News In Focus
29 July 2010
Default retirement age to be retired in 2011
After years of debate, the UK’s default retirement age of 65 is on course to be scrapped from October 2011, protecting employees who wish to work beyond that age from what many regard as arbitrary dismissal without compensation. Although the change would not force workers to carry on beyond 65, it would give them the option to do so.
The new proposals, put out today for consultation, would mean that the effect of any changes would kick in during April next year, as employers are currently required to give at least six months' notice of their intentions to employees approaching retirement age.
Age campaign groups were quick to celebrate victory, having previously failed to have the default retirement age overturned in the courts.
However, the CBI warned that scrapping the default retirement age left “unresolved problems”.
John Cridland, CBI deputy director-general, 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. There will need to be more than a code of practice to address these practical issues; we will need changes in the law to deal more effectively with difficult employment situations.”
The Forum of Private Business said the proposal "could prove highly damaging to thousands of small firms", hampering their abilities to plan for the future, and "open the door to costly and painful employment tribunals, as an employers’ only means of ending employment will be through a ‘capability dismissal’ based on the declining competence of the worker".
Click here to access the consultation.