Maxwell Hodge’s Andrew Newton on plans to end compulsory retirement
GOVERNMENT plans to phase out retirement age will leave employers in a minefield.
The coalition has confirmed the “Default Retirement Age” (DRA) will be phased out, which will have a fundamental impact on employment procedures and a company’s ability to plan ahead.
By ending the DRA, it takes power out of the employer’s hands and adds increasing complexity to the law governing employees. I envisage a huge rise in employment tribunals, particularly among SMEs, who don’t have dedicated HR departments and may not know the right procedures to follow.
I would be first to promote the valuable contribution older workers make to the economy, but for some roles, where the increasing age of workers could become an issue, a firm will have to prove their declining competence rather than simply using the DRA as means of ending employment.
Failure to navigate this legal minefield successfully could leave businesses open to claims of discrimination and unfair dismissal.
Succession planning will also prove tricky. Managers won’t be able to accurately plan for when people will retire, with no definitive dates of when senior members will retire.
This is going to cause problems and businesses will need to be more consistent and invest more time in their working practices, legal procedures and processes.
