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Default retirement age to be scrapped by October 2011
The default retirement age (DRA) will be abolished from 1 October 2011, the Government has announced.
It follows confirmation in the Emergency Budget that the Coalition would speed up the withdrawal of the DRA.
The proposals, which are now the subject of a consultation, allow for a six month transition from the existing regulations. It means that the changes could begin to take effect from next April.
Currently, an employer can force a member of staff to retire at the default age of 65, irrespective of their circumstances. Although staff can request to work beyond the DRA, it is entirely at the company’s discretion.
Rachel Krys, Campaign Director at the Employers Forum on Age, described the move as ‘an incredible leap forward,’ adding that employers have ‘nothing to fear’ from the proposals.
However, the Confederation of British Industry (CBI) has expressed concerns over the speed of the changes.
‘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,’ said John Cridland, the CBI's Deputy Director-General.
‘This will create uncertainty among employers and staff, who do not know where they stand. For employers, these proposals could make workforce planning and providing some employment benefits, such as critical illness cover, next to impossible.’
In a recent poll carried out by the Federation of Small Businesses (FSB), 80% of respondents said they do not use the default retirement age, while 90% of small firms would consider an employee going into part time or flexible working, rather than retiring.