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Posts Tagged ‘retirement’

The EAT has held that a request, under the Employment Equality (Age) Regulations 2006, to continue working beyond the normal retirement age must be considered in good faith. To satisfy the requirement of good faith the employer had to genuinely consider whether such a request should be accepted.

In this case the employer had a blanket policy of retiring its staff when they reached the age of 65. Whilst such a policy was legally permissible, the EAT said that the employer was still required to consider whether an exception should be made. The EAT’s view was that the statutory procedure followed by the employer was a sham as the meetings it held with the employee were mere formalities at which nothing would be said or done to overturn the blanket policy.

Case reference: Compass Group Plc v Mr K A Ayodele

Employers have not been able to issue default retirement notices since 6 April 2011 when the default retirement age was abolished. However, this judgment may still impact on employers that notified employees of their impending retirement before that date and are still going through the procedure. In such cases employers should enter into discussions with an open mind. Employers are also advised to inform the employee that the discussions are being held on this basis both in correspondence and at the start of the meeting itself.

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From 1st April 2011 changes in the law mean that, with the exception of the final 6 month transition phase, it will be unlawful to enforce a default retirement age on employees.

A client asked me how on earth they were going to manage as several members of their workforce were expected to do physically demanding jobs and he thought it was likely that they would buckle under the strain by the time they were seventy! Brian had heard about the ‘justification’ defence which he hoped would exempt his company from implementing the new law and would allow him to continue enforcing compulsory retirement at age 65. However, it will be very difficult to succeed with the justification defence so I suggest that you take a few moments to review your strategy in light of the full facts before deciding on your company’s retirement policy.

It’s completely understandable that Brian hoped to qualify for the exemption and you may well feel the same until you have chance to give it a bit more thought. According to the Office for National Statistics’ Interim Life tables 2007 – 2009, ‘life expectancy for those aged 65 in 2009 is projected to be 21.1 years for males and 23.8 years for females’

That is a long time if government funds will be the sole means of subsistence for pensioners. For that reason the Chancellor plans to keep increasing the state retirement age and easing the burden on the Treasury by removing the compulsory retirement age often imposed by employers.

With this weight of evidence Brian realised that working beyond 65 is a policy that is clearly here to stay so he may as well take the positives from the situation and get on with it. “What positives?” I hear you say!

Well, I’m not suggesting that you actively recruit employees from the over 65 age group but you can expect your current employees to work in their jobs until they can no longer fulfil their roles to the standard required. Instead of plotting to terminate their employment, why not take advantage of their abilities, experience and qualifications. The fact that these long serving employees know your products, services, customers and colleagues well and can contribute to business continuity has to be a positive for your organisation.

The area that managers and employers are advised to monitor more closely than ever is staff performance. If older employees fall below the standard required in any aspect of their role, then it is time to performance manage them. If it emerges that they are unfit for the work (mentally or physically) then you are within your rights to discipline them and either find them suitable alternative roles or dismiss them for incapability.

As employees keep working beyond 65 some may want to work less hours or shed some responsibility. In such cases you could consider re-defining their terms and conditions in return for a reduction in wages but remember, any agreed changes should be recorded in their contracts of employment.

It’s my guess that we will see the majority of employees electing for retirement or opting for reduced hours or respnsibility when they feel they can no longer do their jobs to previous high standards, rather than face the embarrassment of being performance managed out.

We may even laugh about the policy of such a relatively short working life in years to come….

“Can you remember when everyone was expected to retire at 65” says the young apprentice.

“Yes, replies the Manager wistfully, as she opens a telegram from King William to celebrate her 100th birthday!“

Go to www.pain-free-staff.co.uk and download your copy of my free guide for employers and managers who want better results and less hassle.

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It has been revealed in the past couple of days that there appears to be a serious drafting error in the government’s retirement regulations creating the situation where employers who agreed to postpone retirements by a year or two (until a date between April and October 2011) will face tribunal claims if they are not careful. Effectively, if an employee’s 65th birthday does not fall ‘during’ the transition phase it will be unfair to force their dismissal for reasons of retirement. (The transition phase is during April to October 2011)

This will be a poke in the eye to those employers who were considerate enough to allow employees to keep working when they requested a postponement last year.

Employers who agreed a 12 month postponement thinking they were safe to insist on the retirement as long as it was before the final abolition date in October 2011 will be disappointed. Even if you have an agreement with the employee that they will retire on that date before September 2011, if you insist on the retirement it looks as though you will be in hot water if they sue for unfair dismissal / age discrimination!

Nobody could have predicted this situation as it is clearly an error in drafting. The reality is, however, that we are stuck with it until the legislators sort it out.

The answer in the meantime for those employers who find themselves between a rock and a hard place is probably that the best advice is do nothing until you absolutely have to because lawyers usually work something out, so if you can wait and see what happens, then do so. But if you have to act before a solution is published then take legal advice and do some brainstorming with your lawyer. There will be no gurantees but you will at least know your options and the risks associated with them.

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The draft regulations have been published and as predicted, it looks as though it will be possible to provide insurance benefits to the under 65s but not the over 65s even though on the face of it such a policy would seem ‘ageist’.  Further updates on the effects of the end of DRA will be published as they emerge.

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State Pension Age increases: and there is more to come. See the full article from The Telegraph  State Pension Age increases: you ain’t seen nothing yet – Telegraph Blogs.

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The Press Association: Men ‘less enthusiastic about work’. The findings of this research suggest that older workers are more productive.

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Retirement age rise plan attacked by charities and unions | Money | The Guardian.

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