The government has said it will scrap the rule which people can be forced to retire at the age of 65.
The coalition government had already committed to removing the Default Retirement Age (DRA), but have now unveiled the timetable for doing so. Employers will not be able to issue retirement notices after April 2011, with the result that the last retirements of this kind will be in October 2011.
Currently, an employer can force an employee to retire at the age of 65 without paying any financial compensation. Their only obligation is to hold a meeting with the staff member six months before their 65th birthday to discuss plans and to give them notice if they intend to make them retire. In practice, the change will put the onus on employers to hold ongoing conversations with staff to establish their plans, since employees will have the power to deicide their own retirement age.
Although the government is proposing to remove the DRA, it will still be possible for individual employers to operate a compulsory retirement age, provided that they can objectively justify it. Examples include air traffic controllers and police officers.
The Chartered Institute of Personnel Development research shows that many employees wish to work beyond retirement for differing reasons and many employers are already benefitting from allowing such flexibility and therefore continuing to retain the knowledge, skills and experience of older workers.
Some organisations have commented that the removal of the DRA could make workforce planning more difficult and lead to more employment tribunals’ cases from some older employees who have been dismissed rather than allowed to retire.
