Age discrimination and retirement

The Employment Equality (Age) Regulations 2006 brought in some important changes to the default age for retirement, which used to be 65. These regulations were then consolidated into the Equality Act 2010 (‘EA’). The default retirement age was phased out from 6^th April 2011 and anyone who has been dismissed after that date because of their age could be a victim of direct discrimination under the EA – unless an employer can objectively justify the decision as a proportionate means of achieving a legitimate aim. The default retirement age of 65 still applies to anyone who was given notice of retirement on 5^th April 2011 or before.

What about employers who still need to have a default retirement age?

This is only possible where the default retirement age is a proportionate means of achieving a legitimate aim. Whether the measure is in proportion will depend on a number of factors, such as whether there is an alternative that would have a less discriminatory effect, whether the employer’s aim and its positive effects outweigh the discriminatory nature of the action, and whether the aim of the retirement age actually achieves what it sets out to do.

What will constitute a legitimate aim will vary depending on the sector in which the business is operating, the company itself and the work that the employee does within that company. Safety and training requirements may be a legitimate aim, as well as business needs, and the encouragement of a friendly atmosphere, for example.

Transitional provisions

These provisions are designed to cover those retirements that fall between the old system of default retirement age and the new system where there is no default retirement age. Where the retirement did not take place within the transition dates (6^th April – 1^st October 2011) it may still be covered by the transitional provisions. For example: employers must use statutory retirement procedures under the transitional provisions. Employees can ask to continue to work after the employer has identified a retirement date and the maximum extension time that can be agreed is six months. If the maximum 12 months notice was given on 5^th April 2011, effective on 6^th April 2012, then with the six-month possible extension, a retirement date of 5^th October 2012 would still be lawful under the transition arrangements. Any retirement or retirement extension after that date could trigger a claim for unfair dismissal and discrimination.

There are a number of conditions that must have been met where the transitional provisions are being used:

– The employee was 65 (or reached whatever age the employer had set as a default retirement age) by 30^th September 2011.

– The retirement notice was issued on 5^th April 2011, or before, and was given in writing.

– Between six and 12 months notice of requirement was given.

– Statutory retirement procedures were followed.

– A fair retirement has taken place i.e. one that is effective on or after the default retirement age or the age set by the employer, and written notice has been provided of the retirement, with the possibility of the employee being able to work beyond the suggested date highlighted.

An employee who wanted to work beyond the retirement date that was provided must have requested this between three and six months before that date. Under the transitional provisions, the last date that this could have been requested was 4^th January 2012, so if such a request has not been received, the employee is not entitled to now make the request. An employer used to be able to still grant an employment extension where it was requested, as long as any extension of more than six months was accompanied by a new notice of retirement that took account of this. However, these notices are now no longer effective.