Elisabeth Thirlby gets legal guidance this week from Helen Badger, employment law expert at Browne Jacobson and Shazia Ali, Solicitor, Mills & Reeve on managing impending age discrimination regulations in relation to retirement.
We are likely to apply the statutory retirement age of 65 when the Regulations come in this October. We have one part-time employee who is already 69. What will his rights be?
Helen Badger, employment law expert, Browne Jacobson
All employees will, from 1 October 2006, have the right to be notified of their retirement date and to request to work beyond that date. The upper age limits for unfair dismissal and redundancy rights will also be removed, except in circumstances of genuine retirement; that is where the reason for dismissal is that the employee has reached the company’s or the statutory retirement age and appropriate procedures have been followed.
The rights this employee has will depend on whether it is your intention to dismiss and, if so, at what point in time the dismissal takes effect.
Once a retirement date of 65 is introduced, you will have to give all employees coming up to that age, or indeed over it, notice of their intended retirement date. This notice has to be given to employees six months in advance of that date. The employee then has the right, at any time up to three months before the intended retirement date, to request to work beyond the retirement date.
Employers who receive such a request are obliged to hold a meeting, within a reasonable period, to consider the request and also offer a right of appeal. Failure to give the notice or follow the required procedure will make the dismissal automatically unfair and could lead to compensation payouts of up to eight week’s pay.
There are some transitional arrangements for retirement dismissals crystallising within a six-month period after the legislation becomes operative. So, if you take no action now, and seek to dismiss at a later date and the effective date of termination is after 1 October 2006 but before 31 March 2007, you will be caught by these transitional provisions.
These provisions are quite complex but, in a very brief summary, require you to give appropriate notification of intended retirement and the right to request to work beyond retirement but at slightly different points than under the general provisions.
However, employees who have reached the statutory retirement age of 65 may currently be lawfully dismissed. Their employment will (currently and until 1 October 2006) be terminated for “some other substantial reason”. If the employee is given proper notice of termination (i.e. whichever is the greater of their contractual notice or minimum statutory notice) but this means that their effective date of termination is before 1 October 2006, the Regulations do not apply at all and there is no need to comply with the statutory retirement procedure.
Helen can be contacted at: [email protected]
Shazia Ali, Solicitor, Mills & Reeve
From 1 October 2006 the statutory retirement age of 65 will apply to all employees and, in practice, will mean that employers who intend to retire employees at 65 will have to give notice to these employees that they intend to retire them on their 65th birthday. Notice must be no less than six months and no more than twelve months long. In general, employees will receive notice six months before their 65th birthday.
In your case, where the employee is 69 years old, he will be entitled to exactly the same notice of retirement. Therefore you need to consider whether you wish to retire your employee and, if so, the date that you wish to retire your employee. You then need to give him no less than six months and no more than twelve months’ notice of the proposed date of retirement.
Under the regulations, employees also have the right to request to continue working beyond the proposed retirement date. Should the employee request to continue working, the employer must hold a meeting to discuss the request with the employee. The employer must inform the employee of the decision as to whether the request has been granted or not; give the employee the right to appeal against the decision; and hold a meeting where an employee does appeal. This has been called, the ‘duty to consider procedure’.
The regulations place the onus on employers to inform their employees of the right to request to continue working. For convenience, I advise you do this at the same time that you give notice of the proposed retirement date. Providing you give the correct notice and follow the duty to consider procedure, the retirement should be fair.
Shazia can be contacted at: [email protected]
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