Q&A: retirement and age discrimination

Sarah-Marie Williams clears up some common misconceptions about age legislation and retirement.

Q. The age regulations provide for a default retirement age of 65. Does this mean that employees will automatically retire at this age?

A. No. Employers will be able to continue to employ individuals past the default retirement age. Under the Employment Equality (Age) Regulations 2006 all employees will have the right to request to work beyond the age of 65 or any other retirement age set by the employer.

Q. The age regulations place new procedural obligations on employers where the reason for dismissal is retirement. What are our obligations?

A. The age regulations set out detailed procedural requirements that must be fulfilled before an employee’s employment can be terminated by reason of retirement.

You are required to inform the employee of their intended retirement date and of the right to request not to retire at least six months – but no more than 12 months – before the retirement date.

An employee who has been notified of this right and who wishes to request not to retire must do so in writing at least three months – but no more than six months – before the intended retirement date. The request must specify whether the employee wishes to continue working indefinitely or for a stated period.

Under the regulations, you will have a duty to consider all requests. If you decide to allow the employee to continue working, you are required to write to the employee setting out whether they will be allowed to continue working indefinitely, or for a stated period.

Q. What is the new duty to consider procedure?

A. Under the age regulations, employers have a duty to consider any request from an employee to work beyond their retirement date. You must either agree to the request or arrange a meeting with the employee, within a reasonable period, to discuss the matter.

Q. What are the grounds upon which we can refuse an employee’s request to continue working?

A. The age regulations do not require an employer to give a reason for a refusal to grant an employee’s request to continue working. Your obligation is only to consider the request, and to follow the correct procedures in relation to adhering to the time limits and holding a meeting with the employee to discuss the matter. However, an employee has the right to appeal a decision not to be allowed to continue working and, if they do so, you are required to arrange an appeal meeting. It will be good practice to have some objective justification for the refusal.

Q. If the contract of employment provides for a retirement age, will we still need to follow the retirement procedures?

A. Yes. You are still required to follow the retirement procedures and failure to do so will give rise to a potential unfair dismissal claim. Although references to intended retirement dates in contracts of employment may be preferable to setting out a retirement age, this will not absolve your duty to follow the retirement procedures outlined above.

Q. Will the statutory disciplinary and dismissal procedures still apply to dismissals by reason of retirement?

A. The statutory disciplinary and dismissal procedures will apply to all retirement dismissals until the age regulations come into force on 1 October 2006. However, from this date, the statutory disciplinary and dismissal procedures will no longer apply to retirement dismissals and the new retirement procedures should be followed instead.

Q. If an employee has made a request not to retire and is allowed to work past the age of 65, can we subsequently dismiss them at a later date?

A. To dismiss the employee by reason of retirement at a later date, you are obliged to follow the same retirement procedure at the later date. You will, again, need to notify the employee of their intended retirement date and the right to request not to retire, at least six months – but no more than 12 months – before the retirement date. You will also need to ensure that the duty-to-consider procedure is followed in respect of any such request. These obligations will apply each time a retirement dismissal is considered, irrespective of the number of extensions of work that are agreed.

If the employee is dismissed for a reason other than retirement, the dismissal will need to be fair, under the usual unfair dismissal rules, if potential unfair dismissal proceedings are to be avoided. It will be open for an employee to show that the dismissal is not a genuine retirement, is procedurally unfair and/or that the statutory dismissal procedures have not been complied with. The age regulations will remove the age limit for bringing an unfair dismissal claim so, from 1 October 2006, employees aged 65 or over will be eligible to claim unfair dismissal.

Q. Is it possible for a dismissal by reason of retirement to be automatically unfair?

A. Yes. A retirement dismissal will be automatically unfair in the following circumstances:

  • The employer has not informed the employee of their intended retirement date and of the right to request to continue working at least two weeks before the retirement date.
  • The retirement takes place before the duty to consider procedure has been completed, for example, before the employer has had the meeting with the employee or before it has informed the employee of its decision.
  • The employer has failed to consider an employee’s appeal against a decision to retire them.

Q. What is the position in respect of retirements due between 1 October 2006 and 31 March 2007?

A. The age regulations set out transitional provisions that will apply to retirement dismissals taking place between 1 October 2006 and 31 March 2007. There are different rules depending on whether the notice to retire the employee is given before, on or after 1 October 2006.

If an employee is given notice prior to 1 October 2006 that they will be retired on or after that date, but before 1 April 2007, the notice should be the lesser of four weeks’ notice or contractual notice. You should notify the employee of their right to request not to retire on, or as soon as practicable after 1 October 2006. The employee may make a request not to retire up to four weeks after their notice period has expired.

If you give an employee notice on or after 1 October 2006 that they are to be retired before 1 April 2007, the notice should be the contractual notice (or the statutory minimum if that is greater). You should also notify them of their right to request not to retire before or on the same day as the notice of dismissal. The employee may request not to retire up to four weeks after their notice.

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