Will you still need me when I'm 64-plus?
PUBLISHED: 10:00 28 July 2009 | UPDATED: 09:43 15 March 2010
Andrew West, employment partner at Gotelee & Goldsmith, explains how further change could be on the way in respect of the retirement age.
Andrew West, employment partner at Gotelee & Goldsmith, explains how further change could be on the way in respect of the retirement age
SINCE October 1, 2006, it has been unlawful to discriminate against employees or workers on grounds of their age.
The legislation does provide for a default retirement age of 65 and a procedure which allows an employer to retire an employee on or after his or her 65th birthday.
A review of the default retirement age is to be brought forward by a year, the Government announced earlier this month.
Ministers had previously pledged to look again at the measure in 2011, but it will now be held next year to respond to “changing demographic and economic circumstances.”
Pensions minister Angela Eagle said most people retired before 65, but 1.3 million chose to work beyond state pension age and many more said they would work past 65 if their employer permitted it. The minister said it was time to look again at the default retirement age:
“Some people prefer to take early retirement, others prefer to keep working. We want to give older people flexible retirement options,” she said.
Whilst the Government has said that no decisions have been made to end the use of the default retirement age, by bringing forward the review and hinting at more flexible retirement options, it does seems most likely that it will be scrapped.
If it is, then employers would no longer be able to retire staff compulsorily at the age of 65 without fear of an age discrimination claim being presented and the possibility of an unlimited payout, if they cannot justify their decision. Succession planning might be considered a justifiable reason to retire, but the employer would have to prove this, which is not going to be easy in every case.
For the time being, employers can still compulsorily retire employees on or after their 65th birthday, providing a set procedure is used. If they do, employers should bear in mind that there is an ongoing court case (the Heyday case) which, if successful, could yet decide that this practice is discriminatory.
When retiring, you should consider if there are reasons which would allow you to justify your decision. If you cannot show a legitimate business reason (for example to allow for succession planning), the inference could be that you retired simply because of the individual's age. If the ability to compel retirement at 65 and over is repealed, this will no longer be lawful.
To discuss this or any other employment law issue contact Andrew West on 01473 298118 or email email@example.com