Default Retirement Comment
Default Retirement Comment
From IntaPeople, REC, CIPD, CBI & TAEN.
Plans to scrap Default Retirement Age a blow for 16 24 year-olds
The Governments decision to abandon the Default Retirement Age could have major repercussions for the UKs younger generation, according to specialist IT, technical and engineering recruitment consultancy IntaPeople.
Under current legislation, companies can force their workers to retire when they reach 65. However, the Government has this week announced its intention to scrap the Default Retirement Age by 1st October 2011.
While the plans are likely to be welcomed by older workers, IntaPeople believes that the change will have a significant impact on the fortunes of young job seekers. Director Stephen Riley commented:
On the one side, the change is very positive as it puts choice back into the hands of older employees. On the other, it is likely to reduce job creation at a time when we have an unprecedented number of 16-24 year-olds looking for work.
A typical scenario after a senior member of staff retires is that a colleague is promoted to their position and a junior-level worker is brought on board. Any delay in this process puts additional pressure on the Government to find new ways of encouraging business growth and creating jobs for our younger population.
Default Retirement Age- REC response
Following the announcement in this years Budget that the Default Retirement Age would be phased out from April 2011, Employment Relations Minister Edward Davey has today launched a consultation on how the changes will be implemented.
Commenting on the wider labour market implications of its phasing out, Tom Hadley, the Recruitment and Employment Confederations Director of External Relations, says: The desire and in many cases, the need - to work longer has to be recognised. There are implications for succession planning within businesses and concerns have also been raised that the change could create a bottle-neck for young job-seekers.
We do not believe that this will necessarily be that case as there is no finite number of jobs. However, the fact that more people will be working longer makes it more important than ever for Government policy to drive a pro-active job creation agenda in order to enhance opportunities for workers of all ages.
Societal changes to the way we live inevitably impact on the way we work. As well as choosing to stay longer in existing roles, older workers will also want to look at new opportunities. We can also expect those not currently in employment to pursue their job-searching for longer. Professional recruiters will play a key role here by helping older job-seekers access both temporary and permanent job opportunities wherever possible.
CIPD welcomes Government plans to abolish Default Retirement Age
The Chartered Institute of Personnel and Development (CIPD) welcomes the Governments proposal to phase out the Default Retirement Age (DRA) by October 2011. This follows many years of campaigning to remove the DRA.
Dianah Worman, diversity adviser, CIPD, says: We are greatly encouraged by the new plans laid out to eradicate the DRA. Our research has shown that many employees wish to work past retirement for differing reasons and many employers are already benefiting from allowing such flexibility. With the allowed transition period of 6 months and adequate support, employers will be able to continue to benefit from retaining the knowledge, skills and experience of older workers.
The abolition of the DRA will help to encourage better management, which should bring a productivity boost for many employers. While we understand the transitional change issues surrounding the removal of the DRA for employers, we feel that a compulsory retirement age risks undermining this great stride forward. We would encourage all employers to look at the potential cost saving benefits of continued good practice and management of their older workforce.
CBI REACTS TO GOVERNMENTS PLANS TO SCRAP THE DEFAULT RETIREMENT AGE
The CBI commented on the Governments announcement today (Thursday) that the Default Retirement Age (DRA) will be phased out from April next year.
John Cridland, CBI Deputy Director-General, said:The decision to abandon the DRA leaves business with many unresolved problems, and the Governments timetable to scrap it will give companies little time to prepare.
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. 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.
For employers, these proposals could make workforce planning and providing some employment benefits, such as critical illness cover, next to impossible.
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.
TAEN: End of default retirement age a welcome first step
Commenting on the Governments announcement that it plans to scrap the default retirement age from October 2011, Chris Ball, Chief Executive of TAEN The Age and Employment Network, said:
We welcome the Governments announcement and its decision to go for total abolition of the default retirement age (DRA), rather than raising it in line with any future increases in state pension age. The whole idea that employees could be sacked simply on the basis of reaching their 65th birthday runs totally counter to the general principle of age equality.
However, this move can only be a first step. Many employers will need to adopt a totally new mindset. They will need to actively plan and assist workers to be able to go on contributing to the success of their organisations. This may mean adapting work practices and work places. It will certainly mean providing opportunities to train or re-train and to work more flexibly and, crucially, actually recruiting people in their 50s and 60s where they may not have done so in the past.
It is certainly true that this change will present a challenge for many employers. But, they should see it as an opportunity to continue to benefit from the skills, experience, wisdom and soft skills of older employees. This is much more of a win/win outcome than another burden imposed on them.