Retirement clauses in Handbooks

Peninsula Team

April 21 2011

With the repeal of the default retirement age, it will shortly no longer be possible for employers to use the statutory retirement procedure to dismiss an employee upon reaching the age of 65. Many clients have a clause in their employees’ employment documentation that provides for a normal retirement age of 65, and in accordance with this, will have initiated the statutory retirement procedure in relation to the retirement dismissal of employees. Unless any retirements that are already in motion have been done in accordance with the transitional arrangements, this clause can no longer be relied upon and will become obsolete. We wish to reassure you that we believe the continuing existence of this clause in your employees’ employment documentation is not unlawful. However, we emphasise greatly the need to phone the 24 Hour Advice Service in every instance of enforced retirement in your business, and additionally at every stage of any residual retirement process, so that our advisers can make sure you are acting within the legislation. Briefly, the transitional arrangements for client in England, Scotland and Wales, during the removal of the default retirement age mean that retirement may still be carried out provided: • the employee must already be 65, or will turn 65 by 30th September 2011; • a minimum of 6 months’ and a maximum of 12 months’ notice should be given, and this should be given at the latest by 5th April 2011; • any requests to continue working must be made by 4th January 2012; • the last date on which a safe retirement dismissal can take effect is 3rd October 2012. The transitional arrangements in Northern Ireland are somewhat different and specific advice should be taken. For more information on the changes to the retirement procedure, call Peninsula’s 24 Hour Advice Service today on 0844 892 2772. Businesses in Northern Ireland should call us on 0844 892 2786.

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