Freda Line, Extending Working Lives Engagement Manager, Capita Consulting explains the new regulations covering older workers that need to place in for October 1st
Do you know what you now need to have in place to ensure you comply with the new regulations following the removal of the Default Retirement Age (DRA)? If not, you have only a few weeks to make sure you are ready.
Since 6 April 2011 employers have not been allowed to issue new notifications of retirement using the DRA procedure. Where notifications were issued before that date, employers will be able to continue the retirement process as long as the employee is aged 65 or more before 1 October 2011.
But from 1 October you can no longer compulsorily retire employees (at 65 or older) unless you can objectively justify the use of fixed retirement ages in their particular circumstances. Don’t forget, this can be challenged at tribunal on an individual basis.
The construction sector has a good reputation for employing older workers – but many employers have expressed concern at these new rules. You really don’t need to worry. All the evidence is that workers are likely to continue to want to retire as soon as they can – we all know how tiring building can be – so you are unlikely to find many who will want to stay on beyond 65. But there will be some who may have to because of financial need or other personal circumstances. One way of meeting both your needs and that of your older workers is the idea of flexible retirement. This could be a win-win for both of you – you get to keep skills and knowledge, younger workers get an opportunity to learn from an ‘old hand’ and your employee has a chance to wind down. There are though some risks in this – since employers need to be careful not to discriminate against/ older workers by offering flexible retirement – sounds perverse but they do need to be aware that this should be part of a conversation on ‘plans for the future’ that takes place with all employees.
Here are 10 things you need to do to ensure you are ready for 1 October:
1. Make sure managers and workers know that the business no longer has a default retirement age. Workers will be able to carry on working as long as they wish
2. Make sure everyone realises that all workers need to be treated the same whatever their age in terms of performance, job opportunities, training and dismissal
3. Communicate with existing employees – so that all workers are aware of the changes and how they will be personally affected
4. Ensure you have regular (performance) reviews with all employees – whatever their age – this will give you a chance to learn what their plans and expectations are and will avoid charges of discrimination when you discuss ideas such as flexible retirement. It will also help you to nip problems in the bud especially when having to deal with capability or health issues
5. Ensure that anyone responsible for ‘hiring or firing’ is fully aware of the new laws
- Job adverts and applications cannot exclude people aged 65 and over (unless there is specific objective justification or there is a genuine occupational requirement)
- Retirement is no longer a fair reason for dismissal
- Employees no longer need to ask to work beyond the age of 65
6. Review and amend your employment practices and any written policies you may have, such as employment contracts, statements, handbooks or offer letters, including:
- Absence and ill-health retirement procedures should not include age as a consideration
- Equal opportunity and diversity policies / statements are likely to need changing
7. Retirement practices – review what you currently do and cease any forced retirements or references to normal / contractual retirement age. Employees will be able to choose when to retire and the procedures should be the same as for other workers who resign
8. If you offer insured benefits (private medical etc.) – it will still be possible for employers to cease the provision of insured benefits to employees aged 65, or the state pension age, and above
9. If you offer a pension scheme ensure it is compliant with the new legislation. Schemes can still have a normal pension age for the payment of pension but they must not assume workers will retire at that age or any other specific age. Many employer schemes already support flexible retirement.
10. Going forward ensure that up-skilling and training opportunities are offered and available to workers of all ages (unless there is a specific objective justification) otherwise you may be at risk of a claim of age discrimination.
For further information contact your trade body who should be able to provide you with advice. There is further support available from ACAS at www.acas.org.uk or DWP at www.businesslink.gov.uk/agepositive
