click on the links below for further information:
ACAS Guide – Working without the default retirement age
BIS – Phasing out the default retirement age