Changes To Retirement Law

Changes To Retirement Law

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Current legislation places the retirement age at 65, as a default. Age discrimination or unfair dismissal claims will therefore stand in no stead as employers are legally allowed to retire their employees once they get to this age, providing the statuary retirement procedure has been properly followed.

If an employer wishes to retire an employee who is less than 65, they will need to show that this is objectively justified. The employer must give the employee notification of the intended retirement date at least 6 months and no more than 12 months before the due date. However the employee can request not to be retired, which should be made between 3 and 6 months before the intended retirement date. Then the employer must convene a meeting with the employee to consider the request and the employer should notify the employee in writing of the outcome. If the employee wishes they then have a right of appeal.

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If the above procedure is followed correctly then the employee will not have the right to argue unfair dismissal, though all requests are considered separately. A great importance is then placed on the date of notification of the retirement date, meaning that if the employer does not grant suitable notice, 2 months’ pay could be awarded to the wronged employee.

Plans to remove entirely the set retirement age were put into action by the government this year. They propose to scrap the unfair law by October 2011, and have created a consultation process to discuss the details. The new plans will prevent further forced retirement cases from progressing after 6 April 2011.

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Once the proposals are finalised, employers will need to identify employees turning 65 before 1 October 2011 and remember to issue notices of intended retirement before 6 April 2011. Employers should start to consider whether they will continue to use a retirement age (and in particular how they would justify this) after October 2011. They may also need to seek advice on possible changes to benefit schemes where the cost may be substantially increased by including older employees.

If you need advice on making the next steps with your Will call local Merseyside Solicitors, Hattons Law for advice.

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