In our last issue we reported that the Default Retirement Age of 65 had been abolished. It remains a matter for each employer to decide if they fix a retirement age or just deal with each individual on his or her own merits.
If your employer has a fixed retirement age and your employment is terminated just because you have reached it, you may have a claim for unfair dismissal and age discrimination. The answer could be different for different types of business, or even different for different parts of the same business.
ACAS has issued guidance for employers and this can be found at www.acas.org.uk/Advice and Guidance/ Publications/ Retirement/ Age and the Workplace a guide for employers and employees.
Generally speaking, it is thought that it will be difficult to justify a retirement age below 65. A fixed retirement age of 65 or above has to be objectively justifiable. This means that an employer must use “proportionate means to achieve a legitimate aim.” Case law has not yet developed to provide further clarity as to the exact meaning of these words in relation to retirement, but you can gain some indication from the ACAS guide referred to above.
An employer can no longer dismiss an employee on the grounds of retirement. An employer would instead have to justify the dismissal on the grounds of performance or lack of capability to do the job.
There is no requirement to discuss retirement at all, but it would be sensible to do so for planning purposes. Just make sure that you also discuss the future plans of younger workers as well, perhaps as part of an annual appraisal. Direct questions such as, “When are you going to retire?” should be avoided. You do not have to treat people of different ages exactly the same, but you must be fair and consistent.
An employee may state that they intend to retire on a certain date and then change their mind. However, once they have provided notice in writing, an employer is under no obligation to allow them to withdraw their notice. Also note that any contractual agreement to retire at a certain date is unlikely to be valid.
If you have any doubts about the procedure involved then please contact Justin Sadler on 0118 958 9711 or[email protected] and I will be happy to provide further advice based on your specific circumstances.