The abolition of the default retirement age will have a huge impact on how employers operate their businesses.
Although the DRA won't be completely scrapped until 1 October 2011, transitional arrangements from 6 April 2011 mean that employers don't have much time to get to grips with the proposals. Here are five key things employers need to know.
1. Rather than following the statutory retirement procedure, an employer that wishes to retire an employee will have to follow a fair procedure under the ordinary unfair dismissal rules and rely on one of the potentially fair reasons for dismissal.
2. Transitional retirement arrangements will be put in place from 6 April 2011. The rules relating to the default retirement age and the associated statutory retirement procedure will be repealed from 6 April 2011.
Employers will be unable to issue new notifications of retirement under the current statutory procedure on or after 6 April 2011.
3. Employers will still be able to operate a compulsory retirement age, provided that they can objectively justify it. Employers can also stop using a compulsory retirement age.
Once the statutory retirement procedure is scrapped, an employer that wishes to retire an employee will have to be able to show that it has a fair reason for dismissal.
4. Employers need to think about how the timetable will affect their workforce. Each employer should work out when its employees are going to retire and how the proposals affect retirements within its organisation.
5. Bear in mind there is now the double threat of age discrimination and unfair dismissal claims from employees who have been compulsorily retired.
There is still time for your views to be heard. To respond to the consultation document, visit www.bis.gov.uk