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Bosses welcome retirement age progress

Bosses welcome retirement age progress

Bosses have welcomed a Government announcement that it plans to allow people to work for longer by abolishing the age of retirement. The so-called default retirement age (DRA) of 65 is scheduled to be phased out by October 2011.

The Department for Business, Innovation and Skills is also considering increasing the state pension age to 66, restoring its link with average earnings. Bosses may also soon no longer need to enact statutory retirement procedures for staff. A consultation on the proposals will end this October. The department said:

“With the DRA removed there is no reason to keep employees’ right to request working beyond retirement or for employers to give them a minimum of six months notice of retirement. 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 could include air traffic controllers and police officers.”

Dianah Worman, at the Chartered Institute of Personnel and Development, said:

“We are greatly encouraged by the new plans laid out to eradicate the DRA. 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.”

Justin Govier, Partner and Head of Employment at IBB Solicitors, said:

“This change will have a widespread impact on HR practices. It is likely to be very difficult to objectively justify a compulsory retirement age (just as it currently is to justify a retirement age of less than 65). Performance management will become ever more important in managing an ageing workforce. In time we may also see an departure from the ‘cradle to grave’ workforce model towards more project/matrix-based models.”

IBB’s Employment team provides advice on the employment aspects of all major business decisions. For advice, contact a member of the employment law team, call us on 01895 207892 or email employment@ibblaw.co.uk.