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UK Is Considering Abolishing Upper Age Discrimination Limit

BY Stephen Brown, John Shyer
December 21, 2010

The new government in the UK has announced its intention to abolish the UK default retirement age of 65, effective as of October 2011, and is currently consulting about the impact that this will have on UK employers. The experience of the U.S. courts and employers under the U.S. Age Discrimination in Employment Act may prove useful in predicting the effect of the proposed change.

The UK Legal Changes

At present, the UK Employment Equality (Age) Regulations 2006 (the “Regulations”) allow employers to set a company retirement age, and if this company retirement age is the same as the default retirement age of 65 in the Regulations, the required retirement of employees at that age is immune from age discrimination claims (provided that the retirement procedure stipulated in the Regulations is followed). Employers view this as a valuable protection, as employees in the UK are not employed at will. Employees may only be dismissed if three conditions are met:

  1. The dismissal is for one of the six potentially fair reasons (one of which, at present, is retirement);
  3. The employer has acted reasonably in treating that reason as sufficient to justify dismissing the employee; and
  4. The employer has followed a fair dismissal process.

Failure to comply with these three requirements may expose a UK employer to unfair dismissal liability, which is currently capped at '65,300. However, if the dismissal is connected to some form of prohibited discrimination (which includes age discrimination), the cap is inapplicable and the liability is unlimited. The majority of UK employees gain unfair dismissal protection when they have accrued 51 weeks of service with the same employer.

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