Retirement and the DRA

Few will have been able to avoid the news that the default retirement age (DRA) is to be scrapped. Currently the plans are only proposals and subject to consultation but the courts in the Heyday case (see Law News Winter 2008) made it clear that the current regime cannot remain.

Under the proposals the DRA will be removed on 1 October 2011. As employers must give at least six months’ notice of retirement, it would seem that the last date a retirement notice can be given is 31 March 2011. After 1 October 2011 retirement will be allowed only if it is objectively justified. The recent Court of Appeal case of Seldon v Clarkson Wright and Jakes is helpful. The DRA applies to employees, not partners in a business. Mr Seldon, a partner in Clarkson Wright and Jakes solicitors, was compulsorily retired when he reached the age of 65. He brought a claim of age discrimination.

Clarkson Wright and Jakes argued that the use of a retirement age of 65 was aimed at giving senior solicitors the opportunity of partnership and to help with partnership and workforce planning. The Court of Appeal held that a retirement age of 65 was a proportionate means of achieving this aim. However, as with many things in law, it was not quite so straightforward. The court took into consideration the fact that the law currently allows employers to retire employees at 65 and decided that this supported 65 “as a fair and proportionate cut-off point”. The abolition of the DRA would remove this cut-off point.

Until the outcome of the consultation is published it is not known what, if anything, will replace the current regime. If nothing is put in its place, employers will need to rely on one of the reasons in the Employment Rights Act, for example capability or conduct, when looking to dismiss an older employee.

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