Retirement dismissals: What now?
Whilst most employers will be aware that the default retirement age of 65 is to be abolished in April 2011 and that they will no longer be able to compulsorily retire employees, there is a general lack of understanding as to what an employer’s obligations are in respect of older employees in the absence of the default retirement age.
From 6 April 2011 it will be unlawful to dismiss an employee for reasons of retirement. Any dismissal for purported reason of retirement after this date will constitute direct discrimination unless an employer can objectively justify the dismissal as a means to achieve a legitimate aim. Under the transitional provisions, employees can still be compulsorily retired under the old procedure provided that notice of the retirement has been issued on or before 5 April 2011 and that the employee is, or will be, 65 by 30 September 2011.
In the future the decision to retire or not will rest solely with the employee. Employers will not be able to compulsorily retire any employee unless they can objectively justify the dismissal on the grounds of their age. As to whether such an objective justification is reasonable can only be determined on a case by case basis following the examination of the facts.
In reality, employers have a choice to either abolish any existing fixed retirement age altogether (and this may entail making changes to the organisation’s contracts of employment), or continue to enforce a fixed retirement age but accept that they must justify as to why it is reasonable for employees to retire at that age. The latter is of course the riskier option as employers will face the possibility of a claim of age discrimination if they are unable to demonstrate to an Employment Tribunal that dismissing older employees is the only way their business can achieve a legitimate aim.
Partner and Head of Employment
Employment Law
PKelly@LawBlacks.com
0113 227 9249
@PaulLawBlacks
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Paul Kelly
