The British government is planning to phase out the country's fixed retirement age system by October 2011. The plan restricts an employer from dismissing a staff at reaching the age of 65.
The government said this measure is one of the steps it is taking to help and encourage people to work for longer against the backdrop of demographic change. Employers are asked not to issue any notifications for compulsory retirement using the default retirement age, or DRA, procedure starting from April 6, 2011. Between April 6 and October 1, only people who were notified before April 6, and whose retirement date is before October 1 can be compulsorily retired using the DRA.
"With more and more people wanting to extend their working lives we should not stop them just because they have reached a particular age," Employment Relations Minister Edward Davey said. "We want to give individuals greater choice and are moving swiftly to end discrimination of this kind."
With the removal of default retirement age there is no reason to keep employees 'right to request' working beyond retirement or for employers to give them a minimum of six months notice of retirement, the government said in a statement.
"Many older people want to work after age 65 and have a wealth of skills and experience that are not being used," Pensions Minister Steve Webb said. "We want to get rid of the Default Retirement Age so that if they want to work they can do so."
U.K.'s Trades Union Congress welcomed the decision. "This is a welcome move," TUC General Secretary Brendan Barber said. "It cannot be right that workers lose their protection against arbitrary dismissal overnight because of their age."
But, the Confederation of British Industry said 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. Moreover, the government's timetable to scrap the fixed retirement age will give companies little time to prepare.
"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," CBI Deputy Director General John Cridland said.
The CBI argued that 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 business lobby said.
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