ECJ decision will disappoint
ECJ decision will disappoint many older workers but CIPD warns that the days of the default retirement age are numbered
The European Court of Justice ruling on the Heyday case will come as a disappointment to many employees approaching retirement age who are being forced out of the labour market irrespective of their desire to continue working, says the Chartered Institute of Personnel and Development (CIPD).
The ruling, which finds that the Default Retirement Age (DFA) does not contravene the European Framework Directive on equal treatment, means experienced and capable older workers lose out by not having the choice of staying on in employment.
Mike Emmott, CIPD Employee Relations Adviser comments:
Hopefully the government will realise sooner rather than later that scrapping the Default Retirement Age is a must. Not just to meet the growing demand for working beyond 65, but also because it is hugely beneficial to business and the wider economy.
Compulsory retirement ages can leave organisations blindly waving goodbye to valuable skills and experience. They do not just hit people at retirement age. They can lead to lazy management of workers for many years as older employees are filed by their managers under the soon to retire category.
Our research shows older workers want to keep working, and this desire grows as the retirement age looms ever closer. Much of this is due to financial reasons in these days of squeezed pensions and longer life expectancy. Whatever the reasons, getting the most from these experienced employees should be good for business, good for the economy and good for the well-being of the workers themselves.
Although this downturn appears to be hitting younger workers much harder than their elders, there is still a compelling case for a thorough government review of the default retirement age, by which time hopefully the economy will be in better shape.
A CIPD research report Future Demand for Working Among Older Workers finds that just under two-fifths (38%) of individuals intend to work beyond the age of 65, with most (68%) citing financial necessity as the main reason for staying on. A futher 31% of individuals would continue to work beyond retirement age if their employer allowed them to work flexibly.