Five years on from the abolition of the default retirement age, employers are still coming to terms with the practical challenges of managing older workers. Chris Cook of SA Law advises on how to deal with sensitive issues concerning older workers, such as planning ahead and addressing performance issues.
Following the abolition of the default retirement age back in April 2011, dismissals based on an employee’s age could amount to direct age discrimination. This change was certainly good news for the individual, however employers were faced with the uncertainty of when older employers may elect to prompt their retirement. This uncertainty impacts an organisation’s long-term business plans as to when employees will be leaving the organisation and when they will need to be replaced.
How and when employers can set a retirement age
In removing the default retirement age, the Government wanted no worker to be deprived of the opportunity to work simply because of their age. Although in most circumstances it will not be objectively justifiable for employers to apply their own retirement age instead, employers do have the opportunity to produce evidence to show that setting a retirement age in certain jobs within their organisation is justifiable. They would need to show:
- that they are trying to achieve a legitimate aim; and
- that setting a retirement age is a proportionate way of achieving that aim.
More on managing older workers
Proving this can be difficult to demonstrate and it will be necessary to provide evidence if challenged; assertions alone will not be enough. Reasons for employers to provide their own retirement age could include:
- Upholding health and safety standards. Employers would need to demonstrate that the risk relates to a specific activity and is at a high level.
- Enabling workforce planning. Employers would need to demonstrate that business aims cannot be properly achieved without advance information about future vacancies.
Tips on how to hold conversations with older workers
Many employers have concerns about speaking to any individual employee directly about retirement, as they worry that they might accidentally discriminate against employees due to their age. However, in order to facilitate succession planning and fulfilling business plans within organisations, such conversations are necessary. Employers should consider the following:
- Avoid using words and phrases such as age, old, young, Generation X and Y or baby boomers. Although these words seem harmless and might well be used in with completely innocent intentions, it is easy for them to be used as evidence to support an age discrimination claim should an employee feel they have been unlawfully dismissed.
- Ask open questions that prompt discussions of where employees see themselves in the next few years and how they view their contribution to the organisation. This may encourage employees themselves to bring up the topic of retirement. You are then entitled to discuss leaving dates and any working arrangements leading up to it.
- Hold these discussions as part of an employee’s formal appraisal, or alternatively, as part of a group meeting so as not to single out any one employee. In the meeting, explain the retirement options that are available and highlight that, as an organisation, you would need as much notice as possible from employees planning to retire.
- Consider whether or not your managers, and anyone involved in holding these discussions, are well prepared in doing so. In order to be effective and avoid potential claims of age discrimination, it is vital that managers are trained and informed on the best approach to take.
- It is important that any discussions be recorded and held for as long as there is a business need for doing so. It would be good practice to give a copy of the meeting notes to the employee.
Performance issues when managing older workers
It is important not to assume that employees’ performance will deteriorate as they get older. If you do have concerns about the performance of an older employee, you should treat them in the same way that you would treat any other employee whose performance was giving you concern. Failure to address any poor performance with an employee because there is an expectation they will retire soon may be discriminatory.
It is also discriminatory to be harder on older workers than others, for example, because you would like to encourage them to leave or because you are making assumptions about their capacity to improve. You should establish a reason for poor performance, agree with the employee what training and development would help them meet the business’ expectations, and set a reasonable timetable for improvement.
If, by an agreed time, the employee’s performance has not improved sufficiently and you have followed the company’s poor performance procedure in full, you may then decide to dismiss the employee on capability grounds. Any performance management system you have should be the same for all your employees.
It is vital to have regular conversations with your workforce. Keeping communications free and open will allow employees to be aware of your expectations of them, their performance levels and future plans of both the organisation and the individual. By making individuals aware of the retirement options and opportunities available to them, they will be encouraged to come to you to discuss their plans in relation to their retirement.