A valued employee will be 65 this October. We’d like to keep him on, but also see this as an opportunity to renegotiate his contract. What are we allowed to do as regards salary and terms and conditions etc.?
On the assumption that he has indicated he wants to stay on rather than retire on reaching 65, you should be aware that the duty to consider procedure is not intended to give employers an opportunity to renegotiate an employee’s contract. The only way to do this is if the employee agrees to it.
The legislation does not make any provision for changing terms and conditions. In fact, if an employee makes a request to work beyond their retirement age, they are entitled to do so on the same terms and conditions and the same benefits as they were receiving before.
That said, there is nothing to prevent you from asking him if he would be willing to consider a changed role, but you should be careful in any discussions as you do not want to give him grounds for bringing a claim of age discrimination. You mention that he is a valued member of staff, and therefore presumably you do not want to lose him. The question of whether or not he is likely to agree will depend on what you are going to offer him and whether, for example, there is a change of role which would suit him. However, if you are seeking to reduce his salary and terms and conditions in general for the same job, he is very unlikely to agree, and you cannot impose any new terms and conditions on him, as this will give him grounds for claiming age discrimination and/or constructive unfair dismissal.
If he is not likely to be willing to agree to a change in salary and terms and conditions, and you do not therefore want him to stay on after he is 65, it will be important to ensure that you go through the statutory duty to consider procedure before retiring him, so that you are not at risk of claims of age discrimination or unfair dismissal. It is not clear whether this has already started, but if it has not, you should give him at least six months’ notice of his intended retirement date, otherwise you will be in breach of the procedure, and liable for compensation of up to eight weeks’ pay.
Gagandeep Prasad, solicitor, Charles Russell’s Employment Group