Default Retirement Age – Do you need to take Action Now!!
Default Retirement Age Do you need to take Action Now!!
As everyone will be aware the Government has announced that the Default Retirement Age (DRA) is to be abolished with effect from 1st October 2011. Some employers welcome the idea because it retains skilled and experienced employees in the business; others are worried because these employees may not be as robust and effective as those below the DRA.
So what does this mean to the employer?
Most importantly after that date you will no longer be able to issue a Compulsory Retirement Notice and to terminate the employment of an employee because they are 65 years old or over will be unfair. All terminations of employment have to be done fairly, which means that if you wish to terminate the employment of someone over 65 you will need to go through a full consultation process and show that the employee is no longer capable of doing the job and that there is a sound Business reason for your decision.
It is essential that all employers follow a fair procedure. Failure to do so could put you in breach of the Equality Act and result in a claim of unfair dismissal.
We are now in a transitional period the current legislation requires that employers will consult with employees who are approaching the DRA. This must be done at least six months before they reach 65, therefore if you are currently employing people over 65 or who will be 65 on or before 1st October next year you must begin consultation no later than 31st March 2011 if it is your intention to enforce the DRA. Failure to do so and to enforce retirement will be Unfair Dismissal on the grounds of Age Discrimination.
Employers should not avoid facing up to these changes. If you have any concerns or wish to seek advice contact Bob Cox, Ward Goodman's HR Consultant.