From 6th April 2011 the government intends to begin phasing out the default retirement age, with full abolition coming into effect from 1 October 2011.

Edward Davey, Minister for Employment Relations, Consumer and Postal Affairs feels that the change will be good for the economy. With people living longer, many will want or need to extend their working life. Around two thirds of employers already operate without fixed retirement ages and many others offer the flexibility for workers to work past retirement age. Mr Davey said: “Older workers offer a wealth of talent and experience and are making a vital contribution to securing our country’s economic recovery and future prosperity.”

David Cameron said recently that “Every regulator, every official, every bureaucrat in Government has got to understand that we cannot afford to keep loading costs on to businesses, because frankly they cannot take it any more”, yet the The British Chambers of Commerce is warning that the latest legislation bringing changes to both paternity leave and retirement rights will damage the start of the UK recovery.

As well as retiring the default retirement age, British men now get up to six months paternity leave if their partners return to work early. Business lobby groups complain this is just more red tape for firms to deal with, despite coalition promises to reduce the burden of regulation. Over half of businesses surveyed by the BCC expect extra paternity rights to hurt their business, while a fifth of the1,300 UK companies firms spoken to were worried by changes to the retirement age.
David Frost, director general of the BCC, said: "In the face of promises by the Government to listen to the needs of business and cut red tape, these two new pieces of employment regulation will hit businesses hard. The Budget revealed a policy to exempt start-ups and existing firms with fewer than 10 employees from new domestic regulation, but this week's changes show there is an urgent need to review and scale back policies already on the statute books."

Ian Selwood of Randall & Payne, Cheltenham, said: “One of the worst piece of red tape legislation in the pipeline in my opinion is the removal of the retirement age. This will mean that businesses will only be able to “retire” people by making them redundant or managing them out through performance. Managing somebody out will add significantly to employer red tape as well as leaving a bitter taste for both the employee and employer at the end of somebody’s long career with a company.  It is also contrary to the high youth unemployment that the Government is trying to reduce through initiatives like the apprentice scheme. This is badged under age discrimination, but if it is discriminatory at the end of somebody’s career, then how, for example, is it not discriminatory to fund apprentices based on age rather than ability?”

Edward Davey explained that “There is a provision in relation to “positive action” for situations where “giving persons of a particular age access to vocational training facilities and encouraging persons to take advantage of employment opportunities” but this approach is only legitimate where the action reasonably appears to address existing inequalities.

For more information or help regarding retirement age call Ian Selwood on 01242 548600