hr_newsletterAug2010DefaultAge

HR Matters - September 2010: Abolishing the Default Retirement Age – We want your views

In the emergency Budget delivered on 22 June 2010, the coalition Government announced that it will consult on how it will phase out the default retirement age from April 2011.

There appear to be two main scenarios open to the Government:

Scrap the ‘Default Retirement Age’ of 65 years completely

This would mean that unless an individual decided to ‘retire’ (or resign), employers would only be able to ‘dismiss’ such an employee fairly for conduct, capability, redundancy or ‘another substantial’ reason. With the upper age limit on redundancy removed this route could be expensive – particularly if the individual could argue the real reason was their age.

Whilst we have several clients with employees over the age of 75, the unintended consequence of no default retirement age at all may be the indignity of employees being dismissed on capability grounds – and employers facing even higher numbers of tribunal claims.

Some commentators have also expressed concern about the impact on manpower planning, however, whilst knowing when an individual would have retired will only form part of your workforce and the reality is that you have to deal with resignations of younger staff.

Raise the Default Retirement Age from 65

This option would provide employers with the existing structure, just a different age to apply it.

Given that life expectancy continues to generally rise, is this a sensible solution to help individuals keep earning and for employers to retain quality staff?

If this option was picked what age would you wish to see as the default - 68, 70, 75?

Should it go up in one step or increase over a number of years?

There have been other calls to give such workers other rights, such as the right to move to part-time working. Would you be in favour of this type of approach?

We would like your views

To help us collate your own views on this matter, please use the link below to take you to our short questionnaire. We will then submit a collective response to the Government.

Click here to go to the questionnaire. Thank you.

In addition to its standard packages, EBS also offers a range of specific Human Resources services:

Dispute Resolution Programme - Managing grievances fairly
Exit Management - Dismissing employees fairly
Getting Age Right - Avoiding age discrimination
Performance Management - Taking action on employee poor performance
Recruitment Audit - Helping management recruit more effectively
Recruitment Plus - A fully managed service to recruit more effectively