Many employees are happy to leave their employment when they reach their retirement age, especially if they have an adequate income for their retirement years. If an employee is content to retire, then their contract terminates by mutual agreement. If an employee is forced to retire against his or her wishes, on the other hand, that amounts to a dismissal, which could potentially lead to claims of unlawful age discrimination and unfair dismissal.
A company can avoid these claims by following a prescribed procedure, which is explained below and involves notifying the employee of its intention to retire him or her at least six months in advance of the proposed retirement date. Since an employee may initially be happy to retire but change his or her mind closer to the retirement date, employers would be well-advised to follow this procedure in all cases.
Safe retirements
The rules on retirement dismissals are extremely complex, with many variables that may affect the outcome. An employer can, however, ensure that a retirement dismissal is neither an unfair dismissal nor an act of unlawful age discrimination by taking the following steps.
Step one: Check the intended retirement date
The date at which the employee is required to retire should not be below 65. If there is an age at which employees in the employer’s business who do the same kind of job as the employee are normally required to retire and that age is over 65, then the employee should not be required to retire before that date.
Step two: Notify the employee of that date and his or her right to request to work on
Not more than one year nor less then six months before the date the employer intends the employee to retire, the employer must confirm that date to the employee in writing and inform him or her of the right to request to work on beyond that date. If the employer fails to meet this duty to notify, not only may any subsequent dismissal be unfair, but the employer will be liable to pay compensation to the employee of up to eight weeks’ pay.
Step three: Deal with any request to work on
If the employee wants to work on beyond the notified date, he or she must put that request in writing. The employee may ask for his or her employment to continue indefinitely, or for a stated period or until a stated date. The request must be made more than three months but not more than six months before the intended date of retirement. On receiving the request, the employer must either agree an extension with the employee and confirm it in writing or hold a meeting with the employee to discuss it. At the meeting, the employee has the right to be accompanied by a work colleague of his or her choice, who is entitled to address the meeting and to confer with the employee, but not to answer questions on the employee’s behalf. The employer must notify the employee of the result of the meeting in writing.
Step four: Deal with any appeal
If the employee agrees to allow the employee to work on, but not for as long as the employee requested, or if it refuses the employee’s request completely and confirms the original retirement date, the employee has the right to appeal that decision. If the employee does appeal then, unless the employer and employee can agree an extension, the employer must hold a meeting to consider the appeal at which the employee has the right to be accompanied by a work colleague. The employer must notify the employee of the result of the appeal in writing.
Step five: Implement the retirement
If the employer is not going to grant the employee an extension, the employee should be retired on the intended date of retirement as originally notified to the employee.
If a company is planning to retire an employee compulsorily in circumstances that fall outside this procedure, it should contact its Association for advice.
If an employee is granted an extension, the company will have to follow the same procedure when implementing his or her later retirement, unless the extension was for a fixed period of six months or less, in which case there is no duty to do so.
Any employee who accompanies a colleague at a meeting to discuss retirement has the right to a reasonable amount of paid time off to fulfil that duty. He or she is also protected from being subjected to any disadvantage or dismissed as a result of carrying out his or her duties, as is the employee who exercises his or her right to be accompanied.