Information & advice

This page will tell you all about the retirement and dismissal procedures brought in by the age regulations and covers the following topics:

“I don’t want to retire”

How will the retirement procedure work?

What if  I am given less than six months’ retirement notice?

What if retirement is not the real reason for dismissal?

Were there transitional arrangements?

“I think I’ve been unfairly dismissed”

“I’ve been made redundant”

 

“I don’t want to retire”

At the moment there is no national retirement age.

It’s important not to get ‘retirement age’ confused with ‘pension age’, as they’re different things altogether.

As you probably know, the state pension age – the age when you’re entitled to draw your state pension – is currently 60 for women and 65 for men, but employees do not actually have to retire at this age.

Working after State Pension Age does not affect your right to the state pension. However, you can chose to delay drawing your state pension while you’re still working and this will entitle you to a higher annual income or a lump sum payment when you do retire.

Around one third of employers have a compulsory retirement age. The rest either have no retirement age or work on a more flexible basis.

How the age regulations affect retirement 

The age regulations create a new “default retirement age” of 65 (this is the same for both men and women). This means that if your employer tries to force you to retire under the age of 65, or their own higher normal retirement age, you can claim for age discrimination and for unfair dismissal. It is likely that employers will only be able to justify forced retirement under the age of 65 in exceptional circumstances.

For employees over the age of 65, under the current law it is lawful for an employer to force them to retire, as long as they follow the correct procedure. The position on this is uncertain, as this part of the law is currently being challenged in the courts. Employees have the right to request to continue working beyond the date when the employer wants them to retire. 

What the law does not affect

The new law does not affect voluntary retirement. It is still possible for a person to choose to retire under age 65 if they agree this with their employer.  It also does not affect state pension age.  Employers are still able to set minimum and maximum age limits for membership of occupational pension schemes. There are a number of other exemptions aimed at allowing occupational pension schemes to continue to operate without significant changes.

The default retirement age only applies to employees and civil servants. Other workers, such as police officers, office holders, and partners in firms will not be covered and so forced retirement at any age will have to be justified.

 

How does the new retirement procedure work?

So from 1^st October 2006, you have the right to request to stay on in your job after your employer’s retirement date.  It’s important to remember that this is only a right to request staying on. Your employer can refuse the request, and the law does not require them to give reasons for their decision. The employer must use the proedure under the age regulations, which is as follows:

1) Your employer gives you notice of retirement

• Your employer must give you a minimum of six months’ (and a maximum of twelve months’) notice of your retirement date.
• At the same time, they must tell you that you have the right to request to continue working.  The notice must be in writing.

2) You can request to carry on working
If you make a request not to retire, your employer has a duty to consider that request. The procedure they must follow is known as the ‘duty to consider procedure’.

• Your request must be in writing, 3-6 months before the intended retirement date
• You must state that your request is made under paragraph 5 of Schedule 6 to the Employment Equality (Age) Regulations 2006.
• You must state whether you wish to continue working indefinitely, for a certain period, or until a certain date. 
• You can download a sample request letter to carry on working from the top right corner of this page. 

3) Your employer holds a meeting with you
Your employer must then hold a meeting to discuss the request with you, within a reasonable period of time. You’re entitled to be accompanied to this meeting by a colleague of your choice (this can be a union rep but only if they work for the same employer). 

4) The right to appeal
If your request is refused, or your employer agrees to continued employment for a shorter period than was requested, you have the right to an appeal meeting.

• The employer must inform you of your right to appeal when notice of the original decision is given.
• If you do request an appeal, you must do so as soon as is practical after notice of your employer’s decision, setting out the grounds of the appeal.
• Your employer must arrange a meeting within a reasonable period. Again, you have the right to be accompanied by a colleague of your choice.

5) Your employer’s final decision
As soon as is reasonably practical after the appeal meeting, your employer must give notice of their decision, giving details as in step 3 above.

 

What if you are given less than six months’ notice of your retirement, or your right to request staying on?

If you’re given less than six months’ notice of your retirement date, or of your right to request not to retire, you can claim up to eight weeks’ pay at the Employment Tribunal (this is currently limited to a maximum of £330 per week), so the maximum total compensation is £2,640 (figures correct as at March 2008 -  the compensation limits usually go up every February).

• If your employer fails to give you at least six months’ notice, they should still tell you about your right to request to continue working, as soon as possible.
• If they give you less than two weeks’ notice, the retirement will automatically be an unfair dismissal. 

