Employer groups welcome the abolition of the default retirement age

Employer groups have largely welcomed the phasing out of the default retirement age (DRA), which begins today (6 April).

Organisations will no longer be able to give employees notice of retirement under DRA provisions and will need to objectively justify any compulsory retirement age still in place to avoid age discrimination claims.

Sara Sawicki, partner at Pinsent Masons, says that whilst most employers will not operate with a compulsory retirement age, many will look at voluntary schemes which make retirement an attractive option.

Retirements that were already in motion on or before 5 April can continue through to completion if the employee reaches the age of 65 (or the employer’s normal retirement age if that is higher) on or before 30 September 2011.

The Chartered Institute of Personnel and Development (CIPD) has welcomed the commencement of the abolition but has called on the Government to extend the right to request flexible working at the earliest opportunity.

Dianah Worman OBE, CIPD diversity adviser, said: “The age of the cliff-edge retirement has finally come to an end and the CIPD applauds the Government for holding its nerve in the face of significant business opposition.

“However, now more than ever Government also needs to challenge the assumption that flexible working is a regulatory burden. We’re all going to be working longer and businesses have a vested interest in making our time as flexible and productive as possible.”

Denise Keating, chief executive of the Employers Forum on Age, which campaigned against the DRA, has called the abolition “an incredible leap forward on employment practices”.

Keating added: “With rising life expectancies, individuals staying fitter for longer, and in some cases decreasing wealth of those over the age of 60, it was simply archaic to assume that someone’s age is an indicator of the contribution they can make in the workplace.

“We are expecting to see more and more organisations offering a flexible approach to retirement, which will be good for the workplace, employers and employees.”

However, there has been some concern that employment law changes coming into force this April will cause unnecessary burden for employers.

Earlier this week, director-general of the British Chambers of Commerce David Frost warned that every employment law change, no matter how small, costs employers time and money.

“Unless practical steps are taken to help free businesses from red tape, the burden on employers will only increase, and barriers to job creation and economic growth will remain,” he commented.

Further information on the abolition of the default retirement age, and its implications for employers, can be found on XpertHR.

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