The so-called 'default retirement age' is to be phased out completely by 1 October 2011, with transitional arrangements for compulsory retirements taking effect in the preceding six months. Although some business groups are up in arms, reform has been on the cards for a while. Increasing life expectancy, lower birth rates and declining pension provision all inexorably point towards people extending their working lives. Once the law has changed, employers will still be able to operate their own mandatory retirement policy but only if they can objectively justify it - which will require cogent evidence of why it is necessary for staff to go at a particular age. Otherwise, employees will be able to carry on working as long as they wish, unless there are legitimate grounds for fairly dismissing them, such as poor performance or redundancy. Developing channels for constructive discussions with staff about retirement planning will be the key challenge for many organisations.
- Michael Burd and James Davies, Lewis Silkin LLP solicitors, email: email@example.com