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Posted 25 September 2011
by Martin Laver

Retirement and age discrimination

So we all know that that the default retirement age has gone.  What some people don’t know is that it is still possible to retire someone, and will be up until October 2012, under the old provisions.  What even fewer people know is that you can still set a default retirement age in your business (something called an Employer Justified Retirement Age, an “EJRA”).

The removal of the default retirement age this year has been met with divided opinion broadly split between employers and employees. Many employees see the end of the retirement age as an opportunity to work on and supplement pensions or just to stay active. Certainly, this is the Government’s aim in order to ultimately increase the state pension age but also removes the misconception that an employee who reaches 65 somehow suddenly stops working productively.

Employers, whether sympathising with these general points or not, are met with a difficult problem; what to do next. For all that the default retirement age was unpopular; it gave certainty to employers about end of career issues. In our experience, employers are not frustrated by the fact that employees are now entitled to carry on working passed 65, but that they do not know how to deal with issues such as succession planning, career development for younger workers, flexible working and voluntary retirement. These issues were resolved neatly when there was a general career cut off point.

Additionally, it is likely there will be an increase in situations where an employer sees a decline in a workers performance past 65 but is worried about dealing with it because of the employee’s right to continue working, and the suggestion that it might be discrimination to deal with it. This is the elephant in the room.

Finally, there will be situations where an employee may not have given appropriate notice to an employee who is now coming up to retirement. Expensive tribunal claims could be an unhappy result.

These issues remain hot topics, and will continue to be so for some time.

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About the author

Martin Laver

Partner

Partner in the commercial litigation team specialising in disputed trusts and Wills