Despite the government’s recent announcement to abolish the Default Retirement Age of 65 from April 2011, 46% of employers surveyed* believe that it would be preferable for their organisation to have the DRA, reveals Ashurst, the international law firm.
Furthermore, only 5% of professionals believe the removal of the DRA will improve efficiency and 73% believe they will need to redesign their career and pay structures so as to accommodate older staff remaining in employment for a longer and unknown period of time.
Despite this, 61% believe having no DRA will not exacerbate potential social and other divisions in the workforce between older and younger employees.
The research shows that the biggest concern amongst professionals is around handling the termination of employment of older employees (85% believe this will cause problems), followed by difficulties with succession planning (54%):
Caroline Carter, head of the employment, incentives and pensions practice at Ashurst stated: “With the government’s consultation on the DRA closing today, many difficult issues are being raised for employers. One large concern for them is regarding dismissing under-performing older employees on capability grounds as this could give rise to allegations of age discrimination and tribunal claims.
In fact, pending clarification from the government, how to manage any potential termination conversation with an older employee could be problematic. In the same way as an employer is warned about sex discrimination claims if it asks female employees questions relating to plans to have children, asking older workers about their future retirement plans could give rise to allegations of age discrimination.”