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What is the Default Retirement Age (DRA)?
Currently the DRA is 65 years. However, as most businesses will no doubt be aware due to recent media coverage of the 'Heyday' challenge, the DRA's days are numbered.
The High Court in the 'Heyday' challenge ruled that the current DRA was lawful, for now. Nonetheless they were of the view that there was a persuasive case for the DRA to be increased and suggestive comments from the High Court led us to believe that the DRA should not remain at 65 for much longer.
Whilst the DRA remains lawful for the time being, the Equality and Human Rights Commission has requested that the Government seek to abolish the DRA. This contentious issue is shortly to be debated in the House of Lords bringing forward the intended review of the policy in 2010.
What does this mean for the Employer?
The above ruling means it is still lawful to require an employee to retire at 65 provided the correct procedures are followed.
What is the correct procedure?
Employers must provide the employee with at least 6 months, but not more than 12 months, written notice of the date they intend to retire them.
The employee has the right to request to work beyond the intended date of retirement following which the employer must hold a meeting with them and notify the employee of its decision in writing (although employers are not obliged to provide the employee with their reasons for rejecting such a request, but the right of appeal against the decision must be provided).
According to the Confederation of British Industries (CBI), 81% of employees' requests to work beyond retirement are granted.
What are the implications for failing to follow procedure?
Not only could the employee bring a claim for unfair dismissal, they could also bring a stand alone claim under the Employment Equality (Age) Regulations 2006, which carries an award of up to 8 weeks pay for failure to comply with the procedure.
In the near future it is more than likely that we will see the DRA rise to 68 or 70.
Watch this space....
For more information call Employment Law Advisory Services on 0161 785 2000 or visit www.employment-law.uk.com
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