Longleat staff over 65 made to retire: should other employers be following on Longleat’s footsteps?
Longleat Safari Park hit the headlines recently for all the wrong reasons as it was revealed that all staff aged over 65 at the popular tourist attraction had been made to retire. The retired employees included 18 workers over 70, seven over the age of 75 and two members of staff in their 80s.
A Longleat spokesman denied the move was anything to do with the law change. In light of the timing, this seems unlikely.
This newsletter is the first of three we will be sending you over the next three weeks to bring you details of this impending change in law and guidelines on how your Company can manage these changes.
With effect from 1st October 2011, the Government will be removing the ability for you as an employer to fairly dismiss your employees who have reached the age of 65. From this date dismissal for retirement will no longer be a fair reason for dismissal. The Government says that termination should be through either discussion or capability. Older employees can still voluntarily retire at a time of their choosing and draw any occupational pension they are entitled to in line with the scheme’s rules. Removing the DRA does not mean that employees will never be able to retire. It just means that employers cannot force employees to retire at a set age unless the age can be objectively justified.
MANAGING WITHOUT THE DEFAULT RETIREMENT AGE
The Default Retirement Age (DRA) will be phased out from 6 April 2011 and no valid notices of retirement can be issued after 30 March 2011 as this is the last date on which a full six months’ notice can be given. Notices given before this date will only be valid if the retirement takes place before 1 October 2011.
You can still use the DRA between 30 March 2011 and 6 April 2011 but if you do so you must use the short notice provisions, under which an employee could claim compensation (subject to a maximum of eight weeks’ wages).
At the moment, provided that the employer goes through a proper process by giving at least six months but not more than 12 months’ notice of their intention to retire employees who have reached 65 and offer them the right to be considered for an extension and go through an appeal process if the employer says no, then there can be no claim for unfair dismissal or for age discrimination. After the DRA disappears, if you continue to retire employees your Company will risk age discrimination and unfair dismissal claims.
So what happens now? Window of time for retiring older non performing workers!
What has happened at Longleat is no doubt precisely what the proposals to abolish the DRA were designed to avoid. A statement from Longleat said that it was undergoing a "modernisation programme" and that is was "inevitable that we require people with new diverse skills and experience from a variety of backgrounds."
Whatever an employer’s reason for retiring older staff, you as an employer should be acting now if this is something you wish to do given the forthcoming changes in the law.
From the 6 April 2011 employers will be left with two choices:
· to stop using retirement ages altogether;
· or continue to use retirement ages, but only where there is – what the Government is now referring to as – an "employer justified retirement age" (EJRA).
An "employer justified retirement age" (EJRA)
Employers will not be able to defend any claims for age discrimination or unfair dismissal, unless they have an EJRA. An EJRA must be objectively justified by reference to a genuine business need (for instance workforce planning, the need for business to recruit, retain and provide promotion opportunities and effectively manage succession) or the health and safety of individual employees, their colleagues and the general public. Employers may find it difficult to establish an EJRA. To rely on an EJRA, employers will need to explain and provide evidence to support the reason for having a retirement age at all, as well as the age that is chosen, and will also have to tolerate the uncertainty of not knowing whether the EJRA can be justified until tested at Employment Tribunal. The prospect of being one of the first cases in which the courts will decide what can amount to an EJRA is unlikely to be appealing for most!
However if an EJRA is established, employers should also follow a fair procedure in retiring people at the compulsory retirement age. You should give the employee adequate notice of impending retirement and, if circumstances permit, consider any request by your employees to stay beyond the compulsory retirement age as an exception to the general policy – although it would be important in such circumstances to ensure consistency of treatment as between employees who might request to stay on.
Further Guidance:
Look out for our second newsletter next week which will focus on managing performance and retirement within the new legislation and talk you through some frequently asked questions (FAQ).
Contact People Business if you would like to discuss our fixed price options to update your contracts, employment policies and Company handbooks or if you have any questions about the DRA. Please email us at lisa.bolton@peoplebusiness.co.uk or call us on 01932 874944 or respond at http://people-insight.blogspot.com/
