Today marks the beginning of a new era in the workplace. The days of a fixed retirement age are now behind us. As we live longer, healthier lives, we will want to work on into older age and employers have granted most requests to do so since the right was introduced.
In a minority of cases, however, it is much more difficult to offer work beyond 65, especially if it is physically demanding. For that reason, employers need a framework to manage retirement, and at the moment one does not exist. Four out of five employers made use of the default retirement age, and its abolition will make a huge difference to how we all approach retirement. But we have yet to see a practical solution coming from the Government to help businesses to manage without it.
I am deeply concerned by the legislative void created by the Government’s decision to scrap the default retirement age (DRA) and feel that ministers must get to grips with the practical issues it creates for employers. In just five years, we have seen the number of tribunal claims rise by 173 per cent, to 236,000 in 2009-10. So it is not surprising that employers are worried that, after today, this legal vacuum will lead to a further increase in age-related claims. Employees, too, will be concerned that raising the issue of changing or redesigning a job specification with their employers as part of a retirement plan could be used as a reason for dismissal or to indicate that they are no longer up to the job.
To solve these problems and give both sides some certainty, what is needed is a safe mechanism whereby an employee’s retirement plan can be discussed openly without the risk of a claim. We call this a “protected conversation”. This would allow either party to initiate the discussion, and as it would be exempt from age discrimination law, there would be no fear for employers of a claim being brought, and for the employee of being deemed unwilling to work. A similar system is in place in France and it works: employers have the right to ask older staff what their plans are for retirement without fear of being sued.
We also need guidance on when employers can justify having a retirement age, as when a job is particularly demanding. European law allows employers to retire people from such jobs, but the Government has still done nothing to help them to do this, leaving them in the lap of the courts if they use this right.
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The DRA helped staff to think about when it is right to retire and enabled employers to plan more confidently for the future. For all our sakes, we need clarity on what will replace it.
John Cridland is Director-General of the CBI