Many employers had hoped that the Coalition Government would rethink plans to remove the default retirement age of 65, but it has recently been confirmed that the change will still go ahead. This means from October 2011 employers will no longer be able to force (by way of compulsory retirement) the older generation out of the business simply on the basis that they have reached 65.
Comment
I am sure we can all agree that the sentiment behind this legislation of treating older people fairly is good, and given the European basis of this change to legislation it is not that surprising it is going ahead. However, is this the best time to do it?
When you look at how employers will deal with moving older employees on post October the landscape looks uncertain for employers. In short, the employer will need to rely upon and apply the usual methods of effecting a potentially fair dismissal such as capability, conduct, redundancy etc...and I expect this to be a particularly onerous task. For example, determining when an employee's age is unacceptably affecting their performance and/or capability is firstly not going to be easy. In addition, in practice it is going to be a very difficult and sensitive conversation to have with an employee. Indeed this does spell the end of the dignified exit from work for older employees who wish to remain on. Of course, there is the possibility of keeping a compulsory retirement age if the employer can 'justify' why retirement at this specified age is necessary.
However, as always with discrimination legislation, justification will require a very clear reason backed up by evidence. Each situation will turn on its own facts which means until we get a decent body of case law (which usually takes years!) no employer will have an acceptable degree of certainty when looking at this. So, all in all, a well intended change, but the reality for employers who need practicable solutions and certainty in difficult economic times is that this is unlikely to help! Maybe it would have been better to keep this on hold until the recovery was properly underway as although the system was not perfect at least everyone knew where they stood. It is also worth highlighting that charitable employers get no special exemptions and in an industry which is traditionally very 'employee' friendly this may lead to some tough decisions.
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