Changes to Retirement Legislation

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The law which allows employers to retire their employees at 65, the default retirement age, without giving reason, will be removed on 1 October 2011.  Employers will no be longer able to dismiss staff just because they have reached the age of 65.

The move is one of a series that aims to encourage people to work longer to manage Britain’s changing demographic profile and pensions shortfall.

From 6 April 2011, employers were prohibited from issuing any further notifications to retire employees under the statutory retirement process. Only employees who were notified of their retirement date before 6 April 2011, and whose retirement date is on or before 30 September 2011, can be compulsorily retired using the statutory procedure.  Of course, this does not prevent you retiring yourself!

Individual employers will still be able to operate a compulsory retirement age providing they can ‘objectively justify’ it. This might apply to employees who can no longer perform the full functions of their job due to their age. However commentators have suggested that this test is likely to be a difficult one to pass and will be applied in few circumstances. Therefore, you should consider amending the retirement clauses in employment contracts and employee handbooks to reflect the changes to the law.

Last reviewed 26/9/2011

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