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UK — Debate rages over abolishing default retirement age

29 July 2010

Debate has broken out, following the announcement by the UK government today, that it is planning to scrap the default retirement (DRA) age of 65 from October 2011.

Under the proposal, employers would not be allowed to dismiss staff simply because they have reached the age of 65, as happens at present.

John Cridland, CBI Deputy Director-General, said "the decision to abandon the DRA leaves business with many unresolved problems, and the government's timetable to scrap it will give companies little time to prepare."

"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. This will create uncertainty among employers and staff, who do not know where they stand. 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."

"For employers, these proposals could make workforce planning and providing some employment benefits, such as critical illness cover, next to impossible."

"A default retirement age helps staff think about when it is right to retire, and also enables employers to plan more confidently for the future. In certain jobs, especially physically demanding ones, working beyond 65 is not going to be possible for everyone."

The opposite view has been put forward by the Chartered Institute of Personnel and Development (CIPD).

CIPD diversity adviser Dianah Worman said in a statement today "We are greatly encouraged by the new plans laid out to eradicate the DRA. Our research has shown that many employees wish to work past retirement for differing reasons and many employers are already benefiting from allowing such flexibility. With the allowed transition period of 6 months and adequate support, employers will be able to continue to benefit from retaining the knowledge, skills and experience of older workers."

"The abolition of the DRA will help to encourage better management, which should bring a productivity boost for many employers. While we understand the transitional change issues surrounding the removal of the DRA for employers, we feel that a compulsory retirement age risks undermining this great stride forward".

"We would encourage all employers to look at the potential cost saving benefits of continued good practice and management of their older workforce."



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