Businesses may need to act to avoid age discrimination against directors

Companies may need to make special provision for directors under the new age discrimination laws that are due to come into force this October.

One key element in the new Regulations is that the default retirement age will be set at 65 (although a business can set a lower retirement age if objectively justified). This means that an employee can be forced to retire from his employment at age 65, provided the statutory procedures are followed.

However, the default retirement age will not apply to office holders, eg company directors.

As a result, a business which requires a director to retire from his directorship at a certain age could leave itself open to a claim of age discrimination under the new Regulations unless it can objectively justify that retirement age. It may therefore be advisable for employers to enter into compromise agreements with those directors whom they wish to retire.

October 1 2006

See the Age Discrimination pages on the DTI website