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The Retirement Procedure

Where an employer is genuinely planning a retirement based on the employee reaching retirement age, and where the procedure set out in Schedule 6 of the Regulations is followed, then it will be considered a planned retirement.  

The duty to inform and consider is effectively a measure to prevent some employers using unplanned retirements as cover for dismissals, redundancies, etc

Employers who wish to retire an employee must:

• Notify the employee, in writing, not more than 12 months and not less than 6 months beforehand of  intended retirement date; and
• The employer must also inform the employee of their right to request to work beyond the intended retirement date

There is a continuing duty to inform of the right to request to continue working right up to the 14th day before the operative date of termination.  If the employer fails to inform the employee of the right to request the Tribunal can impose a penalty of 8 weeks pay (capped at the statutory amount) (Schedule 6 (11) (3)).  Similarly,

Employees wishing to remain in employment must:

• Put their request in writing;
• State that it is a request not to retire;
• State that they want to work either
• Indefinitely; or
• For a stated period; or
• Until a certain date.
• If they have not yet been notified of a date then the employee must give date on they believe they will be required to retire

There can only be one request for each intended retirement.  This means that if they are successful then they can make another request when the employer next intends to retire them.

If the employee makes a request, the employer will be obliged to consider it if it was made at the earliest, 6 months before intended retirement date and, at the latest, 3 months before the intended retirement date. However, the 3 month deadline does not apply if the employer did not inform the employee about the right to request.

A meeting must be held with the employee to discuss the request and a decision made within a reasonable period. Although this has not been defined, employment will continue until the employee has been informed of the decision, even if this is after the intended retirement date. If the employer agrees to the request, he does not have to hold a meeting although it would be good practice to do so.

The employee has a right to be accompanied at this meeting.  The companion, including a trade union rep, must work for the same employer (this right is not the same as the one conferred by S10 of the Employment Relations Act 1999). Refusing the employee the right to be accompanied can result in a Tribunal making an award of 2 weeks pay (subject to the statutory cap) (Schedule 6 (12) (3)).

After the meeting or the employer’s consideration of the request, the employer must give a written decision to the employee stating, if the request is accepted, whether the employment will continue indefinitely or for a stated period.  If the request is refused, the employer’s decision must confirm that the employee is to be retired and the date on which that retirement will take effect.  There is currently no statutory need to explain or justify the refusal. 

The right to request to work beyond retirement age has been likened to the Flexible Working rights currently enshrined in law.  They began the same way, with employers not having to justify their decisions.  However, the recent case of Commotion Ltd v Rutty saw that change.  In that case the EAT gave Tribunals license to challenge decisions made by employer to ensure that they were not just paying lip service to the legislation.

There is currently no reason to believe that they will not adopt the same approach with the EE(A)R 2009 rights.  For this reason we would advise employers to establish sound business reasons that will stand up to scrutiny for turning down requests to work beyond retirement.  This is not only good practice, but it will afford employers a better level of long term protection against discrimination claims.

The lack of any need to provide fully reasoned refusals has been criticised heavily by some as excusing an employer who decides to treat the process of considering the employee's request as a charade. The lack of specific reasons will also make it difficult for the employee to mount an effective appeal against the employer's decision.

There is a right to appeal and the statutory dismissal procedure will NOT apply.  This is because the duty to inform and consider procedure mirrors the requirements of the DDP, so there is no need to go through the process twice!

The right to appeal can be exercised because the employer has rejected the request entirely or because he has only agreed to carry on employing the employee for a shorter period than requested. The employer does not necessarily need to hold a meeting to consider the appeal.