We have two long-serving employees who are both in their 60s – one is 67 and the other is 65 in the Summer. The business is looking to cut its overheads and these two are not really performing as well as others, and they are paid better than our younger staff. Can we retire them?
It is still possible to retire employees if you have a contractual retirement age which, if you do, needs to be objectively justified. That is difficult for employers, hence why few employers have one these days.
Assuming there is no retirement age, then your two elderly employees must be treated like everyone else. First question is whether you know whether they have plans to retire voluntarily. Employers are perfectly entitled to ask their staff about their medium-term plans, provided you ask all staff the same question. These two employees may have told you, or their colleagues, about whether and when they plan to retire.
If you have been given no indication that they are planning to retire, then your options are:
- Redundancy – this is always an option, although make sure you go through a fair selection process. You may need to pool and score them, if there are others doing similar roles. They need to be considered for alternative employment, if you have vacancies.
- Manage their under-performance – can be commercially unattractive due to it being time consuming and extending their period of earning.
- Negotiate an exit – having a “protected conversation” is often commercially attractive, although if you just single these two out for such a conversation, it is possible those conversations could become disclosable if they subsequently bring an age discrimination claim.
As more employees work until later in life, we see these issues coming up ever more. In our experience, employers are getting much better at appreciating the benefits older workers bring, and at addressing the retirement question as part of their overall workforce planning.
If you are expeiencing a similar concern in your business and require further advice on this topic please contact Greg Burgess by email at Greg.Burgess@dmhstallard.com or by phone on 01293 558 547.