In July this year the Government published its plans to abolish the default retirement age (DRA) with effect from 1 October 2011. After the DRA disappears, employers who continue to retire employees will risk age discrimination and unfair dismissal claims. A Longleat spokesman denied the move was anything to do with the law change. In light of the timing, this seems unlikely.
Under the current legal framework, employers must give at least six months' notice to retire employees. The DRA will be phased out from 6 April 2011 and no valid notices of retirement can be given after that date. Notices given before 6 April 2011 will only be valid if the retirement takes place before 1 October 2011.
After the abolition of the DRA, employers will be left with two choices: to stop using retirement ages altogether; or continue to use retirement ages, but only where there is – what the Government is now referring to as – an "employer justified retirement age" (EJRA). Employers will not be able to defend any claims for age discrimination or unfair dismissal, unless they have an EJRA. An EJRA must be objectively justified by reference to a genuine business need (such as internal workforce planning). To rely on an EJRA, employers will need to explain and provide evidence to support the reason for having a retirement age at all, as well as the age that is chosen, and will also have to tolerate the uncertainty of not knowing whether the EJRA can be justified until tested at Employment Tribunal. For many employers, who have roles without a clear career path and where there is limited data to support health and safety concerns in some industries, we anticipate that employers will move away from an EJRA.
The consultation document setting out the plans to abolish the DRA invited comments on the consequences for employers, for example, whether the statutory retirement procedures, including the right to request to work past retirement age, should also be abolished. The consultation closed on 21 October 2010. The Government intended to publish its response to contributions in November but due to the volume of responses this has now changed to the end of December. ACAS is also revising its guidance on retirement, and this will be published in January.
What has happened at Longleat is no doubt precisely what the proposals to abolish the DRA were designed to avoid. A statement from Longleat said that it was undergoing a "modernisation programme" and that is was "inevitable that we require people with new diverse skills and experience from a variety of backgrounds." Whatever an employer’s reason for retiring older staff, employers should be acting now if this is something they wish to do given the forthcoming changes in the law. Once the DRA is abolished, employers may find it difficult to establish an EJRA, and the prospect of being one of the first test cases (in which the Courts will decide what can amount to an EJRA) is unlikely to be appealing for most".
Helen Samuel is an associate at Addleshaw Goddard LLP
