19/01/2010

The end could be in sight for compulsory retirement after the Government opted to bring forward its review of the area to 2010.

Regulations introduced in 2006 make it illegal for employers to discriminate against their employees on the grounds of age. Amongst other things this prohibits an employer from dismissing an employee on the grounds of age. An exception to this rule is that employers are allowed to retire employees aged 65 or over.

Employers are, however, required to follow a set procedure before compulsorily retiring an employee. The employee must be written to between 6 and 12 months before the intended retirement date, which can be any date after their 65th birthday. The employee can then apply to continue working and the employer must hold a meeting at which to consider the request. After the meeting the employee must be given written notice of the decision, and a right of appeal.

The key point regarding the current procedure is that an employer cannot be forced to retain the employee. As long as the correct procedure is followed the decision of the employer cannot be questioned.

The exception contained in the 2006 Regulations was challenged by Heyday, a group connected to Age Concern, immediately upon them coming in to force. Heyday argued that employees should not be forced to retire at any age unless certain grounds could be established. The Heyday argument would have left employers facing expensive discrimination claims for compulsorily retiring employees, and the CBI has estimated that the proportion of employees working past the age of 65 rose to 33% last year in consequence of the uncertainty caused by the case.

The Heyday challenge has now failed, but in response the Government has brought forward its intended review of the area to 2010. Although no indication has been given of outcome of the review many employers believe the end is in sight for the retirement rules as they stand. Employers wishing to retire their older employees should therefore seriously consider doing so before it is too late.

If you wish advice and assistance to any employment matters please contact Jane Liddle on 01603 610481.