Can employees choose when to retire?
Flexible retirement
93-year-old Mr Tollon had been a crossing patrol officer for 24 years when he was made redundant. He said his job kept him motivated and he would have liked to continue in it. Whilst most employees don’t choose to work this long, the cost-of-living crisis means more are working longer.
The default retirement age was abolished in 2011. You can now only have a fixed contractual retirement age if you can objectively justify it - and this is extremely difficult to do for most job roles. So, most employers operate a flexible retirement clause (see The next step ) or policy (see The next step ) permitting staff to choose when to retire.
Tip. Employees don’t have to wait until a particular birthday to retire. Provided it’s their own choice, they can retire when they want. It will constitute a resignation, so they’ll still need to give due notice.
Trap. Don’t put pressure on anyone to retire; it must be the employee’s decision, otherwise you risk an age discrimination claim.
Tip. If an employee requests a phased retirement, such as by reducing their hours, ask them to submit a request for flexible working and then deal with that as you would for any other employee.
Retirement notice
Once an employee has given you notice to retire, it’s legally binding and they can’t subsequently change their mind without your consent.
Dismissal options
What if an employee doesn’t give you notice to retire though? Retirement isn’t a potentially fair reason for dismissal, meaning you can’t dismiss someone just because they’ve reached the age of 65, 70 or whatever. However, they can be made redundant, as happened in Mr Tollon’s case, if it’s a genuine redundancy situation, you go through a fair redundancy procedure, and they’ve not been selected because of their age.
Trap. Don’t engineer a redundancy situation to get rid of an older employee, and don’t be tempted to manipulate your selection criteria to select them. Tribunals will easily spot if you’ve dressed up a retirement dismissal as a redundancy.
Your other possible option for dismissing an older employee would be a capability-related dismissal. However, you must have genuine performance concerns before taking action under your capability procedure, and this process will take time.
Tip. Consider whether you’d performance manage a younger employee for the same poor performance issues. If you’re confident you would, you should be fine to invoke your capability procedure.
Tip. An informal discussion with an employee about their performance shortcomings might be sufficient to make them think about retirement. Don’t ever link their poor performance or declining productivity to their age though and don’t make age-related assumptions. Instead, be constructive and consider ways to help them improve, but advising them that the next stage, if there’s insufficient improvement, would be formal action.
For a retirement clause and a retirement policy, visit https://www.tips-and-advice.co.uk , Download Zone, year 26, issue 10.
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