Businesses must plan now for retirement changes says Morton Fraser
Posted: Tuesday 8 February 2011
We have set up a special task force to help businesses cope with the radical changes to retirement law being introduced later this year.
Under government plans the compulsory retirement age of 65 in the UK will be scrapped from October 1. After that employers will no longer be able to retire staff just because they have reached that age.
The changes could have far reaching implications for companies of all sizes and across all sectors said the firm's employment law partner, Lindsey Cartwright who's heading up the new initiative.
“We're finding many employers are unprepared and don't quite realise just what impact these changes could have on their existing employment processes and procedures and time is running out. It's vital that they plan ahead, think about the impact of the change on their workforce, think about their business requirements and decide on a strategy to manage that.”
The three strong team in the task force can offer businesses a comprehensive range of employment law expertise to ensure a smooth transition. This will range from inputting into strategy right down to implementing new procedures or changing existing ones.
Currently it is entirely at the discretion of the employer whether or not to terminate employment when a member of staff reaches 65.
“The new rules mean no forced retirement notices can be issued after April 6 - six months before the October changeover. But an employer that issues a retirement notification before this date will be able to retire the employee if their retirement date is before October 1,” said Lindsey. “There are potentially hundreds of firms with employees in this position who probably don't realise exactly what these new rules mean for them.”
From October any compulsory retirement age will be illegal unless it can be justified on grounds of business need.
“Some companies will still be able to retire employees at a certain age, but they need to have identified a real need to do so and made sure that there are no better ways of achieving that aim. There is currently no cap on the amount that tribunals can award for age discrimination, so a failure to fully understand the new rules could be expensive,” she added.
For more information, please contact Lindsey Cartwright
Photo By MiiiSH
