Heyday retirement ruling: Your questions answered and lawyers’ reactions

Employment lawyers have told Personnel Today that the rejection of the Heyday challenge to compulsory retirement at 65 is a relief to employers. Yet HR managers and directors still have a host of retirement-related issues to handle, and face the prospect that the default retirement age (DRA) will be reviewed next year, and may be raised or scrapped.

“For employers there will be a huge sigh of relief as the status quo of retirement at 65 will, at least for the time being, continue as before,” said Edward Wanambwa, partner at CM Murray. “But this is only a temporary reprieve. The government will review in 2010 whether the DRA of 65 is still appropriate and necessary.

“The judge’s view is that it is not. It may therefore result in the age being increased, say to 70, or possibly – as is the case in the US – even being removed altogether.”

This view is shared by other employment lawyers. For example Owen Warnock, partner at Eversheds, said: “The judgment will be greeted with relief by many employers. Our recent survey showed that three quarters of employers wished to retain a default retirement age, even though the vast majority of those employers would in practice consider agreeing to let workers stay on beyond the age of 65 on a case by case basis.”

Rachel Dineley, head of diversity and discrimination at Beachcroft, said the decision “will be welcomed by all those employers who choose to retire employees, especially given the current economic climate” – a sentiment shared by Tom Flanagan, employment partner at Pinsent Masons.

For many employers, the focus will now return to ensuring that they get things right under the statutory retirement procedures. According to XpertHR, many employers are uncertain about the consequences of agreeing to a request from an employee to continue working beyond retirement age.

For example, if an employer grants a request for an employee to work indefinitely beyond retirement age, is there anything to prevent it seeking to retire the employee at any subsequent time?

The answer is no, but the employer is obliged to follow the statutory retirement procedure if it wants to retire the employee at a subsequent date.

This means that the employer will have to give notice of the new date on which it intends the employee to retire, and once again give him or her the right to make a request to continue working beyond the subsequent retirement date. If the employee makes a request to continue working, the employer must consider it, and give a right of appeal if rejecting it or granting it for a shorter period than requested by the employee. The employer must therefore repeat the retirement process in relation to the subsequent intended retirement date.

Other employers’ questions in relation to the statutory retirement procedure answered by XpertHR include:

  • Can an employee make more than one request to continue working beyond retirement in relation to an intended retirement date?

  • Is an employee attending a meeting to discuss a request not to retire entitled to be accompanied by a trade union representative?

  • Where an employer has followed the statutory retirement procedure and notified the employee of the date of retirement, does the employer also have to give statutory or contractual notice to terminate the employee’s contract?

  • Where an employer has granted an employee’s request to work beyond retirement age, but the employee subsequently becomes redundant, is he or she entitled to statutory redundancy pay?

  • Must an employer give reasons for refusing a request to continue working beyond retirement age?

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