March 28, 2011 7:03 am
Retirement has always been about expectation and affordability. Now we are to be given the right to carry on as long as we are able and willing to work, with no automatic leaving just because of age. It may lead to many older people happily at work, but it will inevitably also lead to some being made to leave because they are no longer up to the job. In planning ahead affordability is key as it buys real choice. How long before pension levels assume we will be working until 70, 75, or beyond, so that we no longer have any choice?
Q: What’s changing?
A: A lot. The whole process of retirement as we know it will be abolished with effect from 6 April 2011, subject to transitional provisions. Any dismissal because of age on or after 6 April 2011 will be unlawful age discrimination under the Equality Act 2010, unless it falls within transitional provisions.
Q: What are the transitional provisions?
A: For a while employees can still be retired under transitional provisions. A notice of intended retirement has to be sent to an employee on or before 5 April 2011 and they must have reached the age of 65 (or the normal retirement age if this is higher) on or by 30 September 2011. The statutory retirement procedure must have been followed and the retirement happen by 5 October 2011.
Q: Can I still be forced to retire?
A: After April 5 2011 and outside the transitional provisions an employer has two options: Remove fixed retirement ages, which will be the usual option, and employees will not be forced to retire. Many large employers (like M&S and B&Q) have managed for some time without a fixed retirement age. Most employers are unlikely to be able to justify fixed retirement ages. Since retirement will no longer be a good reason, employers will have to show that the dismissal of an older worker is for another good reason, such as they were not up to the job and that a fair procedure was followed. , or wait for the employee to resign.
Keep a fixed retirement age. The employer will have to be able to show that a real business need is being met by having the particular retirement age (difficult) and that it is proportionate to use that retirement age as a means of meeting that aim (often also difficult). The employer will need to show that a balancing act has been carried out, weighing the discriminatory effect on the employee against the benefits achieved for the business.
Otherwise the employer has to wait for a resignation, if it ever comes!
Q: How can an employer manage the workforce size without being able to retire employees?
A:Acas has produced guidance for employers, Working Without the Default Retirement Age, on how to handle workplace discussions to find out whether people intend to resign or where there may be performance issues. It contains very little guidance on how to ensure that the dismissal of an older worker is fair, so careful advice should be taken. The Acas Code of Practice on Disciplinary and Grievance procedures should also be followed.
Q: What happens if an employer gets it wrong?
A: Previously unable to claim for retirement dismissals, older employees will now be able to bring unfair dismissal claims and claims for direct or indirect age discrimination (uncapped amounts). Employers should consider now how they will deal with older employees to avoid the pitfalls, by taking good advice and reviewing current practices.
The above is general comment only and individual advice should be taken.
For specific queries please contact Victoria Young, employment solicitor at Blocks who will be able to assist with this and any other employment related legal matters firstname.lastname@example.org direct dial 01473 343922.
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