Early retirement threat for older workers
Transitional arrangements for the repeal of the default retirement age are “unacceptable” and could lead to many older employees being retired early, the Employment Lawyers Association (ELA) has warned.
In July, the Department for Business, Innovation and Skills published its consultation, Phasing out the Default Retirement Age (DRA), proposing a six-month transitional period ending with full abolition in October 2011.
In its response to the proposals, the ELA recommended that the Advisory, Conciliation and Arbitration Service and the Equality and Human Rights Commission be given time to draw up “authoritative but non-prescriptive guidance” for employers.
Consequently, abolition of the default retirement age should be delayed until “at least” April 2012—otherwise, employers may retire older workers rather than face the uncertainty of keeping them on.
James Davies, chair of ELA’s working party on the proposals, says: “Clear codes and guidance will also provide a positive framework for retirement discussions for employees, rather than an annual ordeal during which employees have to argue for their right to continue working.”
The government could introduce rules where, for example, organisations above a particular size are required to produce “senior plans” or hold “staying on discussions” with employees above a specific age, he said.
The ELA further recommended that retirement be stated specifically to come within the “some other substantial reason” ground for dismissal or be listed as a potentially fair reason for dismissal in the Employment Rights Act 1996. This, the ELA says, would give employers and employees greater clarity than at present, where it is left to employers to argue that it comes within the scope of “some other substantial reason”.
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