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Default Retirement Age To Be Scrapped By 2011

Proposals have been unveiled by the Coalition Government to scrap mandatory retirement by October 2011. From April 2011 employers will not be allowed to invoke default retirement to staff aged 65 or over, this is because those selected for default retirement would require six months notice under current legislation.

Under the new plans employers would need to justify any compulsory retirement after April 2011. Previously employers have not been obliged to explain their reasoning for forcing retirement at 65. The proposals also aim to remove the administrative burden created by statutory retirement and the process of requesting the right to continue working.
 
Citing demographic change as one of the key drivers behind the change Employment Relations Minister Edward Davey said:
 
“With more and more people wanting to extend their working lives we should not stop them just because they have reached a particular age. We want to give individuals greater choice and are moving swiftly to end discrimination of this kind.
 
“Older workers bring with them a wealth of talent and experience as employees and entrepreneurs. They have a vital contribution to make to our economic recovery and long term prosperity.
 
“We are committed to ensuring employers are given help and support in adapting to the change in regulations, and this consultation asks what kinds of support are required.”
 
Late last year age equality campaigners suffered a huge blow when the Hey Day legal challenge to the default retirement age was defeated after a three year legal battle. The charity Age Concern and Help the Aged (Age UK) sought a judicial review of the Employment Equality (Age) Regulations 2006 just after the Regulations were published. The news will feel like a victory to the charities who despite failing in their legal challenge achieved their ultimate aim,
 
Responding to the announcement, Chris Ball, The Age and Employment Network’s Chief Executive, commented:
 
“We welcome the Government’s announcement and its decision to go for total abolition of the default retirement age, rather than raising it in line with any future increases in state pension age. The whole idea that employees could be dismissed simply on the basis of reaching their 65th birthday runs totally counter to the general principle of age equality.
 
But not everyone is happy, Graeme Leach, director of policy at the Institute of Directors, commented:
 
"We greatly regret the government's decision to abolish the default retirement age. We do not see how the removal of a mechanism that gives employers flexibility in managing their workforce is compatible with the government's stated desire to boost enterprise and de-regulate the employment arena”
 
And John Cridland, CBI Deputy Director-General, said:
 
“A default retirement age helps staff think about when it is right to retire, and also enables employers to plan more confidently for the future. In certain jobs, especially physically demanding ones, working beyond 65 is not going to be possible for everyone.”
 
The consultation will ask whether the Government could provide additional support for individuals and employers in managing without the DRA or statutory retirement procedure. This includes the possibility of future guidance or a more formal code of practice on handling retirement discussions. Views are also being sought on whether removal of the DRA could have unintended consequences for insured benefits and employee share plans.
 
A copy of the consultation can be found here: www.bis.gov.uk/retirement-age

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