Retirement Update
Retirement age has been back in the news again recently following the publication of the strategy document ‘Building a Society for All Ages’ in which the Government has announced that it will bring forward its review of the default retirement age to 2010. In addition, the High Court recently heard the case commonly known as the Heyday challenge in which Age Concern is challenging the lawfulness of the Default Retirement Age.
The Statutory Retirement Procedure
On 1st October 2006, the Employment Equality (Age) Regulations introduced a national default retirement age of 65. This means in practice that employers can no longer be allowed to force someone to retire before then - unless it is objectively justified where there is a genuine occupational requirement.
The Age Regulations set out a detailed procedure that must be followed before an employee can be retired at 65. The first step is that the employer must write to the employee to inform them of the intended retirement date and advising of the employee’s right to request not to retire. This must be done at least 6 months, but no more than 12 months, before the intended retirement date.
On receipt of that letter, an employee who wishes to continue working after the intended retirement date must inform the employer of this in writing at least 3 months, but no more than 6 months, before the retirement date. The request should state whether the employee wishes to continue working indefinitely or for a set period of time.
Under the Regulations, the employer has a duty to consider all requests. The employer must either agree to the request or arrange a meeting within a reasonable period of time with the employee to discuss the request. If after the meeting the employer decides not to grant the request to continue working, they will need to inform the employee of this as soon as possible. There is no obligation on the employer to give a reason for the refusal.
Finally, the employee has the right to appeal against the refusal and the employer is required to arrange a further appeal meeting to discuss this. A failure to follow this procedure could give rise to the employee bringing a claim for unfair dismissal and / or Age Discrimination.
The government had initially committed to reviewing the default retirement age in 2011. However, this has now been brought forward to 2010 to reflect the ‘change in economic circumstances’ since the Default Retirement Age was introduced. If the Default Retirement Age is found to be no longer necessary, then any changes would not be implemented until 201to allow employers to prepare and for employees to consider their retirement plans
The Heyday challenge to the retirement age
In the case of Incorporated Trustees of the National Council on Ageing (Age Concern England) v Secretary of State for Business, Enterprise and Regulatory Reform, or the Heyday Challenge as it is more commonly known. Heyday argued that the Employment Equality (Age) Regulations discriminated against older workers by introducing a default retirement age. After a lengthy legal process in the UK, the case was referred to the European Court of Justice (ECJ) in 2007.
The ECJ gave its eagerly awaited judgement in March 2009. The Court found that the provisions of the Employment Equality (Age) Regulations 2006 SI 2006/1031 which allow compulsory retirement of workers at age 65 did fall within the scope of the Equal Treatment Framework Directive (No.2000/78). As a result the High Court must now decide whether these provisions are justified by a legitimate aim. The High Court hearing took place in July 2009, with a decision expected late summer or early autumn.
This means, for the time being, employers can still lawfully retire employees at the age of 65, as long as they follow the procedure set out above. However if the High Court rule against the Government this will clearly have repercussions for the future of the Default Retirement Age.
August 2009
This article gives a general overview only and the legal position at the time of writing this article. It cannot be relied upon in any particular case. Specific legal advice must always be considered to include consideration as to whether the legal position contained in this article has changed since going to print. For further information and advice, please contact Paul Archer or Lauren Harkin on 01793 527141 or alternatively by email on Paul.Archer@lemon-co.co.uk or Lauren.Harkin@lemon-co.co.uk.
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<p><strong><a href="http://www.lemon-co.co.uk/article_retirement-update.php">Recruitment Issues</a></strong><br />
There is no general equal opportunities law which states that businesses must follow fair procedures when taking on new employees. However, there is legal protection for job applicants who suffer discrimination based on their sex, race, disability, sexuality or religion/belief....</p>
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