Hampshire Fire and Rescue Authority

Human Resources Committee Item 10

1 December 2006

Update on the Retirement Procedure under the new Age Regulations 2006

Report of the Chief Officer

Contact: Shella Smith, Employee Relations Manager, Tel: 023 8064 4000 ext 5425

E-mail: shella.smith@hantsfire.gov.uk

1

Summary

1.1

This report summarises the new Employment Equality (Age) Regulations 2006, which came into force on 1 October 2006, and in particular the new obligations in respect of retirement. The Group is asked to consider the position that should be adopted by the Service in respect `normal retirement age' in order that the Human Resources Department can implement an appropriate procedure.

2

Recommendations

2.1

That the Service adopts a `normal retirement age' of 65 for all employees.

2.2

That the Service does not agree to requests from employees for their service to be extended beyond the age of 65, except where there is a case to support a critical business need where particular skills or knowledge cannot be obtained from the existing workforce.

3

Introduction and Background

3.1

The new Age Regulations will potentially have an impact on every area of the employment relationship, including recruitment, terms and conditions and dismissal. These areas are currently being considered by the Human Resources team to ensure that the Service's policies and procedures are compliant with the Regulations.

3.2

In relation to retirement, the Regulations introduce a whole new procedure for retirements which are due on or after 1 October 2006. From this date, an employee dismissed at or above age 65, where the reason for dismissal is retirement, will not be able to claim that they have been discriminated against on the grounds of age. If an employee brings a claim to an employment tribunal, the court will determine whether or not the dismissal was for retirement or for some other reason (e.g. conduct or capability). If retirement is the sole reason then the dismissal will be fair, provided that the proper procedures have been followed.

3.3

The Government has set a national default retirement age of 65 which it will review in 2011. The Government argues that for reasons of social and workforce planning, retirement at age 65 is automatically justified, i.e. the Service would not be required to have a comprehensive policy of justification if it agreed a normal retirement age of 65.

3.4

A normal retirement age below age 65 must be `objectively justified' under the Regulations. This means that both direct and indirect age discrimination will be justified if it pursues a legitimate aim and it is a proportionate (i.e. appropriate and necessary) means of achieving that aim. The aim must relate to a real need for the employer, who would also be required to provide evidence of this.

4

Implications for the Pension Schemes

4.1

The Firefighters' Pension Scheme (FPS) was amended in November 2005 to remove the compulsory retirement age of 55. Employees are now entitled to automatically continue working beyond the age of 55, provided they are fit to do so. HFRS has in place a system of conducting three yearly health screening for operational employees, increasing to two yearly after the age of 52, to ensure that they are fit for role. In light of this change to the FPS, there is no legal basis for retirements at age 55 for operational employees to continue.

4.2

The `normal retirement age' for employees in the Local Government Pension Scheme is already age 65.

5

Requests to extend service beyond normal retirement age

5.1

Under the new Regulations, employees have a right to request to continue working beyond the normal retirement age of 65.

5.2

The Service has sought legal advice on the new Regulations from Warner Goodman Commercial solicitors who suggest that the Service implements a retirement policy which sets out the circumstances where retirement will be pursued and that if the criteria are met, retirement at age 65 should be pursued. As a public authority, the Service could be challenged as acting arbitrarily if some employees are selectively retained beyond their retirement age, whilst others are retired, without there being some proper criteria in place.

5.3

An Equality Impact Assessment has been completed which indicates that a general policy agreeing to all requests to extend service beyond age 65 would be a barrier to the Service in its aim to increase the diversity of the workforce, and in particular would have an adverse impact on women and people from a minority ethnic background. It is essential that the Service considers the diversity strategy set out in the Comprehensive Equality Policy and the ability to meet national diversity targets set by the DCLG and Best Value Performance Indicators. HFRS currently has under-representation in terms of gender and ethnic minority and retaining members of our current workforce would adversely impact on the number of vacancies occurring within the Service.

5.4

However, in some very limited circumstances, an extension of an employee's service beyond age 65 may offer advantages to the Service where there is a critical business need for the Service which justifies the request, e.g. to retain the Services of an employee who is due to retire part-way through a complex project until the project has been completed.

5.5

It would be essential for the Head of Human Resources to consider any request for an extension of service made under the circumstances outlined in 5.4 above with a view to ensuring that the business benefits associated with such an extension outweigh the resultant adverse impact. Every case must be considered on its own merit and a decision made accordingly.

6

Contribution to Corporate Aims and Objectives

6.1

The retirement procedure will be an important part of HFRS' employee terms and conditions of employment and contributes to managing our resources, particularly in terms of recruiting and retaining employees.

7

Risk Analysis

7.1

There are no direct concerns in this area

8

Resource Implications

8.1

The retention of existing employees up to the age of 65 will have a positive impact on recruitment and selection costs, which would obviously be lessened by such a policy.

9

Equality Impact Assessment

9.1

An impact assessment has been made on the proposals within this paper and shown that they are not discriminatory. They are considered compatible with the provisions of the European Convention on Human Rights, the Human Rights Act 1988 and the Race Relations (Amendment) Act 2000.

10

Consultation

10.1

Formal consultation with the Fire Brigades' Union (FBU), Retained Firefighters' Union (RFU), Fire Officers' Association (FOA), Unison and GMB has been undertaken. The FBU and RFU have confirmed that they are content with the recommendations. Unison, GMB and FOA have not submitted any comments.

Background Information (Section 100D of Local Government Act 1972)

The following documents disclose the facts or matters on which this report, or an important part of it, is based and has been relied upon to a material extent in the preparation of the report:

Local Government Employers Advisory Bulletin, Employment Relations Number 514, June 2006.

Note: The list excludes: (1) published works; and (2) documents that disclose exempt or confidential information defined in the Act.