News In Focus
Government confirms end of enforced retirement
The default retirement age of 65 is to be phased out this year, the government confirmed today.
Employers will no longer be allowed to dismiss staff just because they have reached the age of 65.
Business leaders had called for a delay in the proposals, put out to consultation by the coalition Government after last year's election, but Employment Relations Minister Ed Davey said today that fears of costly legal disputes resulting from the change were exaggerated.
The Department for Business said that as well as benefiting individuals who wanted to work past 65, "the freedom to work for longer will provide a boost to the UK economy".
It will still be possible to force workers to retire if they are no longer capable of doing their job. Individual employers will also be able to operate a compulsory retirement age provided it can be objectively justified.
From 6 April, the default retirement age procedure will no longer be able to be used to issue any notifications for compulsory retirement. Until 1 October, only those people who were told before 6 April, and who are due to retire before 1 October, can be compulsorily retired using DRA.
After 1 October, no one can be forced to retire through the default retirement age.
The Department for Business has worked with conciliation service Acas to provide comprehensive guidance for companies on the removal of the default age.
"Triple whammy" warning
Despite the minister's comments, Jacqueline McCluskey, an employment partner in law firm HBJ Gateley Wareing, claimed that this new legislation, along with increasing employee confidence from the age discrimination case won this week by BBC "Countryfile" presenter Miriam O’Reilly, and the Equality Act 2010, would represent a “triple whammy” leading to increased age discrimination claims.
Ms McCluskey said that employers would need to ensure they fully understand the procedures they will need to follow if they no longer wish to retain employees in their organisation.
"Employers will continue be able to exit employees for any of the other reasons contained within the Employment Rights Act 1996, including performance, as has always been the case", the firm commented. "Going forward therefore increased focus by employers on the performance of all employees, particularly at appraisal time, will be crucial."
It added: "One thing which is clear is that there will be no requirement to continue to provide group risk assured benefits (such as private medical insurance) for older employees. There will be a specific exemption to deal with this. The continued provision of these benefits will not be required once an employee has reached the age of 65 even if the employee decides to continue working beyond that age."