 

What if retirement is not the real reason for dismissal?

The requirement for employers to give a minimum of six months’ notice of retirement is intended to prevent employers using retirement to cover up for another reason for dismissing the employee – for example, redundancy or an employee’s poor performance.

• As long as there is a minimum of six months’ notice, an Employment Tribunal will accept that retirement is the genuine reason for the dismissal and, if the ‘duty to consider procedure’ has been followed correctly, the dismissal will be fair.
• If less than six months notice is given, the tribunal will have to decide whether retirement was the real reason for the dismissal.  If the dismissal was out of the blue, with little notice, and little attempt has been made to follow the ‘duty to consider procedure’, the tribunal is less likely to accept that retirement was really the reason for the dismissal. 
• If retirement is not the real reason for dismissal, when less than 6 months’ notice has been given, it will almost certainly be an unfair dismissal, as the employer will not have followed the correct procedure for dismissing for another reason. 

A forced retirement will not be an unfair dismissal if:

• You are over 65, (or over your employer’s normal retirement age if this is higher), and
• your employer gives you between six and twelve months notice of your retirement date, and your right to request not to retire, and
• your employer follows the correct procedure if you do make a request to stay on.

A forced retirement will be an unfair dismissal if:

• You are given less than two weeks notice of your retirement date and/or your right to request staying on, or
• Your employer does not follow the “duty to consider procedure” if you make a request to stay on

A forced retirement could be an unfair dismissal if:

• You are given less than six months, but more than two weeks, notice of your retirement date and/or your right to request staying on

In these circumstances it will be for the tribunal to decide if retirement was the real reason for the dismissal.

 

Transitional arrangements

If you retired in the first six months after 1^st October 2006, there were transitional arrangements that your employer should have followed for the dismissal to be fair:

If your employer gave you notice before 1^st October 2006, of a retirement date between 1^st October and 1^st April 2007, they should have given you either the amount of notice required by your contract or four weeks notice, if your contractual notice period is more than four weeks.  

On 1^st October, or as soon as possible afterwards, your employer should have given you notice in writing of your right to request staying on.

If your employer gave you notice on or after 1^st October 2006, of a retirement date before 1^st April, they should have given you the amount of notice required under your contract (or the statutory minimum notice if this is more) in writing.  They should also have given you written notice of your right to request staying on. 

If your employer followed these procedures, the retirement will not be an unfair dismissal, but you may still have a claim for breach of contract if you were not given the notice you were entitled to under your contract.

   “I think I’ve been unfairly dismissed”  

Previously, if an employer wanted to dismiss an employee who was aged over 65 (or above the employer’s normal retirement age if different), the employee had no rights to dispute it. This was due to an upper age limit for unfair dismissal claims.

The age regulations removed this age limit, which means that employees over 65 can challenge an employer’s decision to dismiss them, as long as they meet the other eligibility requirements, such as having at least one year’s service. However, the introduction of the new provisions on retirement (see above) creates a limit to this right, ie. where the employer says the reason for dismissal is retirement and follows the correct procedure.

 

“I’ve been made redundant”

The age regulations abolish the upper age limit for statutory redundancy payments, so employees aged 65 and over are now entitled to redundancy pay calculated in the same way as younger people.

Age and length of service are still used as a factor in calculating statutory redundancy pay (and compensation for unfair dismissal).  You are entitled to:

• 1.5 weeks’ pay (currently capped at £330 per week) for each year of service in which you were aged 41 or over
• 1 week’s pay for each year you were under 41
• half a week’s pay for each year you were under 22
• covers up to a maximum 20 years service.

This means that older people continue to be paid at a higher rate than younger people, even though this appears to be discrimination on the grounds of age. The government has said it believes this difference in treatment is justified.

You may be entitled to more than the statutory minimum redundancy payment under your contract of employment.  The law sets out ways in which employers can make enhanced redundancy payments using the same age bands as used in the calculation of statutory redundancy.

It is unlawful for employers to use age as a factor when considering who to select for redundancy (unless they can justify this). Using length of service (for example, last in first out) to decide who to select could be indirect discrimination, although employers may try to justify this.

 

Free mini-guide to age discrimination at work

You can download all the information in this section in our mini-guide to age discrimination, or you can order a copy  from our freephone Information Line on 0800 00 99 66.

Find out more about the age discrimination law

 

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