Retirement Delays – Will they cause you a headache?

A recent survey by YouGov has indicated that a significant number of older workers have changed their retirement plans as a result of the Covid-19 pandemic. They found that 13% of the 2,114 over 55s polled, had said that they were delaying their retirement plans. So where does this leave employers?

Since 2011 there has not been a compulsory retirement age (except for a few professions where there are objective justifications in place). This has meant that people are no longer retired, they simply choose to resign from employment when they felt that they no longer wished to continue.

Since then, it has been difficult for employers to have discussions solely with older employees to find out their plans without falling foul of potential age discrimination legislation. The advice has been to have such discussions with all members of staff about long-term plans as part of the annual appraisal process. However, if as part of this process you have employees who have indicated their timescales for retirement – or even given you a specific date, you should not take any action to replace them until you have a written letter of resignation from them.

I have come across a couple of examples where the employer had made plans and advertised for replacements based on such conversations, but without written notification this proved to be extremely risky. In both cases the employees sought compensation for redundancy payments and cited potential unfair constructive dismissal. They were long-serving employees and so they retired courtesy of their employer and a big settlement payment!

So, if you want to avoid falling into the same trap and have employees who have given you such an informal indication, beware that they may now have changed their minds. This may be because of the financial impact that Covid-19 has had on their pension pots, or simply that their personal circumstances have changed. Play it safe - make sure that you get a written letter of resignation before advertising or making other arrangements for a replacement.
Posted on 10 Dec 2020
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