Government scraps default retirement age
Under the current DRA employers can force staff to retire at 65 regardless of their circumstances but the government said the rules must change as people are living longer.
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.
It will still be possible for individual employers to operate a compulsory retirement age provided they can objectively justify it – examples could include air traffic controllers and police officers.
Employment relations minister, Edward 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“Older workers can play an incredibly important role in the workplace and it is high time we ended this outdated form of age discrimination.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.”
Minister of state for pensions, Steve Webb, said: “It’s right that we put an end to this outdated form of discrimination where employers can force people out of a job simply because of their age. We will work with employers to ensure that the transition is fair and well understood.”
The Government is offering help to employers to adapt to the change and has published guidance today in partnership with the Advisory, Conciliation and Arbitration Service (Acas).
There had been concern that removal of the DRA could lead to increased costs and uncertainty for businesses by effectively removing the cut-off point beyond which employment benefits are no longer offered.
The government has therefore said it will introduce an exception so that there are not unintended consequences for employers that currently voluntarily offer group risk insured benefits (income protection, life assurance, sickness and accident insurance, including private medical cover).
Acas chief executive, John Taylor, said: “We stand ready to assist any employers who have been operating with a retirement age adapt to the change in the law. Acas has extensive experience of helping organisations understand how they can comply with Government legislation. Our guidance will be available on the Acas website.”