Many business managers will already be well aware of the abolition of the default retirement age. The last date at which an employee could be notified of his employer’s intent to retire him has been and gone, and it is no longer included as a potentially fair reason for dismissal.
There is no question that this change in the law has the potential to cause massive ramifications within the employment market. It brings an end to workers being forced into inactivity for no reason other than their age. There is little doubt that the ability for an employer to compulsorily retire an employee amounts to age discrimination and it is right, given the content of the Equality Act 2010, that it should be unlawful. In addition, for a country struggling to fund an ever aging population, any means of keeping people financially independent must be welcome.
However, those who are against the changes argue that they will result in an aging workforce, which brings with it a number of possible problems. There is the greater risk of ill-health in the older worker that may lead to a larger amount of sickness absence than the younger colleague. Also, after many years’ service, it is likely that the older worker is on a higher wage and therefore significantly more expensive to his employer than a younger employee. There have been concerns raised about the capability of the older worker and the effect this may have on the quality of their output. For these reasons, and various others, many business managers are wary of what the removal of the default retirement age will mean for their organisation.
There have also been questions raised about what this might mean for young people attempting to enter the world of work. With the option available to postpone retirement indefinitely, there will be fewer vacancies to be had by those at the start of their career. The effect this might have on our already very high youth unemployment rate remains to be seen.
From an employer’s perspective, these changes may bring a level of uncertainty in the future with regard to elderly workers issues. Obviously, it would be unwise to attempt to dismiss an employee on the grounds of compulsory retirement. To do so is likely to give rise to not only a claim of unfair dismissal, but also a claim of direct discrimination on the grounds of age. As there is no limit to the quantum of damages available for a discrimination claim, this could prove very costly to an organisation.
There is, under the justification of “some other substantial reason”, still a lawful method of dismissing an employee when they reach a certain age. This involves the creation of an Employer Justified Retirement Age (EJRA). There are certain professions where an EJRA is already in place. These include posts in the emergency services or in air traffic control, where exceptional levels of fitness or awareness are paramount.
The creation of an EJRA involves careful planning and it would be prudent to take professional legal advice before doing so. There must be objective reasons for the implementation of an EJRA and these should be capable of being proved if necessary. As with the former default retirement age, a worker has the right to request to work past an EJRA. Employers would be required to treat each worker’s application to work on in the same manner.
Existing Q and A Law Clients who subscribe to our fixed fee employment law service with free telephone advice line are encouraged to speak to Iain or Lisa with any questions they might have arising from any of the above. Non-clients are also welcome to take advantage of a fee-free initial consultation with the same regard, call 01707 444450 and ask for Iain Lock or Lisa May who would be happy to talk with you.
