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Does your country have a statutory retirement age, if so, what is it?
Yes. from 1 January 2020, the statutory pension age started to increase incrementally by two months every year, rising from 65 years in 2020 to 70 years old. Therefore, those persons born in or after March 1979, will be the first group of people to be subject to the 70-year statutory retirement age.
Are employers permitted to specify a contractual retirement age within an employee's contract of employment?
Yes – currently. However, once age is introduced as a Protected Ground into the Prevention from Discrimination (Guernsey) Ordinance, 2022, it will no longer be possible to specify a contractual retirement age. This is expected to be no earlier than Q3 2027.
What are the legal implications for employers that enforce a mandatory retirement age?
Unfair dismissal is the main risk. However, it is accepted that a dismissal arising from a mandatory contractual retirement age may amount to 'some other substantial reason' for dismissal, and as such be a lawful reason, and accordingly, subject to a reasonable process being undertaken in effecting that termination, there will be little risk of an unfair dismissal claim. In the absence of a contractual retirement age, it is not possible for employers to force an employer to retire at the statutory retirement age.
Are 'early retirement incentive packages' allowed? If yes, are taxes imposed on them?
Yes. Any payments thereunder would usually be regarded as "Termination Payments" and therefore would be payable with the first £30,000 being free of tax and social security and the remainder being taxable but free from social security contributions.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
