by David Yeandle, Head of Employment Policy
30. July 2010 10:07
During a recent meeting with Vince Cable, we made it clear that manufacturers were seriously concerned about the Government’s plans to phase out the default retirement age. Over the coming weeks, I will ensure that Ministers are made fully aware of members’ concerns and this has already begun with discussions that I have recently had with both Ed Davey and Steve Webb, the BIS and DWP Ministers responsible for this policy.
There are a number of reasons why the Government’s plans to scrap the Default Retirement Age (DRA), so quickly, are a bad idea...
This important change in employment legislation will create many practical problems for manufacturers that have not yet been addressed by the Government. These range from making workforce and succession planning more difficult to the high costs of providing life assurance and medical cover for older employees. The Government’s very short timetable gives employers virtually little or no time to alter their policies and practices before this important legislative change is introduced.
There is also a real danger that removing the Default Retirement Age could increase the number of tribunal claims with the onus being placed on employers to prove whether older employees are capable of continuing in their current role. Inevitably, this could lead to claims from some older long-serving employees who have been dismissed rather than, as is often now the case, them being allowed to retire with dignity.
Manufacturers also need an explanation of what they feel are contradictory messages from the Government. On the one hand, they are being encouraged to take on more young people to reduce the current high levels of youth unemployment. On the other hand, the Government is making it more difficult for them to plan for changes in their workforce and create job opportunities by phasing out the DRA.