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Medical retirement is a way for employees to leave their job with dignity following an illness, injury or old age. This is relevant when employees can no longer complete their work responsibilities or fulfil their role to the same standard. It is difficult for an employer, as the employee has not done anything wrong. However, the employee may not be completing their work to the standard required. Medical retirement can be a good solution for both an employee and their employer in these situations, particularly compared to a medical incapacity process that can often become contentious.

This article explains:

  • how medical retirement works; 
  • whether your business should look at exploring this option for sick or injured employees; and 
  • how to practically manage the process.

How Does Medical Retirement Work?

Medical retirement refers to when an employee leaves their role due to illness or injury. The reason is that they are no longer able to do the work to the best of their ability. Unlike typical retirement, after a medical retirement, an employee will usually work for a different job they can complete, even with their illness, injury or old age. 

Importantly, both you (as the employer) and the employee in question must agree to medical retirement. It is almost always worth discussing this option with the employee before pursuing a process for medical incapacity. Medical retirement provisions may be in an employment agreement or workplace policy. However, an employer and employee can still agree to medical retirement even if they are not. As with all important agreements, you should record this in writing.

Should Your Business Explore Medical Retirement for Sick or Injured Employees?

There is a range of benefits to pursuing this option with an employee. For your business, a medical retirement offers some certainty. You are often able to hire someone else for the job sooner. Likewise, you maintain good relations with an employee, and they are less likely to raise a personal grievance. 

For the employee, it can make a huge difference having medical retirement as the reason for leaving. You should reflect that an employee is taking medical retirement in their record of service and other references, rather than a dismissal for medical incapacity. For employees who have worked diligently for your business and suffered an injury or sickness through no fault of their own, a medical retirement process can preserve their dignity in a difficult period.

Managing Medical Retirement

There can be some issues with managing medical retirement as an employer. As a retirement process, medical retirement needs to be agreed upon by both the employer and employee. The employer cannot unilaterally force it upon the employee – at that stage, a medical incapacity process is more relevant. 

Starting a conversation with an employee can be a tricky first step. It is essential not to give the impression that you are putting pressure on the employee to resign. Getting expert help from an employment lawyer at this stage is advisable. Additionally, you should give your employee the option to have a representative or support person with them for any conversation on medical retirement. A support person can help the employee in what can be an emotional conversation. Likewise, they will have someone else in the room who is not personally affected and can hear the information, ask questions, and talk the options through. 

At all times, you should consider your business’ good faith obligations towards the employee. Even if they cannot do their job as effectively, it is crucial to be fair and reasonable when discussing medical retirement. Do not blame the employee for the circumstances.

Key Takeaways

When an employee suffers a serious injury or illness that prevents them from completing all of their work responsibilities, there are a few different options to consider as an employer. Most businesses will think about a medical incapacity process at that stage. However, a medical retirement benefits both the employee and the employer. Having the employee medically retire (if both parties agree), rather than be dismissed through medical incapacity, preserves the employee’s dignity. Likewise, it offers certainty and a potentially quicker process for an employer to find a replacement. If you want to know more about medical retirement and how to manage a successful process, contact LegalVision’s employment lawyers on 0800 005 570 or complete the form on this page.

Frequently Asked Questions

What is medical retirement?

Medical retirement is when employees leave their role due to illness or injury, preventing them from doing the work to the best of their ability.

Can an employee look for a new job after they have medically retired?

Yes, medical retirement often results in the ‘retired’ worker seeking new work – often in an area where they are not affected by the injury or illness that set them back in their previous job.

Can an employer force an employee to medically retire?

No. An employer cannot force or put undue pressure on an employee to take medical retirement. If the employee cannot do their duties due to a medical reason, an employer should instead consider a process for medical incapacity.

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