Retirement Abolished Thomas Mansfield Analyse the Age of Reasonable Retirement

Online, March 22, 2011 (Newswire.com) - We have already written about the Coalition's pledge to abolish the default retirement age. This is now to be a reality with effect from 5 April 2011.

Employers will have two options: abandon its retirement age altogether, or else retain a fixed retirement age. If fixed retirement ages are to be retained, you will need to be able to justify the retirement age, whether it is company-wide or used for particular positions. If fixed retirement ages are abandoned, you will still need to show, on a case-by-case basis that you acted fairly when deciding to dismiss a particular employee and that such dismissals were not tainted with age discrimination.

Some employers have no fixed retirement age. While this may lead to uncertainty for the organisation with the circumstances of each individual to be considered on case-by-case basis, this is no different to the position with regard to employees generally; it should be possible to plan on the assumption that employees will make a contribution to the business, regardless of age. If performance or health issues do arise, these can be dealt with in the usual way, as they would be for any employee.

If on the other hand you wish to retain a fixed retirement age you will have to be able to show that there is a real business need - i.e. that a legitimate aim is being met and that having that particular retirement age meets that aim.

So far, the following have been found in case law to be legitimate aims in the context of retirement:

Workforce planning;

Facilitating the recruitment and retention of younger employees;

Contributing to a pleasant workplace and protecting the dignity of the older workforce by not requiring them to undergo performance management procedures;

Avoiding adverse impact on pension and benefits - i.e. the increased cost of spending by providing such benefits to all the workers;

Ensuring a high quality of service or ensuring continued competence;

Having an age-balanced workforce and inter-generational fairness or job sharing opportunities amongst generations.

Arguably, two of these aims appear to be tainted with discrimination, namely avoiding the unpleasantness of performance management for older employees and also ensuring competence, but these factors have been found to be legitimate aims in the context of retirement.

If a fixed retirement age is being abandoned this should be removed from contracts of employment and staff should be notified of the change.

There is currently some confusion as to the last date on which an employee can be compulsorily retired under the old law. The general consensus appears to be that the last date is 5 October 2012 assuming that an employee is given 12 months' notice of termination to be retired on 5 April 2011 and is granted a six month extension. This extension arises when an employee exercises his or her right to request to work beyond retirement.

This is currently the subject of debate but we hope to be able to provide you with further updates and a definitive answer once the matter is ironed out.

Thomas Mansfield Solicitors, winners of the Innovation Award at the Law Society's Excellence Awards 2009, are specialist employment solicitors ( http://www.thomasmansfield.com/ ) , London based, who handle legal disputes concerning areas of employment.

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