Question
Do employers need to have told employees who have been given notice of retirement what to include in their letter requesting to continue working?
Answer
Potentially yes and in detail. We've looked at the recent case of Bailey v R&R Plant (Peterborough) and it seems the judgment could have a big impact on those organisations still in the process of retiring employees under the transitional Default Retirement Age provisions.
The EAT judgment states that an employer must have informed an employee that any written request to continue working must be in writing and must state that it is made under paragraph 5 of Schedule 6 to the Employment Equality Age Regulations 2006. Any failure to have done so could result in purported retirement dismissals becoming costly claims for unfair dismissal and age discrimination.
The nub of the R&R case was that Mr Bailey was prevented by R&R from pursuing a request to continue working, as his request letter did not contain the precise statutory wording. The EAT therefore tracked back and found that R&R had been under an obligation to tell Mr Bailey precisely what he had to say in his request letter in the first place, which R&R (in common with most employers) did not do. This means that most ongoing retirement processes are probably now in doubt.
Many commentators have said that they hope R&R will be appealed and soon. However, as the R&R case was about £5000 and may well not go further, it is uncertain how long the effects of the EAT judgment in R&R will prevail. In the longer run, it seems justice would be served by the appellate Courts finding that where a 'right to request' meeting etc. has actually gone ahead (rather than being blocked, as in R&R), any failure by the employer to notify an employee about paragraph 5 of Schedule 6 is irrelevant; but this cannot be guaranteed.
The problem is that the R&R judgment introduces a lot of uncertainty based on a very technical point. So, while it might be tempting for employers to forge ahead and see what happens, the first they might hear about it could be on the day they receive an ET1 claim form. The potential cost of getting it wrong is a large award of compensation for loss of future earnings, plus a basic award and potentially injury to feelings for unjustified retirement dismissal... unless (contrary to other case law in this area) a technically faulty attempt to follow the statutory retirement procedure could be held to be both fair and also justify what might otherwise be unlawful age discrimination.
If you are facing this dilemma, we suggest that you don't delay and obtain specialist legal advice. If you are thinking of starting a retirement procedure now, then stop and take advice, as there have been significant changes to age discrimination legislation which means that unjustified retirement is now unlawful.
If you would like to know more, please contact Peter Jones, in confidence and without obligation by emailing Peter or by calling him on 08450 990045, or speak to your usual contact in the Employment Team.
This answer is provided for information only and does not constitute legal advice. Professional legal advice should be obtained before taking or refraining from taking any action as a result of the contents of this article.
9 June 2011
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