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The new Government has launched a consultation exercise setting out their plans to phase out the default retirement age (DRA). At present employers can legally set a default age of 65 years (or older) and as long as they give between six and twelve months notice and give the employee notification of the right to make a request to carry on working and consider that request, they can terminate employment without giving any reason and without risk of breaching the Age Discrimination Act, or the retirement constituting unfair dismissal.

 

The consultation document indicates that from October 2011, employers will be able to set DRA (at any age, eg 65, 68, 70, 90 years etc.?) but they will now have to objectively justify it if they do so, which for many employers it is anticipated will be very difficult. Effectively, this means that most employers will not in the future set a DRA and will only be able to terminate the employment of a person, due to the already established fair reasons of capability, conduct, redundancy, qualification or any other substancial reason. AGE will NOT be a fair reason on its own.