Stuart Markless answers your questions.
Q: We have retained a long-term employee on annual contracts since he reached our retiring age of 60 four years ago. I would prefer not to renew his contract when it runs out – his performance is slipping and I need to reduce overheads. What should I do?
SM: Since October 2006 the law has stated that:
- Forcibly retiring people before they reach 65 is potentially unlawful age discrimination
- It is lawful to make people retire when they reach 65 provided a set procedure is followed
In this case, it is questionable whether it is appropriate to be treating someone of 62 differently to his colleagues by giving him renewable fixed contracts. This, in itself, is potentially discriminatory. Therefore, I would advise against dismissal due to the end of his fixed-term contract. If he worked for you prior to this and completed more than four years’ service he is, to all intents and purposes, a permanent employee and you may find yourself facing a claim of unfair dismissal and age discrimination.
Q: What about the performance issues?
SM: If you believe his performance may be declining, follow a performance review process to find out why his performance is being questioned:
- Investigate thoroughly to ensure he is not being affected by negative age-related stereotypes
- Look into whether other factors are responsible for his poor performance
- Examine whether a lack of resources or training, or poor management could be responsible for the problems
When the review is complete:
- Give the employee goals to reach within a reasonable period
- Provide training, better management guidance or other resources where requested
- If there is no improvement in his performance, the disciplinary procedures may be invoked including dismissal where warranted
Q: I do need to reduce my wages bill, can I just make him redundant?
SM: There are no set rules about redundancy selection criteria, provided they can be objectively measured and are not discriminatory. This means you cannot select based on age. If you need to reduce overall staffing levels:
- Use objective criteria in choosing candidates from the appropriate pool of employees
- Do not start out with the intention of making one individual redundant on the basis of performance or age
- Select candidates from the whole organisation or from a particular department or group of staff
For further details of the correct redundancy process visit ACAS.
See also: our Age Discrimination page.
This article was published in The Argus in September 2008
The information in this article is provided as general guidance only. The law in this area is regularly subject to change, challenge and update. You should always check the up-to-date position and if appropriate seek further specialist advice.
