A ‘one size fits all’ retirement policy is no longer acceptable
With an ageing population, increasing weight has been given to the argument that a ‘one size fits all’ retirement policy is no longer acceptable and that people aged 65 or over should not be considered incapable of carrying out their jobs to the standards expected.
In July, the government announced that it would launch a consultation process to look at plans to end the default fixed retirement age for the UK’s workforce. Subject to the consultation paper, from October 2011 employers will not be able to force employees to retire at 65 without offering them financial compensation.
The change in the rules would mean that the employer’s only obligation would be to hold a meeting with each older member of staff to discuss their options at least six months before they reach 65.
As an employer must give six months’ notice before someone is made to retire on age grounds, the change in the rules could become effective from 6 April next year.
Removing the default retirement age (DRA) of 65 will mean that employers may have to change how they manage their workforce. Employees will not be forced to work beyond 65, but will have the option to do so and could even stay on into their 70s or 80s.
A handful of individual employers will still be able to operate their own compulsory retirement age but only if they can justify it objectively on the basis that older staff are unable to do a job properly. Examples could include air traffic controllers and police officers.
Employment relations minister, Ed Davey, said: ‘With more and more people wanting to extend their working lives, we should not stop them just because they have reached a particular age.
‘We want to give individuals greater choice and are moving swiftly to end discrimination of this kind.
‘Older workers bring with them a wealth of talent and experience as employees and entrepreneurs. They have a vital contribution to make to our economic recovery and long-term prosperity.
‘We are committed to ensuring employers are given help and support in adapting to the change in regulations’.
Employers that wish to retire older members of staff will be able to do so only on the same grounds that would apply for someone much younger – for instance, because of their conduct or performance.
Before 2006, the compulsory retirement age was set at 65, or earlier for some jobs. But the previous government changed the law so that workers could request to stay on. However, companies are not compelled to let them.
