Retirement – The Regulations with a sting in the tail!

 
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Saturday, 19 August 2017

Retirement – The Regulations with a sting in the tail!

“The Regulations abolishing the default retirement age have now been laid before Parliament and they have an unexpected sting in the tail,” writes Darren Newman, an employment law trainer, writer and consultant with 20 years’ experience of advising employers both large and small on employment law issues:

“The way in which the transitional provisions have been drafted means that while it is still possible to force through the retirement of someone who reaches the age of 65 between 6th April and 30th September 2011, it will not be safe to retire someone who has already reached the age of 65 by the 6th April. Some employers may have already given a notice of an intended date of retirement to employees who are over the age of 65 and which takes effect after 5th April this year. As the Regulations currently stand, these retirements will leave the employer exposed to claims for age discrimination and unfair dismissal.This is completely unexpected and may well be an error. There may also be time for the position to be corrected. Failing that however, it may be necessary to rethink current notices of retirement that have been issued. Bringing retirements forward to before 6th April is a potentially risky strategy and should only be done after taking full legal advice.”

How the transitional provisions work

“For those interested in just how this problem arises, here comes the legal stuff…The Regulations come into force on 6th April 2011. From that time there is no longer any exception for retirement in the Equality Act; the statutory procedure for requesting a deferral of retirement is abolished; and the unfair dismissal provisions allowing for a fair dismissal by reason of retirement will also go.That means that unless the transitional provisions apply, any dismissal which takes effect from the 6th April onwards and which is based on the fact that the employee is 65 or older will be a pretty clear case of age discrimination and unfair dismissal unless the employer can show that the policy of retirement is objectively justified (usually, it won’t be).

“So it’s vital to know when the transitional provisions will apply. These are set out in Regulation 5. This says that the provisions on retirement will only continue to apply ‘in relation to the employment of a person’ if two conditions are met.The first condition is that notification of retirement has been given in accordance with the Age Regulations before 6 April 2011. There’s no problem with that – that’s what we expected.However the second condition which must be met is that ‘the person will attain the age limit during the period that begins with [6 April 2011] and ends with 30 September 2011’ (Reg 5(1)(b)) The ‘age limit’ is the age of 65, or the normal retirement age, whichever is the higher (let’s just assume we’re talking about hitting the age of 65 to keep things simple).”

Do you see the problem?

“The transitional provisions do not say ‘and has attained the age limit by 30th September’, they say ‘the person will attain the age limit during the period that begins with [6th April] and ends with 30th September’.That means that an employee who is already 65 by the 6th April will not come within the transitional provisions! They have already attained the age limit and will not therefore ‘attain’ it between 6th April and 30thSeptember.If they are not within the transitional provisions and are dismissed on or after 6th April, they will be able to sue for age discrimination and unfair dismissal – even if they have already gone through a full notification procedure. The date that matters is the date they are dismissed, not the date on which they were notified of the retirement.

“This is of course a technical argument, but when you are interpreting legislation, technical arguments count. The provision is baffling and defies common sense, but it seems to me to be entirely clear. If the Regulations are not amended before being passed by Parliament, then employees who are already 65 or over will be protected against any retirement from 6th April onwards, even if they have already been given notice by their employer.

“This is going to cause a lot of employers a serious problem. There are many employees who in recent years have had their retirement deferred and employers may have expected (as I did!) that they would be able to retire those individuals provided they gave them notice before the end of March and their employment ended by 30th September. Now that we have the Regulations, we can see that that is not right. Some serious (and urgent) rethinking is in order.”

About Darren Newman

Darren Newmanis an employment law trainer, writer and consultant with 20 years’ experience of advising employers both large and small on employment law issues. He is a founder and Director of In-Company Training Services Ltd and writes regularly for XpertHR, Employers’ Law and the Equal Opportunities Review.

In-Company Training Services Ltd Website


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