Introduction

The Equality Act 2010 amended the Employment Equality(Age) Regulations 2006 that previously governed the process of handling requests for retirement at 65 or commonly known as the default retirement age. This article deals with the current retirement process that an employer will have to comply with when contemplating retiring an employee since the default retirement age has been removed, except in very exceptional circumstances where it can be objectively justified.

Voluntary retirement

If an employee elects to retire voluntarily, he (or she) can do so by:

- informing the employer of his/her intention

- providing the usual notice provisions in the contract.

If the contract is silent as to the amount of notice to be given, the relevant statutory notice to terminate the contract should be given. Such notice, when accepted by the employer, will be sufficient to terminate the contract bringing the working relationship to an end.

All the employer will need to do is acknowledge receipt accepting the employee’s resignation at the appointed agreed date.

Removal of the default retirement age As the current legislation has removed the default retirement age of 65, the best way to handle retirement is for both employer and employee to talk openly to each other.

These talks should include the future plans of the business, the expectations of the employee and managing the performance of the employee. If these open discussions become regular and routine features in the workplace, with all employees and not just those approaching their more senior years, it is likely to breed a more fluid workforce and in turn hopefully prevent much negativity in terms of dealing with retirement.

In this way, the employee understands the expectations from the employer and there is fairness and consistency in the work place too.

Retirement in the transport industry

Certain employers in the transport industry may be able to justify retirement lawfully at a set age provided it can be objectively justified. (For example, in the airline industry, retirement of commercial pilots at 65 is now more acceptable.)

It is believed that provided the reason to impose an age limit for retirement is a proportionate response to achieve a legitimate aim. (In the example of the airline industry, the aim is to ensure that the pilot maintains physical fitness and mental agility when flying passengers, so the reason for retiring pilots at 65 is objectively justified and unlikely to be challenged. Furthermore, matters such as health and safety of the employees, the passengers and other flight users should also be considered before termination of the employment on grounds of retirement.) Even then, the test of objective justification is usually quite difficult to prove and it is possible that an employer may still face a claim in the tribunal.

In the road transport industry, unlike the airline industry, there is no compulsory or default retirement age. No employer in a road transport business, therefore, will be in a position to force retirement upon its employees. So what is the best practice solution?

First and foremost, every employer regardless of size should encourage good employee practice and have regular and open workplace discussions about the future plans of the business, its expectations from its employees and manage its employees' performance. If this practice is established and commonplace then trust and confidence is established within the workforce too.

The employer can undertake these conversations at regular informal meetings with its employees so that the employer will be able to plan for its workforce and by doing that also plan for succession of its aging workforce in a fair and proportionate way. This avoids potential claims of discrimination and ensures that goodwill is maintained. In any event it is preferable to consult with the employee to establish what assistance can be given before moving towards termination of employment. In general terms, as employees approach retirement most will meet with the employer to discuss their plans for retirement. Some will request shorter working hours or working week whilst others would prefer to work on a free lance basis or undertake occasional work. In each case if there is open and meaningful discussion, it may be possible to accommodate some or all of these requests for flexible working or reduced working hours/weeks.

From personal experience, the situations that lead employers to seek legal advice on termination of employment of employees approaching retirement are usually twofold, as follows:

Health-related issues

The first situation is when the employer finds that it is faced with problems associated with the onset of an employee’s health related matters, which triggers the “conversation with the employee” as to what their plans are for retirement. This is particularly if the employee’s ill health becomes progressively worse so that he (or she) is unable to undertake routine duties.

In this situation, the legal advice is to tread carefully. The employer is advised to make sure that it obtains a medical report by seeking prior written consent from the employee to write to their general practitioner or consultant, before having any “retirement discussions” or termination of employment conversations. The written request to the medical expert to supply a report should include a list of the duties undertaken by the employee and advice on what reasonable adjustments should be made in each case.

If the report states that the employee should not undertake driving duties or other duties associated with transport work at all, there may then be grounds for terminating the contract, subject to following a fair process, considering reasonable adjustments and alternative roles (such as office administration) before concluding the employment relationship on grounds of capability.

As already mentioned above, an employer should also consider what reasonable adjustments it can implement to assist the employee with undertaking routine duties before deciding to terminate the relationship. If there are none available, then provided the employer complies with a fair process prior to terminating the employment relationship on grounds capability and the termination is justified in the circumstances, the employer is likely to have a better defence should it face a claim in the tribunal for age discrimination.

Level of performance

The second situation is when the employee’s level of performance starts to move downwards.

Where the performance or capability is an issue and informal discussions have not been able to resolve matters, the employer should formally invite the employee to meet with it and raise the question of performance.

As stated in the ACAS Code of Practice, the employee should be given the right to be supported in the course of the meeting with either a fellow work colleague or member of a trade union. The meeting should highlight the areas of performance that is causing concern to the employer. A discussion should take into account training issues and where these are identified the employee should be encouraged to undertake further courses if appropriate or to shadow another employee. A realistic and quantifiable performance plan should be drawn up, a time limit agreed with the employee so that improvements can be measured and monitored accordingly. Regular meetings should follow to apprise the employee of progress made and if progress is not made then a further formal meeting should be called to discuss possible termination of employment. Provided the reason to terminate is fair, it is a proportionate response to the situation, and the employer has complied with a fair procedure, the chance of successfully defending a claim,( should one be brought in the tribunal), is increased.

Concluding points

For smaller employers, the recommendations in this article may seem a costly and time consuming process and the current economic climate makes it even more challenging than usual for the employer to use whatever resources available to it to comply with the procedure. Nevertheless, it is advisable for the employer regardless of size to adopt the process described above and adapt it to suit its needs. For example for the smaller operator, the number of monitoring sessions or meetings may be reduced whereas for the larger operator it may have more opportunities with in its operation and human resources to assist in complying with the recommended procedures.

Practice has shown that the more each employer can invest in having open dialogue in the workplace with its employees, the more successful it will be in managing recruitment and retirement of its workforce in the long term. It will also be able to manage better its development of employees and offer appropriate training to those in need of such application.

On a final point, do not request employees to sign away their employment rights unless this is done under the terms of a Compromise Agreement and the employee has taken independent legal advice. This is a complicated legal process set out in legislation and therefore, this be a method and employer wishes to utilise, please seek legal advice. These regulations are here to stay for sometime and the employer is strongly urged to take careful note of the recommendations in the regulations to avoid at all costs a claim for age discrimination.


For more information please contact
Simonne McIvor of
Pellys Solicitors Limited
01279 758080