In July 2010, the government published proposals for abolishing the default retirement age that forms part of current age equality legislation. The move, which proposes to take away employers’ rights to impose compulsory retirement on workers once they reach the age of 65, was welcomed by anti-ageism campaigners and trade unions. However, employers’ groups have expressed concern about the speed with which the change is likely to be introduced and its potential consequences.
On 29 July 2010, the Conservative-Liberal Democrat coalition government published a consultation document (439Kb PDF) setting out proposals to phase out the UK’s default retirement age (DRA) of 65 years from April 2011, with the DRA being abolished altogether by October 2011.
The DRA is contained in the Employment Equality (Age) Regulations 2006 (UK0603029I) and enables employers to force employees to retire at 65 years of age. The previous Labour government had already announced that it intended to bring forward a planned review of the DRA to 2010 (UK0908019I). In September 2009, in a case brought against the UK government by the campaigning charity Age UK, the High Court ruled that the DRA was lawful, but stated it would have concluded that specifying the age of 65 was not proportionate had there been no indication of an imminent government review (UK0911029I).
The government proposes that:
The consultation document also proposes removing related statutory provisions, arguing that, with the DRA removed, there would be no reason to keep employees’ ‘right to request’ to continue working beyond retirement, or for employers to give them a minimum of six months notice of retirement. It also seeks views on the desirability of a code of practice on handling retirement discussions.
Phasing out the DRA is among a number of government measures proposed, against a backdrop of demographic change, to encourage people to work longer. Others include reviewing the age at which the state pension should be paid, and re-establishing a link between earnings and the basic state pension.
Employment Relations Minister Ed Davey said: ‘With more and more people wanting to extend their working lives, we should not stop them just because they have reached a particular age. We want to give individuals greater choice and are moving rapidly to end discrimination of this kind.’
Age UK hailed the government’s announcement as:
a victory in our fight against age discrimination in the workplace. We believe that ending forced retirement has many benefits – giving employment security to hundreds of thousands of people, enabling people to save for longer for their retirement and allowing people the dignity of choosing when to retire... It also makes economic sense as our population ages.
The Trades Union Congress (TUC) gave the move a more cautious welcome. TUC General Secretary Brendan Barber commented:
It cannot be right that workers lose their protection against arbitrary dismissal overnight because of their age. But we need to go further to give people real choice about how and when they retire, with new rights for flexible working … Many would prefer a phased retirement. Not everyone wants to work longer and [some] may not be fit enough to continue. Today’s move should be about choice, not an expectation that people will work longer so don’t need decent pensions.
Employer organisations expressed concern at the announcement, arguing that the proposed timetable left insufficient time to prepare for such an important change.
For the Confederation of British Industry (CBI), which had argued for the retention of the DRA (UK1007039I), Deputy Director-General John Cridland said:
Scrapping the DRA will leave a vacuum, and raise a large number of complex legal and employment questions, which the government has not yet addressed … There will need to be more than a code of practice to address these practical issues; we will need changes in the law to deal more effectively with difficult employment situations.
The EEF manufacturers’ organisation warned that the change ‘could lead to employment tribunal cases from some older employees who have been dismissed rather than allowed to retire’.
Adam Marshall, Director of Policy at the British Chambers of Commerce said: ‘The government has pledged to reduce the burden of employment law, but at the same time it is proposing to restrict businesses’ ability to manage their workforce by phasing out the DRA.’
Mark Hall, IRRU, University of Warwick