Retirement rules and how they impact your business.

Peninsula Team

April 30 2015

Recent news reports on a tribunal case concerning the forced retirement of cricket umpires when they reached the age of 65, due to the slowing of their reactions, has brought the issue of retirement back in to the HR spotlight. Retirement is swiftly becoming a grey area that employers are afraid to approach due to the threat of a potential age discrimination claim hanging over them. With full knowledge of the current situation, employers can broach the subject with confidence and security in their actions.

Firstly, retirement is no longer a potentially fair reason to dismiss someone following the removal of the Default Retirement Age (DRA) in 2011. This means that older workers can voluntarily choose when they give up work and an attempt to force them to retire, or a dismissal due to their age, could constitute age discrimination on the employer’s part.

Previous cases have shown that employers are able to introduce and apply a compulsory retirement age within their company, so long as they can objectively justify doing so. The objective justification will require a strong business need and a legitimate aim which requires the company to retire older workers. Previous examples of this business need have been the need to attract and retain newly qualified professionals in to the business or succession planning. Choosing the compulsory retirement age also has to be carried out with care and may have to be justified; 65 may no longer be a fair retirement age following the removal of the DRA and a growing number of employees who are working later in life. Passing the ‘objective justification’ rest is difficult and should not be relied upon without specific advice.

Concerns over age discrimination and retirement do not mean that companies have to operate in the dark about their employees’ plans. You can ask older employees what their future plans are in the same way that you might do this for other employees, for example, during annual appraisals. Any questioning put to the employee should be non-direct and non-discriminatory, such as “What are your future plans?”, asked in the same way as you would ask other employees, rather than “Are you going to retire soon?” If the employee reveals to you that they are planning or wanting to retire soon then you can discuss any arrangements which will make this transition easier. Make sure that any discussions with your employees are documented to provide evidence of a non-discriminatory attitude.

If you need any clarification on this issue then contact the Peninsula Advice Service on 0844 892 2772.

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