Retirement changes look imminent

In recent weeks Equalities Minister Harriet Harman has signalled a major change in the law on retirement, with huge implications to all of us who have yet to reach that milestone. Only a few weeks after Ms Harman's Equality Bill was announced in the Queen's Speech, with no mention of retirement ages, a measure of far more sweeping effect has been announced in an interview with the Daily Mail and in a speech to the charity Age Concern and Help the Aged.

At present, employers are allowed to dismiss staff when they reach the age of 65, without any redundancy payment, even if they do not want to retire. This comes as a surprise to many, who assume that the recent laws on age discrimination prevent this happening. In fact those new rules generally work against older staff, by making it harder for employers to dismiss them once they have passed the age of 65. The recession has made this worse, with retirement of staff at 65 being used as an alternative to redundancies for younger workers.

As Ms Harman said in her speech:

"People are remaining active and healthy well into their older years. But at the moment there is no legal backing for you if you want to stay at work, so what we are proposing is a massive public policy change.”

The new ideas include not just a change to the compulsory retirement age, but also allowing workers to make flexible working requests to adjust their working hours as they get older.

All this may well have been prompted by a legal challenge to the retirement rules brought last September by Age Concern and Help the Aged, who argued that they infringed European Law. Mr Justice Blake said that there was a "compelling case" for a change in the law, but upheld the present age only when the government undertook to review the retirement age by this April. And since it looks as though the government intends to remain in place until May, there seems to be a good chance that these proposals will be enacted shortly.

Employers will need to review their retirement procedures shortly, and amend contracts of employment dealing with retirement age. For further assistance contact Eoin Fowell on 01752 292350 or James Twine on 01752 292351