• The age for claiming state pensions will not change
• Discriminating on the basis of age in recruitment, promotion and training will be outlawed
• Retirement ages below 65 (except if objectively justified) will be outlawed. The upper age limit for unfair dismissal and redundancy rights will be removed
• Employers will have a duty to consider requests to continue working beyond retirement
• Employers will be required to give written notification to employees at least six months in advance of their intended retirement date, in order to allow people to plan for their retirement

Employers should be thinking now, about the following in relation to the new legislation:

• The retirement process: following a set formal process to manage retirement will become important
• How benefits arrangements will work in the future, the principle will be that all employees will have the same access to benefits regardless of age even though the costs of some of these benefits vary by age. (Age related elements of occupational pension schemes will be exempt though, as will some length of service benefits and the age related national minimum wage bands)
• Redundancy compensation: compensation currently varies according to age. Age legislation implies this has to change so that the age of a redundant employee has no bearing on the redundancy payment they receive. However, it is yet to be decided how this will work in practice i.e. if the higher rate, lower rate or somewhere in the middle will prevail as the future rate for redundancy compensation.

This is a major piece of new employment law and it will impact all employers. It will affect recruitment, manpower planning, employee development and pay & benefits practices.

For more advice and guidance or to arrange a review of how you are likely to fare when the new legislation comes into effect - please contact Campbell on 01494 451 681 or email campbell@hradvantage.co.uk

July/August 2005