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June 2011 newsletter

June 29th, 2011

Retirement

 

The government has abolished the default retirement age of 65, so unless an employer has given notice of retirement before 6th April 2011, it is only in exceptional circumstances that an employer can justify compulsory retirement. An employer can only justify dismissal because the employee has reached a certain age if the employer’s contractual retirement age can be objectively justified. Objective justification has to be a proportionate response to a legitimate aim. In practice this is likely to be difficult for an employer to justify.

 

Dismissal for retirement may be justified up to 30th September 2011

If there is no normal or contractual retirement age, then an employee cannot be dismissed fairly because they have reached a certain age unless the employer has given notice of retirement before 6th April 2011 to take effect up to 30th September 2011 (or 30th September 2012 where the employee has been granted an extension) and the employee was age 65 on or before 30th September 2011.

A dismissal for retirement can be fair as long as:-

1. The employee has reached age 65 by the retirement date which must be no later than 30th September 2011; and

2. The employer gave between 6 months and 12 months notice before 6th April 2011;and

3. The employer informed the employee of their right to request an extension to their retirement date; and

4. If the employee made a request to extend their employment, the employer has considered any request, offered the employee a meeting to consider the request and offered the employee an appeal against a refusal to extend the time and a meeting to hear that appeal.

If the employer gives less than 6 months notice, or that notice was given on or after 6th April 2011 then unless the employer has a contractual retirement age which can be objectively justified, and acts reasonably in relying on that reason, the dismissal will be unfair and amount to unlawful age discrimination.

 

Is the solution to have a contractual retirement age?

The difficulty with having a contractual retirement age is it must be able to be objectively justified. If the demands of a particular job are such that older employees find it more difficult to do the job effectively, imposing a retirement age would be potentially discriminatory, because peoples faculties are likely to deteriorate at a different rate, so why should age alone be the determining  factor? It is quite possible that a contractual retirement age in such circumstances would be unlawful.

There may be circumstances where, for example, there are safety implications to the employee, other workers or the public, and that regular testing or assessment of the employee cannot sufficiently reduce that risk. If objective evidence shows that the safety risks of continuing with that employment significantly rise around a certain age, which cannot be sufficiently eliminated by testing then a contractual retirement age may be justified. The ultimate question is, “Is a contractual retirement age a proportionate means of achieving a legitimate aim?”

 

Practical aspects of dealing with anolder employee

So what can an employer do about an employee who has reached retirement age?

There is nothing wrong with an employer asking an employee about their plans when they are approaching 65. Clearly when people are approaching the age they are entitled to their pension, many will want to retire, and an employer is entitled to ask in advance so that plans can be put in place to replace the employee.

If an employer believes that an employee is less effective because of their age, then they will have to consider whether or not a capability procedure is appropriate. In other words, an older employee should be treated the same as any other employee, and if their work is not up to standard, they can be put through a capability procedure the same as any other employee.

The employer must be able to specify in what way their work is not up to standard, if they cannot be specific, they risk unfairly dismissing the employee and a claim of unlawful age discrimination.

 ACAS have a very comprehensive publication which is available online called, “Age & The Workplace: Putting the Equality Act 2010 and the removal of the default retirement age 2011 into practice.” It is available  at: http://www.acas.org.uk/CHttpHandler.ashx?id=588&p=0

 

Dismissal for Capabililty

 

If an employee is not doing their job in the way the employer requires the employer should investigate whether that is due to any lack of application (in which case disciplinary proceedings could be contemplated) or whether it is due to the employee’s lack of ability in one or more of the tasks required.

 If the employer considers it to be due to any lack of ability, the employee must be informed of:-

1. How their work does not measure up

2. The standards expected

3. A timescale to improve at the end of which the employee will be assessed

4. What support & training will be given

As long as the employee is made aware in sufficient detail to enable them to know precisely what improvement is expected of them, and as long as they have been given a reasonable amount of time and a reasonable amount of support to enable them to improve, the employer is entitled to consider dismissal at the end of the improvement period if the employee has still not reached the standards expected.

At this point the employer should:-

 

1. Invite the employee to a meeting and let them know in advance:

(a) The specific shortfalls in their work

(b) That the decision could be dismissal

(c) The evidence to show that the work is below standard

(d) The right to bring a Union rep or work colleague to the meeting

 

2. If the employee is found not to have reached the standard required either:

(a) Allow a further period to improve

(b) Dismiss the employee

 

3. Inform the employee they can appeal

 

4. If there is a vacancy which is suitable to the employee’s abilities this should be offered

 

5. If dismissal is the conclusion, give the correct contractual notice

 

Although “capability” is a separate category from “conduct,” an employer should still follow the requirements of the ACAS code of practice which is at: http://www.acas.org.uk/media/pdf/h/m/Acas_Code_of_Practice_1_on_disciplinary_and_grievance_procedures.pdf

 

John Halson Solicitors specialise in Employment Law. If you have any Employment Law issues please do not hesitate to contact one of our solicitors for assistance, either by phone (0151 524 4540), email or via our website (www.rightsatwork.co.uk)

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