Tribunals Claims “likely to increase” as Government Scrap Default Retirement Age

As previously confirmed by the Government, the default retirement age is set to be phased out from 6 April and scrapped (unless this can be objectively justified) from 1 October 2011.

The change is expected to be confirmed later today in a written ministerial answer from Employment Minister, Ed Davey, and will not require further legislation.

Work & Pensions Secretary, Iain Duncan-Smith is also expected to announce changes to the pensions system today, including the publication of the Pensions Bill. This will outline the new rules requiring workers to be enrolled into a pension scheme starting in 2012, and will apply to all employers from 2016 following a staged roll-out.

Employers wishing to retire staff before 1 October will need to make plans urgently, confirming the compulsory retirement of their staff before 6 April 2011. For advice & support in managing your workforce, contact Employment Law Clinic.

Update:

Further documents have now been published, and among these it is revealed that, in ignoring concerns from employers, the government’s response to the consultation accepts that there is likely to “be some limited increase in the use of capability procedures, which in turn is likely to lead to a number of Tribunal cases“.

Employers wishing to safeguard against the possibility of a successful employment tribunal claim will clearly need to manage staff exits carefully. Most employers will need to rely on disciplinary procedures to terminate employment; this will be the same as the current performance management & disciplinary procedures that employers should be using with current underperforming staff.

Employment Relations Minister Ed Davey said:

“Retirement should be a matter of choice rather than compulsion – people deserve the freedom to work for as long as they want and are able to do so.

“Older workers can play an incredibly important role in the workplace and it is high time we ended this outdated form of age discrimination.

“We are putting in place support to help business adapt to the change, but it is important to remember that about two-thirds of employers already operate without fixed retirement ages – and many of those with retirement ages already offer flexibility for workers to work longer.”

Further guidance is available from ACAS, and Business Link have also launched a new Age Posi+ive section.

Filed under: Contracts of Employment, Discrimination, General News, Laws & Regulations by Employment Law Clinic           Post created on: January 13th, 2011