Throughout the UK, we are living longer and healthier lives. Many older people enjoy the social and financial benefits of working and don’t want to retire at the age of 60 or 65.
As part of the age discrimination laws, new retirement procedures are being introduced. These will enable a constructive dialogue between employers and those employees who want to continue working beyond retirement age.
When the new legislation comes into force, employers will not be able to retire staff below the employer’s normal retirement age, or below the default retirement age of 65. If the employer’s normal retirement age is below 65, it must be objectively justified.
Longer notice periods
The new procedures will also allow employers and staff to benefit from a longer notice of retirement, meaning both parties will be able to plan for the future more effectively.
Employers who want to terminate an employee’s service before the normal or default retirement age must have a fair reason for doing so and must follow the normal dismissal procedures. In this instance, retirement will not be a fair reason for dismissal.
Employers should notify employees of their intended retirement date not more than one year, but no less than six months, in advance. If they do not, the employee may be entitled to compensation.
If the employer fails to notify the employee six months in advance, they will have an ongoing duty to do so, up to two weeks before the intended retirement date. Failure to notify up to two weeks before the intended retirement date will make the dismissal automatically unfair.
If an employee has been properly notified of their retirement, they must make their request to continue working at least three months before the proposed retirement date.
Requests and appeals
The employer must consider all requests not to be retired. Where possible, they must meet the employee to discuss their request and must inform them of their decision as soon as is reasonable.
The employee may appeal against the decision, in which case, an appeal meeting should be held as soon as is reasonable.
If it is not possible to hold an appeal meeting within a reasonable period, the employer can consider the request without a meeting, as long as the employee’s case for continuing to work is taken into account.
An appeal can be made if:
- the employer refuses the request in its entirety, or
- the employer accepts it, but decides to continue employment for a shorter period than the employee requested.
This procedure must be repeated each time an individual nears the agreed extended point for retirement, unless the agreed extended period is less than six months.
In my next article, I will look at the impact of the age regulations on occupational pensions.
What to include in a retirement policy
The policy must include:
- The procedure an employee must follow to submit a valid request.
- The steps that the employer must then follow – including the requirement to hold a meeting with the employee and the employee’s right to be accompanied to that meeting.
- Details of the employee’s right to appeal.
- When and how often employee requests can be made.
Jim Fitzpatrick, employment relations minister