Dental Tribune United Kingdom Edition

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At present, employers must follow a fairly strict retirement proc- ess which penalises them for failing to comply, but which does allow them to choose to retire an employee without the employee having any say in the matter. With effect from 6 April 2011, this process will begin to fall away and, from 1 October 2011, it will be age discrimina- tion to dismiss someone by rea- son of retirement. History of Retirement Retirement is a relatively recent historical phenomenon. The concept of retirement on a state pension was invented by Chancellor Otto von Bis- marck of Germany in the late 1800s as a response to the ris- ing tide of socialism which was sweeping through Germany. In an attempt to promote his gov- ernment as protecting the in- terests of the working class, Bismarck announced that every German person over the age of 65 would be entitled to receive a state pension. The arbitrary state pension age of 65 (which in those days cost little as few people lived to reach the age of 65) then found its way into national law in many de- veloped countries. 125 years on, the notion of employees reaching the age of 65, retiring and receiving a reasonable income from their combined state and privately funded pensions has become more difficult to uphold. The abolition of the default retire- ment age therefore stands both as a liberal gesture of social equality, as well as a pragmat- ic response to the difficulties posed by aging population and declining returns on invest- ment for pension funds. Changes to Retirement The key changes to the law on retirement are as follows: • Notices of intended retirement date cannot be issued from 6 April 2011 onwards • The default retirement age will be abolished with effect from 1 October 2011 What does this mean for employers Notices of intended retirement can now only be issued for employees who are 65 or over on or before 30 September 2011 and the notice of intended re- tirement date for that employee must be issued no later than 5 April 2011. Alternatives to the default retirement age 1 Speak to the employee ‘off the record’: Whilst this option is tempting, trying to speak with an employee ‘off the record’ is fraught with difficul- ty. In brief, simply saying “this conversation is ‘off the record’, or ‘without prejudice’, does not mean that the employee cannot use the conversation against the employer. Therefore an em- ployee could argue that these discussions are an attempt to force them out on the grounds of their age, and consequently sue for age discrimination. 2 Speak to the employee ‘on the record’: The best time to do this is during annual ap- praisals, or at regular meet- ings. Indeed, it may make sense for employers to dis- cuss future plans with all em- ployees at appraisal time, as this will give the employer a better idea of who is looking for advancement, who is hap- py within their role, and who is considering retiring, and plan accordingly. 3Keep a close eye on per- formance: Many employers are concerned that the change in law means that they will be stuck with staff members who cannot perform and who can- not be retired. This is not the case. In fact, under the new law, employers will have to keep a closer eye on who is per- forming well, and manage all employees’ performance equal- ly, regardless of age or length of service. 4Set a corporate ‘normal retiring age’: Contrary to pop- ular belief, employers will still be able to set a ‘normal retiring age’ for employees. Although this will be age discrimination, this will be justifiable if the decision can be shown to be a proportionate means of achiev- ing a legitimate aim. 5 Set out Compromise Agreement: One possible solu- tion is to issue a notice of re- tirement to the employee with an intended date before Octo- ber 2011, then open ‘without prejudice’ discussions with the employee on the basis that you will let them stay past that date, if they sign a Com- promise Agreement. You can’t retire me! David Regan discusses the implications for dentists as the retirement age is abolished page 18DTà ‘The notion of employees reach- ing the age of 65, retiring and receiv- ing a reasonable income from their combined state and privately funded pensions has be- come more difficult to uphold Retaining the services of longstanding employees could be of benitfit to junior staff