The Default Retirement Age is Retired

Wed, 27 Apr 2011

This month sees the implementation of arguably the most wide reaching development in the arena of age discrimination since the Age Discrimination Regulations were first implemented in 2006: the default retirement age (DRA) has, from the 6th April 2011, been scrapped.
 
By Fatim Kurji
It is no longer lawful for employers to apply a compulsory age at which an employee is retired without objective justification. The common practice of simply expecting employees to cease employment at the stroke of midnight on their 65th birthdays will no longer be allowed, and employers will not be able to terminate employment on the basis of age alone. The exception to this is where a DRA can be objectively justified, but – as discussed below – the circumstances when this might apply are few and far between.
 
There is no upper age limit for employees bringing claims for unfair dismissal, and this new amendment now streamlines the age discrimination regulations to this position. For the hundreds of thousands of employees turning 65 this year, the new rules provide welcome relief: many will be forced to work beyond their anticipated retirement age in light of the tough economic climate, and the option to stay in their current employment will provide much comfort. For an increasingly ageing population, 65 often seems to be an arbitrary imposition of the cessation of labour; allowing employees to continue working will provide a much needed boost to the economy and will also enable the pension shortfall to begin to be addressed. 
 
Of the new legislation, Brendan Barber (TUC General Secretary) said: “Scrapping the default retirement age is a welcome move by the government. It cannot be right that workers lose their protection against arbitrary dismissal overnight upon reaching 65”.
 
Employers wary of the new laws need not be too concerned: for those who used the DRA as a gentle method of removing employees who are no longer up to the job, they need only turn to s98(2)(a) of the Employment Rights Act 1996 which still retains capability as a fair reason for dismissal. The real change, however, must occur in the mindset of these employers: it is no longer acceptable to assume that employees are no longer capable at age 65; they must be able to show lack of capability. It’s perhaps an opportune moment for capability procedures to be brought up to date.
 
There is also some suggestion that the DRA may still creep in through the back door in the disguise of objective justification amounting to Some Other Substantial Reason. But this writer is finding it difficult to anticipate scenarios when a DRA will be objectively justifiable. Certainly, the justification will have to be based on real and cogent evidence, and whilst the Department of Business has mused that air traffic controllers and policemen might fall into this exception (a view that gets some support from European case law, although undoubtedly formed on the back of social policy reflected in statutory provisions), it would seem to me to be prudent to consider scenarios on a case by case basis – and rely on capability over objective justification – rather than applying a DRA. It might be a little more cumbersome, but in the long run less costly than arguing objective justification before Tribunals up and down the country.
 
As the law currently stands, between now and 1st October 2011 only those employees who were told before 6th April 2011, and who are due to retire before 1st October 2011, can be compulsorily retired using DRA.
 

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