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6 April passed without quite the bang that it should have caused. That was the date the Default Retirement Age was finally put to rest. Unless you have employees currently subject to the transitional regulations, you can no longer have a compulsory retirement age, unless you are prepared to justify it. Justification is going to be difficult, although not impossible. No more will “retirement” be a potentially fair reason for dismissing someone. You will only be able to bring a contract of employment to an end in such circumstances by citing “capability” or “some other justified reason” as the reason for dismissal. For employees over the age of 65 this is going torequire a lot more work than before.
There is currently a real paucity of case law to assist in predicting just how easy it is going to be to justify retiring your employees. The approach of the UK Courts thus far has not been the same as the European Court of Justice. In Europe,they have tended to be more understanding of organisations that are looking to set specific retirement ages (for example one case involved a German law restricting applications to join the fire service to those who are under 30, and this was held to be justified.) However, in the UK, the Courts have not been as accommodating. Thus they have not accepted as being justified, an age bar of 36 for air traffic controllers, a compulsory retirement age of 65 for part time judges, or a retirement age of 48 for assistant referees of professional football matches.
Consider very carefully whether there remains any material advantage to be had in retaining a compulsory retirement age. If there is, you must take careful steps to ensure you can justify it in the event that you are challenged. You will need to set out in writing the justification of the retirement age you have chosen, and then look to consider what evidence you can find to support that reason. You will also need to look carefully at what other options there may have been for achieving the same result.
The alternative is to “go with the flow”, in other words to abandon the retirement age altogether and work within thenew environment. This need not be as difficult as it might appear, but it will require planning. It will involve a review of your system for performance management, not just for those of your staff who may be approaching their twilight years, but for the whole of your workforce. This is why April 6th was so significant - it is not just about managing your older employees.
You will therefore need to be having “regular conversations" with all your employees, and the content of those discussions needs to be considered very carefully in advance.
Above all else, you will need to ensure that you have a fair system for dealing with poor performance, and that system will need to be consistent regardless of the age of the employee concerned.
To some extent retirement has been an issue which employers have chosen not to deal with unless they had no choice but to do so. That is not surprising. The law was confusing, with its anti-age discrimination provisions sitting side by side with a plainly age discriminatory default retirement age. But it is contradictory no more. Since 6 April the world has changed.
Click here to read the full newsletter (Employment Watch, Spring 2011).
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