Liverpool Chamber Reaction To Changes To Default Retirement Age

Phasing out Default Retirement Age restricts employers' ability to manage workforce

Following the announcement of the Government plans to remove an employer's option to retire staff at the age of 65, Jack Stopforth, CEO of Liverpool Chamber of Commerce, said: "The government has pledged to reduce the burden of employment law, but at the same time it is proposing to restrict businesses' ability to manage their workforce by phasing out the Default Retirement Age.

"Many small and medium-sized firms value the Default Retirement Age as it triggers a conversation about an employee's future and provides both sides with an opportunity to plan.

"Scrapping the default retirement age will be problematic for small and medium sized businesses that make up the majority of the Liverpool business community. While many companies appreciate the skills and experience of older workers, they also value the freedom to manage their workforce. If the default retirement age is scrapped, business owners will be forced to keep on workers whether they want to or not. For some employees there will eventually come a time when the needs of the business will have to be considered.

"The legislation, due to come into force in October 2011 could bring a wave of costly and painful employment tribunals, as an employers' only means of ending employment will be through a 'capability dismissal'."

Jack continued: ""Employers agree that the Default Retirement Age is currently too low and needs to rise for both economic and demographic reasons. However, if ministers want to make a positive change, they should either raise the Default Retirement Age in line with the state pension age, or offer employers a new dismissal route that helps businesses manage their workforce more effectively, regardless of age."