The Government is currently consulting on scrapping the default retirement age.
This follows the High Court’s decision in the Heyday case which found that the default retirement age of 65 was lawful but that there was also a compelling case for either raising it or abolishing it altogether. The proposals being consulted on will mean that after October 2011 employers will not be able to use the default retirement age to compulsorily retire employees. If they wish to use retirement ages they will have to able to demonstrate that these are objectively justified, for example, in some jobs such as the police or air traffic controllers it may be impossible to keep working past 65.
At present it is not unlawful age discrimination to dismiss someone who is 65 or over if the reason for dismissal is retirement. However retiring an employee at or above the age of 65 will be fair only if the employer has followed a set procedure:
- the employer must notify the employee in writing between six and twelve months before the intended retirement date of the employee’s retirement date and of their right to request to stay on
- between three and six months before the intended retirement date, the employee may make a written request to stay on after the intended retirement date
- the employer must normally arrange a meeting to discuss the employee’s request. The employee has the right to be accompanied at the meeting by a colleague
- the employer must notify the worker in writing of their decision as soon as is reasonably practicable but need not give a reason for the decision. The employer must also tell the worker of their right to appeal
- the employee can appeal as soon as is reasonably practicable against the employer’s refusal to allow them to stay on and the employer should normally hold a meeting with the employee to discuss the appeal within a reasonable period.
Whether or not the employer complies with their duty to notify the employee of their right to request not to retire, a worker may request to stay on beyond their retirement date. Their request may be to stay on indefinitely, for a stated period or until a stated date. The request must be in writing.
An employee may make a claim to an industrial tribunal if the employer fails to comply with the duty to notify the employee within the prescribed timescale of their intended retirement date and/or their right to request to stay on. If the employee is successful, the tribunal may award compensation of up to eight weeks’ pay. The employee should raise a grievance with their employer in the first instance.
In addition to changes to the default retirement age there are changes to the state pension age. From 6 April 2010 the state pension age for women will gradually rise to 65 so it will match the state pension age for men by 2020. This means that a woman born on or after 6 April 1950 but before 6 April 1955 will have a higher state pension age than 60 depending on when she was born. From 2024 to 2046 the state pension age for both men and women will gradually rise from 65 to 68. A man or woman born on or after 6 April 1959 but before 6 April 1978 will have a higher state pension age than 65 depending on when they were born.
Further information on the procedure for retirement and on the changes to the state pension age is available from your local CAB. A copy of the consultation document on the default retirement age can be found on the Department for Business, Innovation and Skills website at www.bis.gov.uk/retirement-age and the closing date for comments is 21st October 2010. Further information on the changes to state pension age and its implications is available on www.nidirect.gov.uk which has a state pension age calculator and state pension profiler tool.
Siobhan Harding is an Information & Policy Officer with Citizens Advice