Business groups angered at Conservative pledge to scrap default retirement age

The Conservative pledge to “abolish the default retirement age (DRA)” entirely – going one step further than the government which yesterday promised to remove only the DRA at 65 – has angered business groups.

In the Conservative Manifesto 2010, published today, the Tories have promised to remove the DRA if they win the general election, because they claim older people who want to carry on working past 65 should be able to do so.

But John Cridland, deputy director-general at business group CBI, said: “Ending the default retirement age would be unhelpful. It helps employees think about when it is right to retire, and enables employers to plan more confidently for the future. This is particularly important for smaller companies.”

Head of employment policy at manufacturers’ body the EEF, David Yeandle, agreed. “Manufacturers will be concerned that the Conservatives have gone further than Labour in pledging to abolish the default retirement age. Any changes to the retirement age of 65 must be implemented gradually so that employers and employees can plan for both their future needs with greater certainty.”

Employers use the DRA to help with workforce and succession planning, but campaigners have argued too many firms use it as a cost-cutting measure to retire staff regardless of capability or skill.

The Chartered Institute of Personnel and Development said it welcomed plans to scrap the DRA, provided it was done from 2013 giving employers enough time to prepapre.

Yesterday the Labour party pledged in its manifesto to remove the DRA at 65, signalling that it could be scrapped or raised, but without providing further detail. The government was expected to release the results of a separate review into whether the DRA should be scrapped, or increased by a few years, this summer. But with the general election due on 6 May, it is unclear when a final decision might be made, or by whom.

But campaign groups have urged whichever party wins the general election to abolish the DRA. Rachel Krys, director of the Employers’ Forum on Age told Personnel Today: “It will be difficult for whoever wins the election not to continue with the review and consultation over abolising the DRA. It feels like removing the DRA is a big change even though in fact it isn’t.”

She added that the current right older workers had to request working beyond the default retirement age was ineffective as it did not give indivdiuals the chance to challenge a firm’s decision and argue the case for continuing to work past 65. “The right to request has no teeth at all, employers are being advised not to give a reason why they say no, and they cannot challenge their manager.”

The DRA was implemented in 2006 under the new age regulations. Research by Age UK, published earlier this year, found more than 100,000 workers were retired during the recession due to employers using the DRA.

Comments are closed.