Retirement
age employees are in an unfair situation because they have no employment
rights, but is mandatory retirement a government or employer responsibility?
Compiled by Simon Kent
Laura Wander
HR director, Freedom Finance
At the moment, if people stay on beyond a company’s normal retirement age it
is because the employer feels that person can stay and the employee feels they
have the ability to do the job. However, legislation discriminates against them
because they have no employment rights – so it is an unfair situation.
Set retirement ages provide a useful exit point for employees and enable
employers to manage that exit. An employee’s performance may drop towards the
end of their working life, but that can be managed appropriately because the
employer knows there is an end point.
If there isn’t a natural end in sight, the only way – for example, you have
to say that their performance is not good enough.
Performance management can be a horrible process to go to manage an
employee’s exit is to go down the performance management route. This means you
may no longer be able to make allowances for someone who has given 10 years of
good service through to terminate an employment relationship. With a set
retirement age, the end of an employee’s working life can be very pleasant; an
employee may asked to stay on, but if not there is no reason for conflict.
I am sure part of the rationale for this consultation is the need to offer
people opportunities throughout their lives – you want to show that when they
reach a particular age they are not useless – and the problem with having a
mandatory retirement age is that some employers may look at people who are 50
or 55 and think they have got only 10 years of work left.
Whatever happens, you need to be able to provide a relatively easy way for
people to retire if they want to. There should be a good way of saying
"OK, you’ve done well and now it’s time for you to enjoy your life".
I question the Government’s reasoning. And while it may be cynical of me, I
wonder if the Government is actually trying to turn employers into the
paternalistic partner in this relationship rather than the government being the
paternalistic partner. It is trying to put the onus on the employer to take
responsibility for the employee’s long-term provision.
Emma Sutherland
HR officer, BI Worldwide
Retirement should be decided on an
individual basis in companies. There should be talks to ensure decisions
benefit both parties. I don’t think it would be a bad thing if there was a law
setting this out. But rather than deal with age it should ascertain whether an
individual is able to do the job or not.
A company needs to manage employee expectations. There needs to
be good communication between employer and employee and some management gurus
say the UK’s leadership talent is not at the level it should be to do this.
It’s important to ensure an organisation’s managers are running companies
effectively, setting the right targets and making sure they understand how employees
feel.
Paul Smith
Director, Harvey Nash
Legislation on ageism and retirement
age is more of an economic and political issue than a personal one. If someone
is able to retire at 52 and keep going in some other way, I’d argue that that
is what they’ll want to do.
I believe people should work for as long as they want to and to
put mandatory ages on retirement is limiting. What is crucial is that pensions
should be created in a flexible way to allow them to be called on at any time.
The Government should legislate to see that insurance companies do not penalise
early retirement and to allow people to have the choice of taking their pension
at any age from 60 to 70.
What inhibits people from retiring is rarely the company they
work for; there are usually personal reasons.
Mike Emmott
Head of public policy, CIPD
The view of our members is that mandatory retirement ages
should be scrapped. Our members are not attracted by being able to fix their
own retirement ages or by a fall-back age of 70. We believe where employers are
reluctant to abandon retirement ages there is a lack of imagination about how
to adjust working practice to enable employees to continue working.
If fixed ages are scrapped there will be more importance
attached to company processes for renewing employment contracts and measuring
competence and contribution to the business. Some companies will be under
pressure to improve their performance management systems, but we think that
retirement ages are a short cut and are no alternative to thinking
constructively about what individuals want and what they’re capable of.
Ray Baker
Director of social responsibility, B&Q
B&Q has no upper age for
retirement. It does have a pensionable age – which is to do with our parent
company – but if people want to continue working beyond that age, it is their
choice.
People make the choice about what they want to do, so there’s a
bit of self selection going on.
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I work with the Employer’s Forum for Age and I feel that age
should be no barrier for someone to continue working. We find that people want
to continue working for different reasons, so when people reach the ages of 60
or 65 they may still have financial dependants.
They should therefore have the option to continue to work if
they wish.
