Introduction

On 13 January 2011, the Government published its response to the recent consultation exercise on the default retirement age (DRA), confirming that it would be phased out from 6 April 2011:
http://bit.ly/gDQNPU

It has also published its impact assessment:
http://bit.ly/fIk6TO
The response sets out some of the specific details as to how the DRA will be removed, which are as follows:

* From 6 April 2011, employers will be precluded from issuing any new retirement notifications, using the current DRA statutory procedure. Between 6 April 2011 and 1 October 2011, only those employees who were notified pre 6 April 2011 can be retired on the basis of the DRA. After 1 October 2011, the DRA will be completely abolished. At that point, the current process for notification of intended retirement and the right to request working beyond retirement will be wholly removed.

* Retirement will be deleted as one of the statutory “fair” reasons for dismissal. This means that in order to fairly dismiss an employee at or above the age of 65, employers will have to rely on one of the remaining fair reasons - such as capability, conduct or “some other substantial reason” – and follow a fair dismissal procedure.

* Employers will still be able to operate compulsory retirement ages where the retirement age is objectively justifiable i.e. a proportionate means of achieving a legitimate aim. This shall be known as an employer justified retirement age (EJRA). The challenge for employers will be identifying whether there are sufficient grounds to be able to rely on objective justification. A compulsory retirement which can be objectively justified will likely amount to a termination for “some other substantial reason”, and will be potentially fair for unfair dismissal purposes.

* There will be an exception to the principle of equal treatment on grounds of age, in relation to group risk insured benefits (such as life assurance and income protection), which will allow such benefits to be withdrawn by an employer in respect of employees aged 65 and above. The exception was brought about because of the Government’s recognition that without it, employers may remove these types of benefits for all staff, due to increased cost.

The next step is for the Government to prepare regulations which will capture the above proposals. Pending that, ACAS in GB has already issued guidance on Working without the DRA:
http://bit.ly/fXpdya

Additional Reading
Readers might also be interested in a recently-published research report on the HSE website, which states that demographic trends indicate that the makeup of the labour force in the UK (and other developed countries) is changing. Older workers are becoming more prevalent in the workforce, there are fewer new workers joining the labour force and older workers are continuing to retire early (Hotopp, 2005, 2007). These changes to the labour force could lead to labour and skills shortages in the future and have implications for the economy in terms of the age dependency ratio (Khan, 2009).

The research in this area suggests that employers can have stereotyped views of the abilities and attitudes of older workers, which can both positively or negatively, influence the retention and recruitment of older individuals (Ilmarinen, 2006; McNair et al, 2007). A previous report by Benjamin and Wilson (2005) considered some of the common stereotypes about older workers and provided evidence and arguments aimed at dispelling inaccurate perceptions about older adults.

The Department for Work and Pensions (DWP) and the Health and Safety Executive (HSE) commissioned a report to review and update the Benjamin and Wilson (2005) report. The aim was to revisit the literature on age and employment which was published at the time of the Benjamin and Wilson review as well as to consider relevant literature published since (2005-2009). This updated review looks at the evidence for age-related effects on employment in the same areas addressed in the Benjamin and Wilson (2005) report. In addition the report considers trends, gender, and sector specific issues. The same definition of 'older worker' is used in this review as was used by Benjamin and Wilson (2005), which is workers over the age of 50.
http://bit.ly/eiWQNd