From 1st October 2011, employers will no longer be able to retire employees who have passed their 65th birthday, on the grounds of their age; new laws will make such an action an automatically unfair dismissal.
These new laws have been implemented as part of the Equality Act 2010 which in terms of the retirement provisions, will replace the Employment Equality (Age) Regulations 2006. The previous law had allowed employers to retire employees when they reached the age of 65, providing certain requirements stipulated by the 2006 Regulations (such as the requirement to hold a meeting) have been complied with.
The new laws have been phased in over a period of time. Up to 5th April 2011, the old law remained in place. Between 6th April 2011 and 30th September 2011, only people notified before 6th April 2011 can be retired on the grounds of their age, providing that retirement is to take place before 1st October 2011. From 6th April 2011 onwards, nobody can be notified that they are to be retired on the grounds of their age and from October 2011 onwards, nobody can be retired on the grounds of their age.
The changes recognise that some employees will need to work past the age of 65, usually for financial and/or social reasons.
If employers want to retain a fixed retirement age, they will have to be able to show that there is a real business need to be met, that having the particular retirement age meets that aim, and that it is proportionate to use that retirement age as a means of meeting that aim. The question of what is a legitimate aim is something of a moot point, and is a question that will be fact-sensitive in each different case.
As the law develops, the issue of what may be a "legitimate aim" may be clarified but at present, employers are advised to exercise extreme caution in dismissing an employee on the grounds that they have reached a fixed retirement age.
If you are an employer and want to speak to someone regarding the changes your business might have to make to accommodate this new legislation, or if you are an employee (or ex-employee) and think your (former) employer has fallen foul of this legislation, please contact us.