Retirement and the right to request to continue working

Are you ready for the new procedures?

From 1st October, the new Age Discrimination law will bring changes to the way employers deal with staff who reach retirement age.

Up to now, employers have been free to set a single retirement age for men and women and employees automatically retire when they reach that age.

From 1st October, two things change:

• A National Default Retirement Age of 65 will apply unless employers can justify a lower age;
• Employers must give advance written notice of retirement, usually a minimum of six months, and must consider an employee's request not to retire.

The Default Retirement Age of 65

The Government has decided to use 65 as the age at which employees can be compulsorily retired, provided the correct procedure is followed. This applies regardless of what an employer's customary or contractual retirement age might be.

• Where an employer's customary or contractual retirement age is 65 or above, it need not be changed.
• Where an employer's customary or contractual retirement age is below 65, the employer must be able to objectively justify that retirement age or risk claims for Age Discrimination and Unfair Dismissal.

If your business has a customary or contractual retirement age lower than 65, you should seek advice from the Telephone Advice Service.

Notice of Retirement and the right to request not to retire

For retirements taking place between 1st October 2006 and 31st March 2007, unless written notice has already been served before 1st October, at least the statutory minimum period of notice must be given in writing. This is one week's notice for each year of service, up to a maximum of 12 weeks' notice. The employee must also be told of the right to request not to retire.

For retirements due to take place after 1st April 2007, at least six months' written notice must be given.

The employee then has the right to make a written request not to retire, subject to certain time limits. When the employee makes such a request, the employer must hold a meeting to consider it and hold a further meeting to consider any appeal.

If the procedure is not followed correctly, an employer may be liable for Unfair Dismissal.

The Mentor Telephone Advice Service can advise on the precise procedures to be followed and assist with documentation.

Voluntary Retirements

There is, of course, nothing in the new law to prevent employees from retiring at an age lower than 65 if they want to. They might want to do this, for example, because they have pension provision or because they have simply been looking forward to finishing work and doing other things.

However, because employees can claim Unfair Dismissal at any age, where an employee suggests "retiring" below 65 years of age, the employer should handle this as a resignation, and make it clear the employee is free to continue working up to 65 if he or she wants to. Seek advice from the Telephone Advice Service about the appropriate action to take where this happens.

The new law on retirement - in summary

• Default retirement age of 65 will apply unless employer can justify a lower age
• Advance written notice of retirement must be given
• Employees have the right to request not to retire
• Employers must meet an employee to consider a request but do not have to give reasons for refusal

Always contact the Mentor Employment Law before dealing with any employment issues