Will it be Easy to Justify a Compulsory Retirement Age?

The Government has recently announced its intention to remove the default retirement age of 65 (DRA) and the statutory procedure which currently allows employers to retire employees by giving 6 months' notice of termination. If implemented, from 6th April 2011 employers will no longer be able to send notices of compulsory retirement under the procedure.    Employers will only be allowed to continue compulsory retiring employees after 1st October 2011 if they can objectively justify the need for the retirement age. The general view is that it is likely to be difficult to objectively justify a compulsory retirement age, however the European Court of Justice (ECJ) has now stated otherwise in the case of Rosenbladt v Oellerking Gebaudereiniqunqsqes mBh. The ECJ said that a compulsory retirement age of 65 in a contract of employment can be justified if the following conditions are met:

  1.  The contract (including the retirement age) has been collectively negotiated with a Union;
  1.  The employee will receive a pension so that they have replacement income; and
  1.  Compulsory retirement has been in widespread use in the relevant country for a long time without having had any effect on the levels of employment.

 

This seems to indicate that employers in the UK may be able to continue using compulsory retirement ages after October 2011.  Employers should note, however that UK Tribunals have historically been reluctant to adopt the same liberal approach as the ECJ when it comes to justifying age discrimination.   We will have to wait and see how this decision will be interpreted in the UK.   In the meantime, the safest thing to do is to take steps now to retire employees who reach the retirement age between now and 1st October 2011.

Colman Coyle's experienced Employment Team can advise further and assist you through the retirement process.

For more information on the above or for advice on any other employment issue please contact our employment department on 020 7354 3000 or e-mail employment@colmancoyle.com

Author: Sandra Martins

Date: October 2010