March 2006

New Rights for Older Workers
The New European Equality (Age) Regulations 2006

In Brief: New Retirement Regulations From 1 October 2006 all Employers will be required to:

• Inform Employees in writing at least six months in advance of the date on which the Employer intends for them to retire; and

• Give due consideration to an Employee's request to continue work beyond the suggested retirement date

Crucially, Employers and Employees should be aware that the 65 year age limit on claims relating to Unfair Dismissal and Redundancy Payments will be removed.

In Brief: Other Rights under the new Regulations

Employers and Employees should also be aware that the new Regulations will require that there is no element of discrimination of any kind in the way that Employers advertise vacant positions or offer vocational training to existing Employees.

The European Equality (Age) Regulations 2006 will come into force on 1 October 2006. From this date all Employers will be expected to meet the requirements outlined in these new regulations in order to avoid the prospect of potential Unfair Dismissal and Discrimination claims.

The Regulations impose many new requirements in connection with discrimination and the conduct of business. However, we have focused below on the general requirements for Employers in connection with retirement policy. Those requiring further information should contact Humaira Bajwa.

Fair Retirement of Employees

Employers may not have to change their retirement policy but there are going to be strict new requirements on how this policy is applied. The new regulations state that where an Employee is to retire, the question of whether the dismissal is fair or unfair shall be determined with reference to the new procedural requirements. If an Employee is retired, but feels that the dismissal is in fact due for other reasons, they will be able to make a claim for Unfair Dismissal no matter what their age at the time. It will be for the Employer to show that the retirement was not a sham.

The Retirement Age

Under the new Regulations an Employer will be able to set the retirement age for their organisation below 65 if they can show that this is a "proportionate means of reaching a legitimate aim", without giving rise to claims for Unfair Dismissal. Alternatively, Employers will be able to retire Employees above the age of 65 if based on the same reasoning.

The New Retirement Procedure

From 1 October 2006 all Employers that intend to dismiss an Employee by retirement will be required to adhere to the following procedure, even where the retirement results from the end of the Employees fixed-term contract:

1) Initially, the Employer must give to the Employee at least 6 but not more than 12 months notice in writing of the due retirement date

2) This notice must inform the Employee of their new right to request to work beyond the end of this period together with the fact that the Employer now has a duty to consider such requests

3) If the Employer fails to inform the Employee of these new rights then the dismissal will be automatically unfair

4) Provided an Employee has received the requisite notice, if they then wish to take advantage of their new rights the request for consideration must be made at least six weeks before the due retirement date

5) If the Employee makes such a request then the Employer will be required to show due consideration to this

6) As a minimum, the Employer will be required to hold a meeting to discuss the request with the Employee, following which the Employer must then inform the Employee of its decision within 2 weeks

7) The Employees request to continue work need only be considered so far as it relates to their working terms before the due retirement date. There is no obligation on either party to consider changes to the existing working arrangement. However, such changes may prove a practical solution to the new requirements and it is likely that parties will be encouraged to give consideration to all their options

8) Finally, the Employee will then have a further two weeks following receipt of the decision in which to lodge an Appeal. This part of the procedure will be unaffected by the fact that it falls after the due retirement date.

It is important to note that Employers choosing to retire Employees at the age of 65 will not be guilty of Unfair Dismissal so long as they can show that retirement is the genuine reason for the Dismissal and that they have adhered to the procedure outlined above.

No limit Retirement Rollover

Under the new Regulations an Employee has the right to make a request every time that they are notified of a new retirement date, and there is no limit on the amount of extensions an Employee may be granted.

Once an Employee has been granted an extension they will enjoy the same employment rights as any other Employee.

For more information please contact Humaira Bajwa on 01494 442661.