Your Views on the Default Retirement Age

Now that the Government has confirmed that the default retirement age is being phased out, employers will need to decide whether to retain a specific retirement age (referred to as an employer justified retirement age) or not.

The article Managing without the Default Retirement Age has further information on the transitional arrangements, and includes a useful flowchart.

We would also be grateful if you could take a few moments to answer the following questions.   This will help us understand where employers are in relation to the abolition of default retirement age, and assist us in providing further advice on this issue.

[contact-form subject=”Default Retirement Age Questionnaire” to=”chris.terry@blackadders.co.uk”]
[contact-field label=”Name” type=”name” /]
[contact-field label=”Email” type=”email” /]
[contact-field label=”Does your business have an existing fixed retirement age?” type=”select” options=”Please select,Yes,No” /]
[contact-field label=”If yes, do you intend to retain this?” type=”select” options=”Please select,Yes,No” /]
[contact-field label=”Will it be compulsory (i.e. you will dismiss employees at that age)?” type=”select” options=”Please select,Yes,No” /]
[contact-field label=”Will it be voluntarily (i.e. employees may choose to leave at that age)?” type=”select” options=”Please select,Yes,No” /]
[contact-field label=”Do you intend to have no fixed retirement age?” type=”select” options=”Please select,Yes,No” /]
[contact-field label=”Please add any comments you would like to make about the abolition of the default retirement age” type=”textarea” /]
[/contact-form]

Thank you

Managing without the Default Retirement Age

The Government has confirmed that the Default Retirement Age (DRA) will be phased out this year.  Currently employers are able to retire staff who reach the age of 65 by giving between 6 and 12 months’ notice before they reach their 65th birthday.  Employees have a right to request to stay on.  If exercised, this is dealt with at a face to face meeting followed by the employer’s decision in writing.  There is also a right to appeal which is dealt with in the same way.  So, although employers have to tick all of the boxes, the current process provides certainty for staff planning.

Transitional Arrangements

The DRA is being phased out over a transitional period running until 1 October this year.    The last day that an employee can be compulsory retired is 30 September 2011.  This means that employers can only use the current process with employees who turn 65 on or before 30 September 2011.  The last day that an employer can give 6 months’ notice is 30 March 2011.  The Government recognises that some employers may already have given staff notice of retirement and has confirmed that any notice which specifies a retirement date after 30 September 2011 will be invalid.  This flowchart sets out the transitional arrangements.

Post 1 October 2011

Employees will still be able to retire after 1 October 2011 but employers will only be able to force employees to retire at a set age if it can be objectively justified.  If choosing to set a compulsory retirement age, employers will need to be able to show that in doing so they are responding proportionately to a legitimate aim.  Some industries will find this easier than others, such as those whose employees require high levels of physical fitness.  Whilst ACAS has published guidance on the subject (Working without the DRA, January 2011), it does not give clear guidance to employers looking to set a compulsory retirement age.

With employees having the right to continue working after they reach state pension age, employers have raised concerns that insurers will raise the costs of group risk insured benefits (such as income protection, sickness and accident insurance as well as private medical insurance).  The Government has confirmed, however, that employers may withdraw these benefits for staff who continue working past state pension age.

Implications for Employees

The removal of the DRA does not mean that employees can no longer retire, it just means that their employer cannot force them to retire once they reach a certain age.  Older employees can still voluntarily retire when they choose and draw any retirement benefits they are entitled to in line with pension scheme rules.

Implications for Employers

The removal of the DRA is an opportunity for employers to review their practices for managing employees and their performance.  Without the DRA, employers have one less fair reason to dismiss.  The potentially fair reasons they are left with include capability/ability, conduct and ‘some other substantial reason’.  Performance or conduct concerns, whether or not they may be grounds for dismissal, should be addressed by discussion within the workplace.

