April 2011 saw the phasing out of the default retirement age with the Employment Equality (Repeal of Retirement Age provisions) Regulations 2011.
Because employers are no longer able to take the age of 65 as a safe age at which to retire an employee careful consideration must now be given to the nature of the changing work force and how best to manage it for the benefit of the employee and ultimately for the benefit and profitability of the business. Employers can no longer bury their heads in the sand but must now seriously think outside the box and revisit their policies and procedures not only in terms of retirement but also in responding to the change in “work- life” balance.
A certain amount of flexible working has always occurred in the form of shift working and fixed term working but more to suit the employer’s needs as opposed to accommodating the employee’s needs. Factors such as the instances of both parents working, the decision to have families much later in life, and the time, cost and stress of commuting generally all play an increasing role in the change to the working picture. The traditional 9 to 5 day is no longer economically viable.
Flexible working arrangements include amongst others: career breaks, compressed hours, flexitime, homeworking, job sharing, staggered hours, term time working and sabbaticals. Employers are now finding that flexible working gives them better staff retention and lower work place overheads and with the “65 safeguard” gone, consideration of these working arrangements is all the more appealing.
Provided the employer revisits how it adapts to the changing workforce, retaining experienced staff encourages the contribution people can make in their 50s and 60s and help the business become much more competitive.
It’s not all good news however. Whilst the government breathes a sigh of relief because an increased number of older workers are paying tax and there is a corresponding reduction in the benefits paid out, employers are faced with the balancing act of taking on new staff and retaining experienced staff.
Therefore in terms of workplace planning, when is the best time to have that discussion with your employee as to what their future plans are and when they might leave the business? The fear of an age discrimination or unfair dismissal case might lead to the avoidance of the subject altogether or worse a “clumsy discussion” on a “without prejudice basis” which leads to a claim for discrimination and the loss of the “without prejudice” protection because a) the discussion took place before there was a dispute and b) because of the discriminatory comments and the rule of unambiguous impropriety.
How does the employer deal with career progression and the retention of staff who see there is no way forward in terms of advancing their career? The employer therefore faces not only the prospect of an unhappy older employee but an unhappy younger employee.
How ugly can it get when under performance and capability issues are involved? For those employees who have capability issues whether it is related to health or ability, employers will no longer be able to avoid invoking their capability procedures by relying on the 65 safeguard. A misplaced belief in doing the right thing in protecting an employee’s sensibilities by avoiding the issue altogether might not only cause problems in terms of determining the fairness of a later dismissal but, raise disability discrimination issues in failing to consider reasonable adjustments.
Employers will need to consider, in addition to flexible working, training on how to approach the subject of retirement; addressing career progression, forward planning and turnover of staff; redeployment of staff and performance management. Thinking outside the box may also require employers putting their hands in their pocket to financially incentivise retirement and all against a back drop of changing workplace pensions.
A longer living workforce and a change in the economic climate have to be embraced by the employer. The solutions are there but how flexible is the employer prepared to be to stay competitive.