Retirement age

Retirement age

Default Retirement Age

As of April 2011, the Government abolished the Default Retirement Age (DRA). The last date employers could compulsorily retire their staff was 30th September 2011. Employers now will still be able to dismiss staff of 65 or older, but they will need to prove ‘capability grounds’ for doing so, which means they have to prove that a worker is no longer capable of undertaking work they are contracted to do.

Positively, workers being made redundant over the age of 65 will now receive redundancy pay, whereas previously they would have been compulsorily retired without such a payment. Some flexibility is being retained in the Government guidance on the status quo post-DRA to allow for workers to come to agreement with employers if a retirement age is deemed necessary. Currently there is no clear guidance on this, developments will occur and legal precedent will emerge in the coming months and years.

Regarding voluntary retirement, until the State Pension age goes up, workers will still be able to retire at 65 if they wish, but their employers can now no longer make them retire at 65. Workers can still retire at 65, but they need to give 6 months notice to their employers of their intention to retire.

Unfair dismissal and redundancy

Retirement dismissals at or after the age of 65 (or a lower age, if justified) will not be unfair provided the employer has followed the “duty-to-consider procedure” – in which case the statutory dismissal procedure will not apply to retirement dismissals.

The upper age limit for claiming unfair dismissal and statutory redundancy pay is removed but the qualifying periods of service needed to bring claims are retained. Length of service (capped at 20 years) will still be used for calculating both statutory redundancy payments and unfair dismissal basic awards.

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