Comment: Scrapping the default retirement age is only the first step

Friday, 30 July 2010 12:00 AM

The government must do more than scrap the default retirement age if it is to persuade both employers and employees of the benefits of older workers.

By Ronnie Fox and Catriona Watt

Plans to scrap the default retirement age (DRA) and statutory retirement procedures next year, giving people the chance to work beyond the age of 65, were introduced this week. They mean that from April 6th 2011 employers will no longer be able to use the DRA to force staff to retire at 65.

Employers will still be able to operate their own compulsory retirement age from this time, provided that they can objectively justify it as a proportionate means of achieving a legitimate aim. But this can often be difficult for employers to demonstrate. Examples of legitimate aims may include economic factors such as the needs of and the efficiency of running a business, the health and safety of the individual and the particular training requirements of the job.

Although the government's motivations for scrapping the DRA are likely to be based more on legal and economic factors, many believe it is also the first step in abolishing discriminatory attitudes to older workers. It removes the safety net for employers and perhaps encourages employers to consider alternative approaches to flexible working.

It is also likely to prevent businesses from using the DRA as a substitute for performance management. Instead employers will have to ensure they have an effective performance management system in place with regular appraisals and clearly defined roles and objectives.

Unsurprisingly, business leaders are concerned that abolishing the DRA will create legal and employment questions which the government has not yet addressed.

One unintended consequence is bound to be a major increase in disputes about whether a particular employee is indeed capable of carrying on working. That will generate work for lawyers, create pressure on employment tribunals and damage workplace relationships.

Abolishing the DRA is likely to have little impact on extending working life on its own. It must be combined with a number of other concerted measures to tackle stereotyping and to enable older workers to remain economically active. This could include better training and development for the over-50s, health programmes to promote the well-being of older workers, a media campaign to tackle ageism and an overhaul of recruitment practices to encourage recruitment of people of all ages.

Changing the hearts and minds of both employers and the workforce is at the core of the challenge. There needs to be a collaborative effort across a spectrum of government bodies, as well as industry, to make ministerial ambitions a reality.

Catriona Watt and Ronnie Fox are employment experts at Fox Lawyers

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