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Warning: Abolition of Default Retirement Age – Anomaly in Draft Regulations!

As those who attended our breakfast seminar last week on the abolition of the Default Retirement Age will know, the draft Regulations dealing with the new legislation and the transitional provisions were released by the Government last week.

 By way of a summary, the draft Regulations deal with the following:

 The current legislation which makes a retirement dismissal fair providing that the correct procedure has been followed, will be abolished from 6th April 2011, with the DRA being removed with effect from 1st October 2011.

  • Transitional provisions will apply between 6th April and 1st October 2011.
  • The final date for issuing a notice of retirement under the current regime is therefore 5th April 2011 (or 30th March 2011 if best practice is to be applied).
  • The draft Regulations confirm that an exemption will be provided to enable employers to avoid providing insurance benefits to the over 65s, as had been promised by the government in its response to the consultation.

Most importantly for employers, on the basis of the current wording of the draft Regulations, employers will be left in the difficult position that they will not be able to retire those who are (or were) 65 before 1st April 2011, before 1st October 2011 (ie during the transitional period), without the risk of potentially facing an age discrimination and unfair dismissal claim.   

This will of course affect employers who have issued (or are about to issue) notices of retirement to those who are already 65, which are due to expire during the transitional period.

It is hoped that this is a drafting error which will be corrected in the final version of the Regulations, but until this is clarified, employers should take advice before retiring employees who fall within this anomaly to avoid costly claims.

We will provide further updates on this when they are available, and will also confirm the content of the final version of the Regulations once they have been released.

Should you require any further information please do not hesitate to contact a member of our employment team.

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