OLDER employees will be given the chance to work for longer, following the the government’s announcement that it will remove the Default Retirement Age (DRA).
The government says that people have more choice when to stop working, while the freedom to work for longer will provide a boost to the UK economy.
Under the current DRA rules, employers can make staff retire at 65 regardless of their circumstances.
Employment Relations Minister Edward Davey commented: “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.”
Mr Davey added: “Older workers can play an incredibly important role in the workplace and it is high time we ended this outdated form of age discrimination.”
The CBI, the UK’s leading business organisation, was critical of the government’s move, though.
John Cridland, CBI director-general designate, said: “The guidance for employers on working without the default retirement age is too little too late. The government’s decision to scrap the DRA leaves businesses with a number of difficult practical issues.”
Mr Cridland added: “The impact on employers, especially smaller ones, will be considerable. There is not enough clarity for employers on how to deal with difficult questions on performance.”
The change to DRA means that from 6 April 2011, employers will not be able to issue any notifications for compulsory retirement using the DRA procedure. Between 6 April and 1 October, only people who were notified before 6 April, and whose retirement date is before 1 October can be compulsorily retired using the DRA. After 1 October, employers will not be able to use the DRA to compulsorily retire employees.
Although the DRA is being removed, the government said it would 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.
Further information
Background information with updated DWP guidance for employers on workforce management without a fixed retirement age is available at www.businesslink.gov.uk/agepositive.
Government removes Default Retirement Age
