Employment Law Update (August 2010)
Compulsory retirement to be 'retired'
On 29th July the Government announced a consultation
on proposals to abolish the compulsory retirement procedure
completely by October 2011.
What is the current position?
At present, employers can retire employees who are at or over
the age of 65 (or the employer's normal retirement age if that is
greater) by giving at least 6 months' notice and following a set
procedure. If the correct steps are followed, a retirement
dismissal is a fair reason for ending employment.
Why are changes being proposed?
The default retirement age has been criticised by campaigners
because it allows for direct discrimination because of age. The
Government has stated that stopping compulsory retirement will end
discrimination, give individuals greater choice and encourage
employers to make full use of the talent and experience of older
workers. The previous Government was already committed to
reviewing the default retirement age and it was expected that at
the very least the age at which retirement could be compulsory
would be raised to 70.
What are the new proposals?
The new proposals go much further and will mean that no new
compulsory retirement notifications can be issued from
6th April 2011. Only people who have been notified
before 6th April 2011 and whose retirement date is
before 1st October 2011 can be compulsorily retired
using the statutory retirement procedures. Some employers will be
able to continue operating compulsory retirement ages, but this
will have to be objectively justified, which is likely to be very
difficult.
Will there be additional guidance for
employers?
As part of the consultation process, which closes on
21st October 2010, views are being sought on guidance
which may be necessary to assist employers with retirement
discussions and to address potential problems with insured benefits
for older employees.
How will Mentor help me?
Between now and April 2011, Mentor will provide updated guidance
to help your business comply with this change in the law.
To keep up with the changes, simply subscribe to our
e-bulletin or log in to MentorLive.
In the mean time for on-the-spot guidance and support on this or
any other Employment Law issue, please call the Advice Service on
0800 634 7000 where a member of the team will be happy to help.