VSJ – Feb 2007 – Work in Progress

Here, Sarah Bird, of Browne Jacobson, discusses the implications of the new legislation from an employer’s perspective. If you’re an employee, though, the information is equally useful. You just view it differently.

The Employment Equality (Age) Regulations 2006 came into force on 1 October 2006. The Regulations protect workers of all ages from age discrimination and impact on almost every aspect of the employment relationship – from recruitment and promotion to dismissal. They will potentially affect many commonly established practices, from the wording of job advertisements to the sending of office birthday cards. Increasing awareness of age diversity throughout your business is crucial. The message is clear focus on skill and ability and not age.

The Regulations

In summary the Regulations:

  • prohibit unjustified age discrimination in employment;
  • require employers who set their retirement age below the default age of 65 to justify or change it;
  • introduce a new duty on employers to consider an employee’s request to continue working beyond retirement;
  • require employers to inform employees in writing, at least 6 months but not more than 12 months in advance, of their intended retirement date and their right to request continued working;
  • remove the upper limit for unfair dismissal and redundancy rights;
  • permit service-related benefits up to five years’ service;
  • leave occupational pensions largely unchanged – most age-related rules found in occupational pension schemes are effectively exempted; and
  • remove the age limits for Statutory Sick Pay, Statutory Maternity Pay, Statutory Adoption Pay and Statutory Paternity Pay.

Retirement Notification

Businesses should be preparing for the new rules on retirement. Identify retirements that are coming up in the next 12 months or so and prepare standard letters to be sent to employees notifying them of their retirement date and of their right to request to continue working.

The important things to remember are:

  • That notification of retirement must be sent out within the time limits laid down;
  • employees must be notified of their right to request continued employment beyond retirement; and
  • businesses must consider requests for continued working beyond retirement in the way laid down in the Regulations.

When you have to send the notification of retirement depends on whether the retirement is before or after 1 April 2007. In almost all cases where the proposed retirement date is before 1 April 2007, it is best to send out the notification of retirement as soon as possible. For retirements on or after 1 April 2007, the notification of retirement should be sent between 6 and 12 months before the retirement date.

If you receive a request from an employee to continue working beyond retirement you should follow the steps set out in the table below:

Procedure for dealing with requests for continued employment beyond retirement


Employer’s action

Step 1 Employee submits request to continue employment Either agree to request or arrange a meeting “within a reasonable time” – sending the employee a letter inviting them to a meeting. If it is not reasonably practicable to hold the meeting within a reasonable time, you can decide without holding a meeting whether or not to grant the request, so long as you have considered any points the employee wants to make.
Step 2 Meeting date Listen to what employee has to say and decide whether to comply with request.
Step 3 Within a reasonable time Send the employee notifying them of the decision as soon as reasonably practicable.
Step 4 Employee appeals Arrange and conduct appeal hearing.

As a business you should consider the factors you plan to consider when dealing with requests to continue working. It is a good idea to prepare a list of criteria to decide whether to agree to requests to continue working beyond retirement. For example the approach could be:

  1. To never grant such request unless there is a staff shortage, difficulties in recruitment or succession or a short term project that needs completing.
  2. To always grant the first request for one year but not subsequent ones unless the factors in (a) apply.
  3. To grant all requests up to a maximum age but not thereafter.
  4. It could be dangerous to grant or refuse requests on the basis of performance. If for any reason the retirement defence to an unfair dismissal claim, the reason for dismissal will probably be capability. The dismissal will then be unfair unless a proper capability procedure is in place.
  5. Requests could be subject to an occupational health check so long as that can be justified – which it probably would be if there is any physical element to the job.

So long as the new rules on retirement are complied with, there should be no risk of unfair dismissal claims arising from compulsory retirements of employees over the normal retirement age or (if there is no normal retirement age for that employment) over the age of 65. A normal retirement age below age 65 is only permissible if it can be justified as a “proportionate means of achieving a legitimate aim”.

Browne Jacobson LLP provides legal services to the IAP and its members. Members are entitled to a free 30-minute telephone consultation with them on any topic related to their professional activities. See www.brownejacobson.co.uk for more details.

Further information on age discrimination can be found at www.agepositive.gov.uk.

[Interesting project or development? Let us know at eo@iap.org.uk!]

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