How to Write a Service Extension Letter for a Valued Employee Over 60?

Hi,

This is J. Rani. I am working as an HR Executive in Puducherry. We have an employee who has completed his 60th year, yet we want to retain him for his outstanding work performance and coordination. Can anyone help me with the format of a Service Extension letter for him?

Regards,
Jayarani N.

Dear Friend,

If the company policy states that the retirement age is 60, it is better to proceed according to the company rules and complete the process. If you and your management feel that the individual is a valuable asset and you still require his services, consider hiring him as a consultant for a year. You can then extend this arrangement on a yearly basis.

By taking this action, the company's liability will decrease, and he will also be happier as he will have to pay less income tax. If you decide to retain one employee beyond the retirement age, it may set a precedent for other employees, leading to expectations from them as well. This could send the wrong message and create hope among other employees.

Instead, terminate his employment in line with company policy and then rehire him as a consultant. This way, it is the prerogative of the management, and nobody can expect the same treatment.

Think, discuss, and implement - Kameswarao

Dear Friend,

Thank you very much for your suggestion to appoint him as a consultant. Though we had a discussion about this, our management still wants to extend his service in the role as he has rendered his loyal service for more than 21 years with us. So kindly help me with the Service Extension letter format.

Regards, Jayarani .N

No, still, I believe that you should insist the management to discontinue his services as a regular employee and hire him as a consultant.

If you and your management are not in favor of hiring him as a consultant, then you should mention the details of the appointment letter and specifically spell out that even though, as per the company policy, you are to retire on ___________ after attaining the age of 60, considering your good work and the business requirements, your employment with the company is extended for a period of ________ years, i.e., up to ________. The other terms and conditions remain unaltered.

With best regards