WA Retirement Agreement - Age Discrimination?

[JB6106]

Is it legal to have an employee sign an agreement stating a retirement date?

We have an employee who is permanent part-time (32hr week). He is 67 years of age and gives us a retirement date but as soon as it get close to the date, he says he wants to stay for another 6 months. This is all verbal.

We are aware that retirement cannot be forced on an employee as this would amount to age discrimination, but if there is a written agreement in place, signed by both the employee and employer, will this be legal under employment law?

Thank you in advance.

 

[Ivy]

Hi there,

Broadly, no. You cannot ask an employee to sign an agreement with a retirement date. This would contravene employment law and more than likely constitute unfair dismissal due to age discrimination because the effect of the agreement would be to force the employee to retire.

If your employee is unable to do his duties anymore, then there are certain actions that you can take, that you would take with any employee unable to do their duties, including by starting with an objective performance review and if necessary by offering them work that they can do.

If succession is a commercial necessity for your business then you can also consider offering certain retirement benefits to employees of a certain age. However in doing this, you would need to be very careful not to breach the unfair dismissal and discrimination laws.

I'll reiterate that you will need to be careful with any course of action you choose whether because you think the employee is no longer able to do their duties or otherwise. You should seek the advice of an employment lawyer before proceeding with anything.