Default retirement age to be axed from October 2011

29 Jul 10
The Default Retirement Age is to be scrapped from October next year under plans set out in a government consultation today.
By Vivienne Russell

29 July 2010

The Default Retirement Age is to be scrapped from October next year under plans set out in a government consultation today.

Currently, employers can force staff to retire at age 65 regardless of their circumstances, but the government wants to encourage people to stay in work as they are living longer and healthier lives.

It was announced in the Budget that the DRA would be phased out from April 2011. Today’s consultationdocument proposes a six-month transitional phase from existing regulations with the DRA formally disappearing in October.

The consultation also proposes helping employers by removing the administration surrounding the statutory retirement process. Once the DRA is removed there will be no reason to keep employees' ‘right to request’ working beyond retirement age or for employers to give them a minimum of six months notice of retirement.

Employment relations minister Edward 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.'

But business leaders warned that the government’s timetable gave employers little time to prepare.

John Cridland, deputy director general of the CBI, said: ‘Scrapping the DRA will leave a vacuum, and raise a large number of complex legal and employment questions, which the government has not yet addressed. This will create uncertainty among employers and staff, who do not know where they stand.

‘For employers, these proposals could make workforce planning and providing some employment benefits, such as critical illness cover, next to impossible.’

The Trades Union Congress, however, welcomed the plans. General secretary Brendan Barber said: ‘It cannot be right that workers lose their protection against arbitrary dismissal overnight because of their age.

‘But we need to go further to give people real choice about how and when they retire with new rights for flexible working. This can end the retirement cliff-edge where people work full-time one day and stop work the next. Many would prefer a phased retirement.

But he added: ‘Not everyone wants to work longer and may not be fit enough to continue. Today’s move should be about choice, not an expectation that people will work longer so don’t need decent pensions.’

Dianah Worman, diversity adviser at the Chartered Institute for Personnel and Development, said she was greatly encouraged by the proposals.

Our research has shown that many employees wish to work past retirement for differing reasons and many employers are already benefiting from allowing such flexibility,’ she said.

Addressing the CBI’s concerns, she said: ‘While we understand the transitional change issues surrounding the removal of the DRA for employers, we feel that a compulsory retirement age risks undermining this great stride forward.

The consultation closes on October 21.

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