Days are numbered for compulsory retirement age

The government has announced proposals it believes will help to outlaw age discrimination in the workplace – including banning a default retirement age.

It plans to create a right for employees to request working beyond a compulsory retirement age, which employers will have a duty to consider, and said it will also closely monitor the appropriateness of keeping a set retirement age, subjecting it to formal review five years from implementation.

Trade and industry secretary Patricia Hewitt said it was vital that the UK widened the pool of workers so that employers can make the most of the full range of talent and skills available.

“This legislation is not about forcing people to work longer. The default age is not a statutory compulsory retirement age; employers will be free to continue to employ people for as long as they are competent and capable.

“The right to request [condinued employment after a normale retirement date] will help to provide more choice and flexibility for those who wish to stay in work beyond retirement,” she said.

Vote-winner

A new study shows that the proposals could be a vote-winner.

According to research by Hay Group, 65 per cent of economically active people think compulsory retirement should be banished.

Fewer than one third of people (32 per cent) believe that extending the retirement age would force them to work beyond their abilities.

The research also casts doubt on the suggestion that businesses are worried about employment tribunal claims and extra management costs.

Most employers questioned (86 per cent) supported the abolition of a compulsory retirement and believe that it would give staff greater flexibility to carry on working.

Next equality battleground

Hay Group consultant Georgina Churchlow said: “Ageism is the next and the biggest battleground for equal employment rights because it affects us all.

“Our research reveals that more government action and greater clarity on abolishing retirement age is needed now.

“Both employees and employers support longer working lives but without clarity on new legislation employers are not doing enough to implement anti age-discrimination policies and create age positive opportunities for their employees.”

Owen Warnock, employment law partner at law firm Eversheds, said the move is a major shift from the original proposals on age discrimination and is a victory for the campaign for simple and straightforward employment law.

“We now have some clear guidance on retirement age, which will avoid a lot of confusion in the workplace.

“The Government has also acknowledged that some people will want to continue working and have addressed this issue in the proposals.

“The Government has listened to employers’ views and, while these proposals do not go far enough, on the whole the right balance has been struck.”

However, Warnock said Eversheds thinks the Government could do more.

“These proposals do not include a mechanism for employees and employers to have a discussion about ‘trading down’ in a safe environment without the risk of constructive dismissal cases,” he said.

“We are working with some forward-thinking employers to introduce mechanisms to promote such discussions while minimising the legal risk.

“This will become more important as the retirement age in many workplaces goes up to 65.”

Abolition of mandatory date inevitable

The Chartered Institute of Personnel and Development (CIPD) believes that the Government may have ducked the issue, and that employers should prepare for the inevitable abolition of mandatory retirement ages that will follow.

Dianah Worman, CIPD diversity adviser, said: “Although this decision has been dressed up as a clever compromise, in reality it simply delays the inevitable end of mandatory retirement ages.

“The five-year review contained within this government announcement suggests they know this themselves.

“By ducking the issue, the Government risks giving employers an excuse to delay action they need to start taking now if they are to attract and retain talent in a tight labour market,” she said.

“There are still employers out there who use mandatory retirement ages as a cover for poor management.

“Effective management of people ensures that people who perform well are retained and people who do not are managed or removed.

“Mandatory retirement ages are a poor substitute for performance management.

“If this voluntary approach fails, many people who want and need to work for longer will be deprived of this choice.

“It is time we all woke up and recognised that 65 is no longer old.”

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