Age discrimination: frequently asked questions

Sarah-Marie Williams of Clyde & Co continues this month's series of articles on age discrimination by answering frequently asked questions on the Employment Equality (Age) Regulations 2006.

The Age Regulations provide for a default retirement age of 65. Does this mean that employees will automatically retire at this age?

No. Employers will be able to continue to employ individuals past the default retirement age. Under the Age Regulations all employees will have the right to request to work beyond the age of 65 or any other retirement age set by the employer.

The Age Regulations place new procedural obligations on employers where the reason for dismissal is retirement. What are these obligations?

The Age Regulations set out detailed procedural requirements that must be fulfilled before an employee's employment can be terminated by reason of retirement. The employer is required to inform the employee of his or her intended retirement date and of the right to request not to retire at least six months but no more than 12 months before the retirement date. An employee who has been notified of this right and who wishes to request not to retire must do so in writing at least three months but no more than six months before the intended retirement date. The request must specify whether the employee wishes to continue working indefinitely or for a stated period. The employer will have a duty to consider all requests pursuant to a new procedure set out under the Regulations. If the employer decides to allow the employee to continue working, it is required to write to the employee setting out whether he or she will be allowed to continue working indefinitely or for a stated period.

What is the new duty to consider procedure?

Under the Age Regulations employers have a duty to consider any request from an employee to work beyond his or her retirement date. The employer must either agree to the request or arrange a meeting with the employee, within a reasonable period, to discuss the matter.

What are the grounds upon which an employer can refuse an employee's request to continue working?

The Age Regulations do not require an employer to give a reason for a refusal to grant an employee's request to continue working. The obligations on the employer, under the Regulations, are only to consider the request, and to follow the correct procedures in relation to adhering to the time limits and holding a meeting with the employee to discuss the matter. However, an employee has the right to appeal a decision not to be allowed to continue working and, if he or she does so, the employer is required to arrange an appeal meeting. It is considered that it will be good practice to have some objective justification for the refusal.

If the contract of employment provides for a retirement age, will the employer still need to follow the retirement procedures?

Yes. The employer is still required to follow the retirement procedures and failure to do so will give rise to a potential unfair dismissal claim. Although references to intended retirement dates in contracts of employment may be preferable to setting out a retirement age, this will not absolve the employer of the duty to follow the retirement procedures. The employer will still need to notify the employee of his or her intended retirement date and of the right to request not to retire, at least six months but no more than 12 months before the retirement date. In addition, the duty to consider procedure must still be followed.

Following the introduction of the Age Regulations, will the statutory disciplinary and dismissal procedures still apply to dismissals by reason of retirement?

The statutory disciplinary and dismissal procedures will apply to all retirement dismissals until the Age Regulations come into force on 1 October 2006. However, from this date, the statutory disciplinary and dismissal procedures will no longer apply to retirement dismissals and the new retirement procedures should be followed instead.

If an employee has made a request not to retire and is allowed to work past the age of 65, can the employer subsequently dismiss him or her at a later date?

In order to dismiss the employee by reason of retirement at a later date, the employer is obliged to follow the same retirement procedure at the later date. The employer will, again, need to notify the employee of his or her intended retirement date and the right to request not to retire, at least six months but no more than 12 months before the retirement date. It will also need to ensure that the duty to consider procedure is followed in respect of any such request. The right to request and the duty to consider obligations will apply each time a retirement dismissal is considered, irrespective of the number of extensions of work that are agreed.

If the employee is dismissed for a reason other than retirement, the dismissal will need to be fair, under the usual unfair dismissal rules, if potential unfair dismissal proceedings are to be avoided. It will be open for an employee to show that the dismissal is not a genuine retirement, is procedurally unfair and/or that the statutory dismissal procedures have not been complied with. The Age Regulations will remove the age limit for bringing an unfair dismissal claim so, from 1 October 2006, employees aged 65 or over will be eligible to claim unfair dismissal.

Is it possible for a dismissal by reason of retirement to be automatically unfair?

Yes. First, a retirement dismissal will be automatically unfair where the employer has not informed the employee of his or her intended retirement date and of the right to request to continue working at least two weeks before the retirement date.

Second, a dismissal will be automatically unfair where it takes place before the duty to consider procedure has been completed, for example where it is effected before the employer has had the meeting with the employee or before it has informed the employee of its decision.

Third, a dismissal will also be automatically unfair if the employer has failed to consider an employee's appeal against a decision to retire him or her.

What is the position in respect of retirements due between 1 October 2006 and 31 March 2007?

The Age Regulations set out transitional provisions that will apply to retirement dismissals taking place between 1 October 2006 and 31 March 2007. There are different rules depending on whether the notice to retire the employee is given before or on or after 1 October 2006.

If an employee is given notice prior to 1 October 2006 that he or she will be retired on or after that date but before 1 April 2007, the notice should be the lesser of four weeks' notice or contractual notice. The employee should also be notified of his or her right to request not to retire on, or as soon as practicable after, 1 October 2006. The employee may make a request not to retire up to four weeks after his or her notice period has expired.

If an employee is given notice on or after 1 October 2006 that he or she is to be retired before 1 April 2007, the notice should be the contractual notice (or the statutory minimum if that is greater). The employee should also be notified of his or her right to request not to retire before or on the same day as the notice of dismissal.The employee may make a request not to retire up to four weeks after his or her notice period has expired.

Next week's article will feature a case study on the retirement aspects of the Employment Equality (Age) Discrimination Regulations 2006.

Sarah-Marie Williams is a solicitor in the employment team at Clyde & Co (sarah-marie.williams@clydeco.com)

Further information on Clyde & Co can be accessed at www.clydeco.com