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Changes to Retirement Law

Under current legislation there is a default retirement age of 65. This means that employers may retire their employees once they reach this age and not face a claim for age discrimination or unfair dismissal as long as the statutory retirement procedure has been followed correctly

If an employer wishes to retire an employee who is less than 65, they will need to show that this is objectively justified.

The employer must give the employee notification of the intended retirement date at least 6 months and no more than 12 months before the due date. However the employee can request not to be retired, which should be made between 3 and 6 months before the intended retirement date. Then the employer must convene a meeting with the employee to consider the request and the employer should notify the employee in writing of the outcome. If the employee wishes they then have a right of appeal.

Each request should be considered on a case by case basis, but if the above procedure is followed then the employee will not be able to raise a claim for unfair dismissal, as the employee cannot challenge the reason for dismissal. This means that dates are very important. If the employer does not give the employee appropriate notification of the intended retirement date, then the employee may be awarded up to 8 weeks pay.

Planned Retirement Law Changes

In July 2010, the Government announced that it is planning to scrap the default retirement age in the UK from October 2011 and has launched a consultation process about scrapping the rule.

Under the plans, no forced retirement notices could be issued after 6 April 2011- six months before the October change.

Once the proposals are finalised, employers will need to identify employees turning 65 before 1 October 2011 and remember to issue notices of intended retirement before 6 April 2011. Employers should start to consider whether they will continue to use a retirement age (and in particular how they would justify this) after October 2011. They may also need to seek advice on possible changes to benefit schemes where the cost may be substantially increased by including older employees.

If you need advice on any retirement law issues please ring the Hattons Commercial Law team on 08000 111 303 or fill in the Call Back Request form to the right of this screen.

The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. The law may have changed since this article was published. Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances.

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