Retirement age
Xxxxxxxxxxx
who cannot be retired. This is not the case. In fact, under the new law, employers will have to keep a closer eye on who is performing well, and manage all employees’ performance equally, regardless of age or length of service. Contrary to popular belief, employers will still be able to set a ‘normal retiring age’ for employees. Although this will be age discrimination, it will be justifiable if the decision can be shown to be a proportionate means of achieving a legitimate aim. There are several ways employers can
broach the subject of retirement with older staff. Employers can speak to the employee ‘off the record’. While this option is tempting, trying to speak with an employee ‘off the record’ is fraught with difficulty. In brief, simply saying ‘this conversation is “off the record”’, or ‘without prejudice’, does not mean that the employee cannot use the conversation against the employer. An employee could argue that these discussions are an attempt to force them out on the grounds of their age, and consequently sue for age discrimination. Speaking to the employee ‘on the record’
is best done during annual appraisals, or at regular meetings. Indeed, it may make sense for employers to discuss future plans with all employees at appraisal time, as this will give the employer a better idea of who is looking for advancement, who is happy within their role and who is considering retiring – then to plan accordingly. The most obvious difficulty for
employers will be that there is no longer a ready-made timetable for retirement, meaning the path to senior positions could be blocked. Employers may also feel unable to ask when an employee is intending to retire, leading to ‘shock’ retirements that leave the employer without a proven successor. Employers may also find it difficult
to start discussions about retirement with employees. Even if they do, many employees may not take kindly to the idea that they should retire if they are not ready to do so. Under the ‘old’ law, employees have often been allowed to continue to retirement with managers overlooking lapses in judgment or incremental changes in performance that can be attributed to an employee’s age. Moving forward, employers will be faced
with the unpleasant task of performance- managing longstanding, cherished employees if they are not up to task, rather than allowing them to continue in the knowledge that retirement is just around the corner. In practice, some employers may be happy to
allow an employee to continue working as long as they choose, and many employees will most likely want to at least reduce their hours, if not finish working completely, as they age. It is important to note that the abolition of the default retirement age has no effect upon the flexible working law currently in place, and employers will not be under a duty to allow older employees to work reduced hours unless they are eligible for flexible working in the usual way. Managers must ensure that performance management processes are implemented fairly across the entire range of employees, in order to avoid any accusations of age bias, or trying to force out the older members of staff. In addition, managers will need to watch for age-related disabilities and, if any disability is found, will need to consider whether or not any reasonable adjustments may need to be made in relation to the employee and their employment. In addition, the Equality Act, which
outlaws age discrimination, does not apply just to employees. The act applies to contract workers, agency workers, and to self-employed consultants where there is an obligation on the consultant to perform work personally. In these circumstances, the termination of a contract would be discriminatory if it was terminated simply to ‘get fresh blood’ in. There are two exceptions to the
abolition of the default retirement age: n It does not affect occupational pension schemes and the setting of a ‘normal retirement age’ for the purposes of occupational pension schemes;
n Employers may withdraw benefits for employees at or over the age of 65 – with the age at which withdrawal will be legal rising in accordance with the state pension age. This exemption deals with a key concern of employers, namely that the rising costs of benefits and insurance for employees over the state pension age could make the provision of these benefits prohibitively expensive. The abolition of the
default retirement age has the potential to have a large impact on businesses, as staff may choose to remain in their position longer, hindering succession planning. Employers and managers will be forced, in many cases, to invoke disciplinary procedures to manage the performance of longstanding employees, with a subsequent negative effect on morale. However, where there is clear ongoing
dialogue between managers and staff, and all parties are open to sensible communication, there is no reason why employees continuing to work past the current default retirement age should prove to be a problem. Employers are still free to choose to set a retiring age for their business, provided that they are able to justify this.
DAVID REGAN is a solicitor in the Employment Team at Mundays Solicitors, a regional practice that provides quality advice to corporate and private clients
First Great Western carriage cleaner, Edgar Medley, 70,
retires after 48 years’ service without a single day off sick
DECEMBER 2011 PAGE 31
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44