The government consultation on whether to scrap the default retirement age (DRA) closes today, having received impassioned pleas from employers’ groups on both sides of the argument.
The responses to the consultation will form a key part of the DRA review into the current legislation, which enforces retirement at 65.
A bid to scrap the DRA through an amendment to the Equality Bill collapsed last week after the amendment was withdrawn. The leader of the House of Lords, Janet Royall, told the house it was necessary to wait for the outcome of the government review before any decision was made.
Business groups in favour of scrapping the DRA include the Chartered Institute of Personnel and Development (CIPD), the Federation of Small Businesses (FSB) and The Age and Employment Network (TAEN).
The CIPD said “government should be bold and remove the DRA and not just replace one arbitrary age with another”. “Arguments that businesses need the DRA to manage poor performers are poorly constructed and easy to dismantle,” it added.
Chris Ball, TAEN chief executive, said: “Mandatory retirement is utterly unnecessary and causes untold damage to Britain’s economy and the lives of people forced out of work when they are most vulnerable.”
The FSB said about 60% of small businesses wanted the DRA scrapped, but stressed the need for a provision in the law to protect employers that need to retire staff because of ill health, threatening their levels of performance.
Those opposed to any change to the law include the British Chambers of Commerce (BCC), the CBI and manufacturers’ body the EEF.
The BCC insisted that there was no evidence of widespread use or abuse of the system – suggesting that only one in four businesses use the DRA.
“Employees already have the right to request to postpone their retirement, and the existing rules allow for the fairest outcome on both sides,” it added. “Having a default age is a crucial trigger point for a conversation between the employer and employee about their future.”
The CBI said the DRA helps staff think about when it is right to retire, and also enables employers to plan more confidently for the future, while the EEF said only 14% of its members wanted the DRA to be scrapped.
The Institute of Directors (IoD) found some middle ground, calling for the DRA to remain, but the retirement age to rise to 68. “Such a step would allow people to work longer, while ensuring that employers retain the flexibility they need to manage their workforces,” it said.