This September sees the latest extension to the Discrimination
(Jersey) Law 2013 (Law), with the addition of age as a protected
characteristic. Whilst this amendment will have a significant
impact in a number of areas for Jersey employers, without question
the biggest changes relate to retirement of employees.
Historically, the position of employees was that they could
simply be shown the door once they reached 65. However, in future
not only will the upper age limit for unfair dismissal be removed,
but also employers will have to objectively justify any compulsory
retirement age. In order to allow employers to prepare for this new
world, there will be a transitional period, with the majority of
the new age discrimination laws coming into force immediately, but
these specific retirement changes being deferred until 1 September
Once these changes come into force whilst in theory it will be
possible to retain a compulsory retirement age, the requirement to
objectively justify this age will mean most organisations will have
little choice but to operate without one. Direct comparisons can
usefully be drawn here with the UK who went through a similar
change in 2011, and whilst there have been some examples where a
default retirement age has been objectively justified, the reality
is this is an exception. What has happened instead is that
employers have found new ways to work that suit them.
Certainly one major benefit of the change is that it forces an
employer to look more at the strengths and weaknesses of the
individual, rather than the arbitrary number of their age. If an
employee is good at their job – why not keep them on and
retain that knowledge and experience and if they are not –
don't wait until they are 65 to deal with the problem!
The change also forces employers to focus on succession planning
where it is most needed. The truth is a certain level of staff
turnover is both inevitable and healthy, and so it is unnecessary
to know when every employee is going to leave, whether that be to
retire or for any other reason. What businesses need to focus on
though are the key roles and have a frank conversation with the
individuals (not just those over 60) about future plans and
Others will adopt more creative solutions in order to encourage
retirement. One benefit offered is to arrange financial advisors to
help employees plan for retirement, so that when they do reach 65
they are financially able to do so. Another option is to put in
place flexible retirement schemes, with a retirement date agreed
with the employee in return for a gradual reduction in hours, to
help them ease into retirement.
Where employees do stay beyond normal retirement age, usually it
should be possible to retain them on their existing contracts of
employment. One important point to note in this regard is that the
Law will continue to allow employers to exclude employees from
insurance related benefits such as private medical if they are
above retirement age. The temptation of many employers will be to
use fixed term contracts for such staff, however this can often
cause more problems than it solves as the expiry of a fixed term
contract is treated as a dismissal. During the two year transition
period, this point is academic because the upper-age limit of 65 on
unfair dismissal claims remains, however, once it is removed
employers will need to demonstrate a fair reason.
Whilst with any new employment legislation it is very easy to
portray it as anti-business, Jersey employers should see this
change as an opportunity to change how they think about their
people. When Jersey employers already have such a relatively small
pool of employees to choose from at the best of times, the Law will
ultimately force them to remove some of those traditional
preconceptions around age, and provide the platform to maximise the
talent there already is within the island.
Article first published in CONNECT in September
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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