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New Retirement Pocedures and the Transitional Arrangements

Retirement Age

NB: employers should bear in mind that under current employment law they have already have an obligation to give notice of dismissal, whether on retirement or for some other reason

What legal rights or obligations exist before 1 October 2006?

None.  Legal rights and obligations under the age legislation will only apply when the legislation comes into force

What legal rights or obligations exist after 1 October 2006?

From 1 October 2006, employers won’t be able to retire employers below the employer’s normal retirement age or, where there is no normal retirement age, below 65.  If the normal retirement age is below 65, it must be objectively justified.  New procedures mean that employers will have to give employees advance notice of retirement and that they can ask to work for longer. 

Employers who want to terminate the employee’s employment before the normal or the default retirement age must have another fair reason for dismissal and follow the normal dismissal procedures. 

I’m due to retire soon after 1 October 2006; can I ask to stay on?

You only have a legal right to ask from 1 October 2006 when the legislation comes into force.   However, there’s nothing to stop you asking your employer anyway.  A good “age positive” employer should be prepared to consider your request sympathetically.

I have an employee who’s due to retire soon after 1 October 2006.  What should I do now?

Transitional arrangements will apply to retirements from 1 October 2006 to 31 March 2007.   They are set out in schedule 7 to the regulations.

The procedures for ensuring a retirement dismissal is fair are summarised below. 

Notice given before 1 October 2006

If you give the employee notice before 1 October that they are to be retired after 1 October 2006 but before 1 April 2007:

• notice must be at least the period required by the contract of employment; or
• where the period of notice required by the contract exceeds 4 weeks, at least 4 weeks (see note below).

On 1 October, or as soon practicable afterwards, you will have to: 

• write to your employee telling them of the right to request working longer.

The employee can make the request after their contract has been terminated but not more than 4 weeks afterwards. 

A meeting to discuss the request, and any subsequent appeal meeting, must be held within a reasonable period.  The employee can ask to be accompanied by a companion

Notice given after 1 October

If you give the employee notice after 1 October that they are to be retired before 1 April 2007:

• you must write to the employee notifying them of the intended retirement date  - giving the longer of contractual or statutory notice; and
•  you must tell them in writing that they have a  right to request working longer.

An employee who wants to exercise this right should make a written request:

• where possible, 4 weeks before the intended retirement date; or
• as soon as reasonably practicable after being notified of the “right to request”.

The request can be made after the employee’s contract has been terminated but not more than 4 weeks after termination.

A meeting to discuss the request, and any subsequent appeal meeting, must be held within a reasonable period.  The employee can ask to be accompanied by a companion

I have employees due to retire from 1 April 2007.  What do I have to do?

Anyone retiring on or after 1 April 2007 will be subject to the full retirement procedure as stated in the Employment Equality (Age) Regulations 2006. 

What happens if I fail to comply with these notification requirements?

You may have to prove that the reason for dismissal was retirement and that it wasn’t unfair.

I can get my pension at 60 and I don’t want to work longer

Individuals are free to retire when they want.   However, you should make sure that your income in retirement will meet your needs not just immediately but in the longer term too.

My employer has a normal retirement age of 68, can I be made to retire at 65?

Your employer won’t be able to rely on the default retirement age of 65 to retire you earlier than he would otherwise.  That is likely to amount to unfair dismissal unless your employer can objectively justify the earlier retirement date.

Note:  If the employer gives this notice and follows the correct retirement dismissal the dismissal will not be unfair.  However, this does not affect the current position on notice due under the contract of employment.  If the employee is due more than 4 weeks' notice of termination under the contract or the statutory notice provisions, the employer will still be liable for breach of contract if he gives less than the amount of notice due.

DTI – April 2006