Employers’ Retirement Notices Invalid Due to Technicality

The Court of Appeal has confirmed that retirement notices issued by employers under the (now revoked) statutory retirement procedures may have been invalid due to a technicality.

Up until 5 April 2011, employers could retire employees at the default retirement age of 65 if they complied with the statutory retirement procedures.   One of the requirements, under Paragraph 2 of Schedule 6 to the Age Regulations 2006, was that the employer inform the employee in writing of the right to request not to retire.   Employees who wished to request not to retire had to put that request in writing and state that the request was made under Paragraph 5 of Schedule 6 to the Regulations. 

In R & R Plant (Peterborough) Ltd v Bailey, the employer issued Mr Bailey with a retirement notice in writing and informed him in that notice that he had the right to request not to retire.  Mr Bailey wrote to his employer exercising his right to request not to retire but did not state in that letter that his request was made under Paragraph 5 of Schedule 6 to the Regulations.   The employer refused his request not to retire and he claimed unfair dismissal and age discrimination.

The employment tribunal held that the employer had complied with the statutory requirements.  Mr Bailey, on the other hand, had not as he did not state that his request not to retire was made under Paragraph 5 of Schedule 6 of the Regulations.  On this basis, the employment tribunal decided that he been lawfully retired at the default retirement age and his claims failed. 

The EAT, and now the Court of Appeal, disagreed.   The relevant statutory provision, when read with interpretation provisions, required the employer to inform the employee in writing that he had a right to request not to retire under Paragraph 5 of Schedule 6 of the Regulations.  Failure to do so meant that the employer had not followed the statutory retirement procedures in full and retirement was not therefore automatically deemed to be the reason for dismissal.  Nevertheless the reason for dismissal in this case was retirement.  This meant that the dismissal could not amount to age discrimination but was unfair.

Whilst the impact of this case is limited due to the abolition of the default retirement age and the statutory retirement procedures, some employers may already have received employment tribunal claims based on defective retirement notices and these claims are now likely to succeed.  Failure to follow the statutory retirement procedures correctly can result in an award of up to 8 weeks’ pay in addition to any compensation for unfair dismissal – although it is likely that as in Bailey compensation will be relatively small.