Older employees may be more prone to impairments.  If an impairment amounts to a disability, the employer is required to make reasonable adjustments to remove any barriers to their performance, regardless of the age of the employee concerned.  Employers must also be careful not to neglect to address performance or conduct issues with older staff because, or in the expectation that, they will be retiring soon.  Any such issues must be addressed consistently regardless of the age of the employee concerned.  Failing to address performance or conduct issues with older staff will make matters difficult and may well be discriminatory.

Sarah Winter
Senior Solicitor

Post 1 October 2011

Employees will still be able to retire after 1 October 2011 but employers will only be able to force employees to retire at a set age if it can be objectively justified.  If choosing to set a compulsory retirement age, employers will need to be able to show that in doing so they are responding proportionately to a legitimate aim.  Some industries will find this easier than others, such as those whose employees require high levels of physical fitness.  Whilst ACAS has published guidance on the subject (Working without the DRA, January 2011), it does not give clear guidance to employers looking to set a compulsory retirement age.

With employees having the right to continue working after they reach state pension age, employers have raised concerns that insurers will raise the costs of group risk insured benefits (such as income protection, sickness and accident insurance as well as private medical insurance).  The Government has confirmed, however, that employers may withdraw these benefits for staff who continue working past state pension age.

Implications for Employees

The removal of the DRA does not mean that employees can no longer retire, it just means that their employer cannot force them to retire once they reach a certain age.  Older employees can still voluntarily retire when they choose and draw any retirement benefits they are entitled to in line with pension scheme rules.

Implications for Employers

The removal of the DRA is an opportunity for employers to review their practices for managing employees and their performance.  Without the DRA, employers have one less fair reason to dismiss.  The potentially fair reasons they are left with include capability/ability, conduct and ‘some other substantial reason’.  Performance or conduct concerns, whether or not they may be grounds for dismissal, should be addressed by discussion within the workplace.

Older employees may be more prone to impairments.  If an impairment amounts to a disability, the employer is required to make reasonable adjustments to remove any barriers to their performance, regardless of the age of the employee concerned.  Employers must also be careful not to neglect to address performance or conduct issues with older staff because, or in the expectation that, they will be retiring soon.  Any such issues must be addressed consistently regardless of the age of the employee concerned.  Failing to address performance or conduct issues with older staff will make matters difficult and may well be discriminatory.

Sarah Winter

Pints by Text

The Scottish Legal Perspective:

I read with interest Peter Coulson’s well considered article re the above and would like to advise on the law in Scotland.

As Peter rightly suggests there is no actual way for persons offering alcohol for sale over the internet, by phone or other remote means  to ensure the age of the would be purchaser. This is true whether the transaction is for alcohol to be delivered to someone’s home or for vouchers to be utilised in a venue at a later date.

If the alcohol is to be delivered from a Scottish base to a Scottish domestic dwelling there are specific rules which have to be followed.

The alcohol which is the subject of the transaction has to be entered into a day book and a delivery book or invoice  by the seller. The seller has to  describe the goods e.g 12 bottles of Bonkers Shiraz and note the quantity, the price and the name and address of the person to whom it is to be delivered. There is no reason why an alternative name and address cannot be given in the day book, e.g. the local post office, shop or even a neighbour if the person ordering the wine can’t be present to accept the delivery.

Further in Scotland when alcohol has been dispatched from warehouse premises or other licensed premises within Scotland to domestic premises in Scotland it is an offence to deliver that alcohol to a person under the age of 18. The driver needs to check. I suggest that in the interests of safety the transport companies adopt Challenge 25.

If the driver believes the person offering to take delivery of the alcohol is under 25 the driver  MUST check the age of the person by asking to see ID, being one of the 3 following documents: –

  1. a current passport
  2. a current European photo driver’s licence
  3. a current Young Scot, Citizens Card or other age ID card with a PASS hologram – not matriculation cards
  4. if the  If the driver does not believe the ID is accurate he must refuse to deliver the alcohol and should keep a note of the reason for his decision e.g. thought person under 18
  5. NO OTHER ID IS ACCEPTABLE – IF IN DOUBT DO NOT DELIVER TO DOMESTIC PREMISES

Although not against the law best practice would suggest that the alcohol would have to be delivered to a person rather than left at random on the site. How else would the seller know the goods had been delivered if no signature was obtained.

