Are you confident about the procedures when retiring a member of staff?
Recently we have noticed an increased interest in retirement procedures which is most likely due to the proposed changes to the retirement age ahead of us and the Equality Act now in force.
Age discrimination is prohibited under the Equality Act and this should mean that retiring an employee who reaches a certain age is unlawful. However, there is an exception to the rule which makes it lawful to dismiss an employee at or over the age of 65 if the reason for the dismissal is retirement.
Employees have the right to request to work beyond retirement and employers have a duty to notify employees of this right, as well as considering any such requests. The provisions relating to these rights and duties are contained in the Age Regulations, Schedule 6, which (unlike the rest of the Age Regulations) were not repealed when the Equality Act came into force on 1 October 2010.
Default retirement age
There is currently a default retirement age of 65. However the Equality and Human Rights Commission (EHRC) has proposed the abolition of a default retirement age of 65 in a quest to change working practices for older workers. The EHRC's research shows that 24 per cent of men and 64 per cent of women want to keep working beyond the state pension age.
On top of the proposed changes to the default retirement age, the chancellor, George Osborne, has said that the state pension age will be increased to 66 for both men and women by 2020, starting gradually from 2018.
Between six and twelve months (the six-month window) before an employee's intended retirement date, you must notify the employee in writing of:
- the proposed date of retirement; and
- the employee's right to request not to retire on that date.
If the employee wishes to retire on the intended retirement date then no further action is required and that is the end of the process.
If you fail to notify the employee during the six-month window, you will be under a continuing duty to do so until the 14th day before the due termination date. An employee may complain to an employment tribunal that their employer has failed to comply with the duty to notify and a tribunal can award a maximum of eight weeks' pay.
If the employee does not wish to retire on the intended retirement date he or she must make a request in writing to work beyond that point in time. This must be done between three months and six months before the intended retirement date and the employee can request that their employment continue:
- for a stated period; or
- until a stated date.
You are under a duty to consider the request and in particular must:
- hold a meeting (with some exceptions) within a reasonable period to discuss the request with the employee
- give the employee written notice of your decision on the request as soon as practicable
- if refusing the request, advise the employee of the right to appeal
- conduct the appeal hearing (with some exceptions) within a reasonable period
- give the employee written notice of your decision on the appeal as soon as reasonably practicable
- permit the employee to be accompanied at a meeting to discuss the request or at an appeal meeting.
Getting it wrong
It is important to take care, as an employee can bring a claim in the tribunal if you fail to follow the correct procedure or if the reason or principal reason for the dismissal was not retirement.
If you want more information on retirement procedures contact our team on 08000 111 303 or visit our website: www.hattonslaw.com
The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. The law may have changed since this article was published. Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances.