In another move to keep tax revenue pouring in, the UK government has announced that the Default Retirement Age (DRA) is to be scrapped in the year 2011.
Businesses will no longer be able to ‘retire’ workers once they reach 65, something that is allowed under the current Default Retirement Age rules.
Government Ministers claim the decision will end ageist “discrimination”, and allow older people more choice over their lives, lives that are going on for longer than ever before.
Employment Relations Minister Ed Davey said: “With more and more people wanting to extend their working lives we should not stop them just because they have reached a particular age. We want to give individuals greater choice and are moving swiftly to end discrimination of this kind. Older workers bring with them a wealth of talent and experience as employees and entrepreneurs. They have a vital contribution to make to our economic recovery and long term prosperity.”
However, some people feel that scrapping the DRA could bring about a host of problems. John Cridland, Deputy Director-General at the Confederation of British Industry expressed concerns: “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.
“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.”
The DRA was introduced in 2006 by the then Labour Government and it allowed employers to lay off anyone over the age of 65 for no other reason except age. When the Coalition Government came into power earlier this year, they announced in their Budget that the DRA would be swiftly outlawed.
The DRA will begin to be phased out from April 2011, and will be made illegal in October 2011.