Retirement Procedure
by Liam
Under the Statutory Retirement Procedure that became mandatory in its transitional form on 1 October 2006 and then in permanent form on 1 April 2007, all employers must follow the Statutory Retirement Procedure before dismissing an employee by reason of retirement (which is now a sixth potentially fair reason for dismissal for unfair dismissal purposes).
The procedure requires employers to write to employees between 6 and 12 months before they are due to retire and inform them that they are due to retire (and state the date that retirement is due) and that they have the right to request to work on beyond retirement age. If the request is refused following the appropriate meeting and appeal meeting, the employee simply retires.
However, if the employee is granted an “extension” to their employment, what must be done in terms of the retirement procedure when the end of the “extension” is approaching?
The answer depends on the length of the extension. If the extension is for 6 months or fewer, there is no need to send another notice of retirement letter to the employee.
If the extension is for more than 6 months, then the employee must be sent another notice of retirement letter between 6 and 12 months before the new retirement date. If this is not done, the retirement procedure has not been followed and employers will either have to delay the employee’s retirement or risk an unfair dismissal claim.
For extensions between 6 and 12 months beyond the first retirement date (normally when the employee reaches the age of 65) the easiest way to deal with the requirement to write to employees 6 - 12 months before the new date is to include the new notice of retirement information in the letter confirming the extension of the first retirement date.
This means one letter will cover the following:
- That an extension has been granted;
- What the new retirement date is;
- That the employee has the right to make a further request to work beyond this date.
The employer can then wait to receive a further request, and if it does not, simply retire the employee safe in the knowledge that it has met its obligations under the retirement procedure.
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What if an employer fails to give 6 months notice. Does the employee have to still leave on his 65th birthday?
Jo Baldwin said at July 24th, 2008 at 5:33 pm
I am approaching (within 6 months) of my extended ritement date and have been sent the letter asking if I wish ti work on past the date. I will request yes and expect to be kept on. However the department that I work for and the work force within it will be made redundant during the expected period. My question is am I entitled to the same redundancy terms or can my ompany simply retire me?
Malcolm Beagle said at August 11th, 2008 at 8:39 am
As long as employers comply with all the requirements of the statutory retirement procedure and employment is not extended after a request to work beyond normal retirment age, retirement will be the reason for dismissal, not redundancy. This means the employee would not be entitled to redundancy pay.
If the employer grants the request to work beyond retirement and dismisses the employee by reason of redundnacy before the new retirement date, then redundnacy will be the reason for dismissal and redundancy pay will be due.
Liam said at August 11th, 2008 at 11:26 am
Jo,
If the employer does not give 6 months notice the dismissal could still be by reason of retirement and therefore fair, but it is not conclusively fair as it would have been if the retirement procedure had been followed in full.
I would need to know more details to be able to say whether the dismissal is fair or not. In short, the longer before retirment the employer follows the retirement procedure the better the chances of the dismissal being fair. The dismissal is also more likely to be fair if the employer follows the rest of the retirment procedure in full, albeit that he started it later than he should have.
Liam said at October 16th, 2008 at 7:59 am