News
Retirement process – is there a duty to consider “in good faith”?
7 December 2010
Employers who follow the retirement process but invariably turn down employee requests to continue working may be at risk of having any subsequent dismissal declared unfair, if other tribunals follow the line recently taken in the case of Ayodele v Compass Group plc.Compass had a retirement policy providing for retirement at age 65, which stated that the company had a duty to consider any request to work beyond that age, but without providing any guidance as to how that consideration should be carried out. Mr Ayodele's contract of employment also provided for retirement at age 65. On receipt of the company's notification of retirement he requested to continue working for a period of two years; this request was refused, as was his subsequent appeal against that decision.
Whilst accepting that the wording of the relevant sections of the statutory retirement process suggests that a summary process is permissible, the Tribunal found on the facts that, although retirement was the reason for Mr Ayodele's dismissal, it was unfair: "we do not find that a completely sham process or a mere charade complies either with the letter or the spirit of the legislation...........because it is implicit without the necessity for express wording that any statutory obligation must be performed in good faith and genuinely."
The tribunal awarded Mr Ayodele some £16,000, including a compensatory award of two years' net pay less the amount of his mitigated earnings.