As for vouchers being purchased to enable the build up of credit for a night out. I do not see anything wrong with this. Obviously alcohol could not be sold to under 18s whether or not they had paid in advance. If persons purporting to be 18 came to the bar of a pub or club or other premises and asked to redeem the vouchers for alcohol staff would require to undertake all the normal precautions to ascertain their age. Challenge 25 will be compulsory in Scotland as from 1 October 2011 unless we have a legislative change. Anyone offering vouchers would be advised to put a note on their web site that vouchers will not be redeemed for alcohol and monies may be lost unless voucher holders can prove they are over 18 at point of delivery. The point of sale is irrelevant in Scotland for these purposes.

Following this fairly simple advice should prevent problems for the licensee in Scotland and if adopted south of the border for our English and Welsh cousins.

Janet Hood
Consultant
Accredited Liquor Licensing Specialist

The Royal Wedding: Don’t bank on a holiday

All across the country on 23 November 2010 Royalists and holiday-lovers rejoiced at the Cabinet’s announcement that the occasion of Prince William and Kate Middleton’s marriage on 29 April 2011 would be marked with a public holiday.

Employers and financiers alike will be asking: do we have to? The answer relies on an understanding of how public holidays work within the law. There are a number of common misconceptions which muddy the waters, particularly the confusion of what a public holiday actually is.

What is a bank holiday?

A bank holiday is one stipulated by legislation. The Banking and Financial Dealings Act 1971 governs bank holidays with the UK, and the Scotland Act 1998 assigns to the Scottish Ministers the responsibility for setting bank holidays. At present, there are eight permanent bank holidays.

What is a public holiday?

Public holidays are controlled by individual local authorities. Generally, these are set in cooperation with local businesses and are aimed at preserving local history and traditions, thus this year Dundee marks Victoria Day on 30th May, Arbroath marks St Tammas day on 26th July, and the rest of the world keeps on turning. These designated public holidays are merely recommendations: employers are under no obligation to close their businesses on these days.

Am I entitled to a holiday?

No employee is entitled to take a holiday on a bank or public holiday as a matter of course. Rather, an employee must look to their contract of employment to establish what their position is. An employee entitled to 20 days plus bank holidays would quite rightly expect the day off, as the Royal Wedding is indeed a bank holiday.

More commonly, a contract might entitle an employee to e.g. 24 days holiday as well as six paid bank / public holidays. Such contracts usually go on to list which six days will be given as holiday e.g. Christmas Day, New Years Day. An employee of that firm therefore receives 30 days of paid annual leave. As such, the employer would be compliant with the Working Time Regulations’ prescribed minimum of 28 days holiday and the employee has no special entitlement to take the Royal Wedding off as it is not one of the public holidays listed in the contract.

An employee in such a position would simply apply for a day’s holiday in the usual way, and an employer will then operate their usual standards in deciding whether or not to grant the request. Employers must adopt a consistent approach to bank /public holidays. If employees have routinely been granted leave on such days in the past it may be that there is an established ‘custom and practice’ within the workplace. This could potentially allow employees to claim holiday for the Royal Wedding.

The Practical Aspect

There is nothing intrinsically special about the Royal Wedding from an employment law point of view. Most employees are unlikely to be entitled to the day off, and will have to apply in the usual fashion if they wish to take the holiday.

If there is dubiety about an employee’s contractual entitlement, it may be that employers will choose to grant requests as a gesture of good will in order to maintain good employee relations. If this is done, employers should move quickly to tighten up their statement of terms and conditions in order to prevent a ‘custom and practice’ forming whereby employees expect to have an automatic entitlement to take future bank and public holidays off.

Wise employers should look to clarify any such grey areas in a timely fashion, as any problems experienced with the Royal Wedding will likely resurface next year, when a further public holiday takes place on 5th of June 2012 to mark the Queen’s Diamond Jubilee.

Stewart Dunbar
Trainee Solicitor
Employment Law