Update 14 February 2011: the default retirement age (DRA) will be scrapped from 1 October 2011, with transitional arrangements from 6 April 2011.
Read our guide on the 10 things employers need to know about the abolition of the DRA.
Retirement age has been a hot topic ever since the government introduced age discrimination legislation in 2006. Personnel Today looks at the employment law surrounding the UK's default retirement age and the background of the legal challenge by Age Concern spin-off Heyday.
From 1 October 2006, the Employment Equality (Age) Regulations introduced a national default retirement age of 65.
This does not mean employees have to stay in work until 65. It means employers will no longer be allowed to force someone to retire before then - unless objectively justified where there is a genuine occupational requirement. The government has committed to reviewing the DRA with evidence called for by the 1 February 2010 deadline.
The default retirement age means that:
• It is lawful for employers to terminate the employment of a member of staff on the grounds of age when they reach the age of 65
• Employers are required to introduce a process that enables employees who are approaching their 65th birthday to request that employment is extended beyond the default retirement age
• Employers could incur costly penalties if this process is not carried out properly and within prescribed timescales.
• Employees have the right to request to work beyond 65 or any other retirement age set by their organisation.
Employers have a duty to consider such requests and must inform staff in writing at least six months in advance of their intended retirement date. For example, if you have an employee due to retire on 1 October 2009, you will need to write to them before 1 April 2009.
Retirement-related FAQs - from XpertHR
The Heyday challenge to the retirement age
The Heyday case is the name given to a legal challenge by the Heyday membership association, a division of the charity Age Concern.
Andrew Lockley, partner and head of public law at Irwin Mitchell, the solicitors acting for Age Concern and Help the Aged in the Heyday case, talks to Susie Munro about the High Court hearing (17 July 2009).
Heyday argued that the Employment Equality (Age) Regulations discriminated against older workers by introducing a default retirement age. After a lengthy legal process in the UK, the case was referred to the European Court of Justice (ECJ) in 2007.
In March 2009, the ECJ refered a decision back to the High Court after clarifying that social policy objectives "such as those related to employment and the labour market" may be considered legitimate under EU law. The High Court hearing took place in July 2009, with a decision announced on 25 September. Justice Blake ruled that the DRA was not unlawful when introduced in 2006, but there was now a compelling case for it to be scrapped.
This means, for the time being, employers can still lawfully retire people at the age of 65. An estimated 800 employment tribunal cases across England, Scotland and Wales were awaiting the ruling on whether forcing workers to retire at 65 is unlawful. These cases will now be struck out.
The government has brought forward a review of the DRA to early 2010, so it may only be a matter of months before the retirement age is scrapped anyway. There have been calls from some groups for ministers to use the Equality Bill to scrap the DRA in 2010.
According to Heyday, 80% of people in their 50s and 60s believe there should be no mandatory retirement age. Read Heyday's Q&A on its challenge to the default retirement age.
Personnel Today's Ditch the retirement age campaign
Personnel Today is supporting a campaign by the Employers Forum on Age (EFA) to force the government to commit to remove the retirement age, rather than merely reviewing it. This will provide clarity for both employers and employees and give organisations more than two years to prepare.
The EFA is working with a growing number of employers who are operating successfully without a fixed retirement age and is encouraging other members to follow suit.
As part of the campaign to urge employers to take a different approach to retirement, spoof retirement letters
(replicating the standard notice of retirement that thousands of workers receive when they reach 65 - regardless of whether they wish to retire or not) were sent to all MPs who were approaching or over 65 years of age.
The EFA says: "The EFA has been working with a growing number of enlightened employers who have chosen not to use the default age and instead allow employees to retire when it suits them. We firmly believe that it is inevitable that the default retirement age will be removed altogether, whatever the final outcome of the Heyday challenge."
EFA resources on retirement age and the workforce
The end of the line for retirement ages: the business case for managing without a retirement age
Business case for age diversity
Facts and figures on age discrimination and retirement
Retirement age: External resources
Acas guidance on age and the workplace: a guide for employers
Retirement procedures - BERR guidance
Age discrimination: a guide for employers
Video debate: Should the default retirement age be scrapped? HR practitioners and campaigners debate the issue