We have an employee, Eric, who is 66 years old. The company’s normal retirement age is 65 and the company now wants Eric to retire as soon as possible. Eric has been with the company for just over 4 years and has a 4 weeks’ notice period. How should company go about retiring him?
Anxious about age
As you probably know, with effect from 1 October 2006, the Employment Equality (Age) Regulations 2006 (“the Regulations”) came into force preventing discrimination on the grounds of age. The Regulations impose on employers a procedure which must be followed in respect of a planned retirement in order to avoid unfair dismissal liability. This is because the Regulations changed the previous law so that employees aged over 65 are now eligible to bring claims for unfair dismissal and a statutory redundancy payment.
The rationale behind the retirement procedure is to encourage the employer and the employee to discuss in advance a proposed retirement and, if requested by the employee, an extension of the employee’s employment beyond the proposed retirement date. Currently the statutory default retirement age is 65 and therefore provided that the correct procedure is followed, there should be no liability attached to retiring an employee at or after age 65 (subject to the procedural requirements).
Under the legislation, whilst there is an obligation to tell the employee that he has a right to request to work beyond his retirement age and the employer must meet with him to discuss this, there is no obligation on the employer to agree to the employee’s request. It is therefore more a procedural exercise of sending the correct letters and holding the correct meetings rather than a mandatory requirement that you keep employees in employment after they have reached 65.
Under the transitional provisions of the Regulations, the company should give Eric (in writing) at least the notice required by his contract and in this letter tell him that he has the right to request to continue working after the proposed retirement date. If Eric makes this request, the company must arrange a meeting (ideally within 14 days of receiving the request) and discuss this request with him. Eric is entitled to bring a companion with him to the meeting. There is no obligation on the company to agree to the request. After the meeting, the company must send a letter to Eric telling him of its decision either way. If Eric is unhappy with this decision, he has the right to appeal and the company must hold another meeting with him to discuss his appeal and then follow this up with a letter advising him of the decision in respect of his appeal.
Whilst the procedure sounds cumbersome, it ought not to be too difficult to comply with it and it does not mean that the company must allow Eric to carry on working. The benefit of complying with the procedure is that the company avoids any unfair dismissal liability. A further benefit of dealing with the matter now (where the retirement takes effect before 6 April 2007) is that under the transitional provisions of the Regulations, the company only needs to give Eric his contractual notice whereas, after 6 April, the company should give at least 6 months’ notice of a proposed retirementhttp://hrlaw.conscious.co.uk/cms/artcateditorpopup/hrlaw_auntieadvice date.
You should therefore send a letter to Eric providing him with the two pieces of information currently required by the Regulations, i.e. contractual notice and the right to request to carry on working. If Eric is happy to retire, that will be the end of the matter. The procedure is only applicable if Eric wishes to continue working for the company.