The recent Papal resignation has highlighted 2 relevant areas for businesses. Firstly, the pressure that a sudden and senior resignation can have upon an organisation and secondly, the issues employees face in trying to balance their desire or need to work into their 70′s and 80′s with the competing issues of their health.
Taking the issue of resignation first, what lessons can be learned? The Catholic Church has demonstrated good public relations by its quick communication in both traditional and electronic formats, it has already identified natural successors (to be voted for through its internal procedures) and critically, it has recognised the need to provide reassurance to its stakeholders by appointing the next Pope in a timely fashion. Whatever the Catholic Church feel privately, they have so far managed to show a united and supportive front. They even appear to be allowing the current Pope to have some say in the next appointment and to retain his residency rights for a time. However, many businesses can be seriously rocked by a senior resignation, lose their way while they attempt to cover it up, get caught up in feeling angry at the person for leaving, air their dirty laundry in public or dither in making a new appointment.
Turning to the second issue, this is a real problem for many businesses. Since the abolition of the statutory default retirement age in 2011, a retirement age can be set but it needs to be justified. To demonstrate this legally, the retirement age needs to achieve a legitimate aim, the particular retirement age chosen needs to meet that aim (as this will otherwise be challenged) and it must be proportionate to use the retirement age set to meet that aim. As a result, most businesses who have put their minds to this have been unable to objectively justify a fixed retirement age and the decision of when to retire has therefore largely become a choice for employees rather than a compulsory act. Even in institutions seen as separate from this with their own regulations, challenges are being made. For example, within the police service in England, there are currently employment tribunal proceedings being brought against several forces in relation to Regulation A19 which can be used to bring about compulsory retirement for officers with 30 years’ service. In some forces, they have even taken the step of temporarily revoking this regulation pending the outcome of these cases and it will be interesting to see how these claims play out.
For any business, there is a pressure to manage costs and people effectively. No longer can the performance management of older employees wait ‘as they are retiring soon’ but this places organisations in a difficult situation. They cannot assume an employee who is in their 60′s (or beyond) is keen to retire, their performance will diminish or their health will be bad. However, businesses may in reality need to consider the fact that they may have to have difficult performance discussions with employees and have more health and safety issues to deal with (such as reasonable adjustments, illnesses or deaths). For the employee too, it provides a difficult quandary: the need or desire to work against the need to take care of themselves. The best way to approach this is to have a clear retirement policy (no fixed age) which encourages employees to talk to you about their plans, comprehensive performance and absence management systems which are applied consistently and a well-thought out health and safety policy which considers risk factors for all employees, whatever their age.