Compulsory retirement age axed

The Government's decision to phase out compulsory retirement could lead to more employment tribunals, the Federation of Small Businesses (FSB) has warned.

Compulsory retirement at 65 is to be phased out between 6 April and 1 October.

The last day employees can be made to retire using the Default Retirement Age (DRA) will be 30 September, so the last day to provide the six months' notice required is 30 March.

Employers can still use the DRA between 30 March and 6 April, but will have to use the 'short notice provisions'. Under this, an employee could claim compensation, subject to a maximum of eight weeks' wages.

Between 6 April and 30 September, only people who were notified before 6 April, and whose retirement date is before 1 October, can be compulsorily retired.

FSB national chairman John Walker said he's "disappointed" by the change, saying the default retirement age is "extremely useful for those small businesses that need it and it can stimulate discussions on future career plans and retirement".

"This will also add to the fears of more employment tribunals if an employer does need to dismiss an underperforming a member of staff.

"The FSB is urging the Government instead to raise the default retirement age in line with increases to the state pension age to take into account an ageing population."

But Association of Licensed Multiple Retailers strategic affairs director Kate Nicholls welcomed the changes.

"It's very strange to force people out of a job if they are healthy and still able to do the job, and especially if neither the employer or employee wants to.

"The older generation can be very valuable, especially in the pub trade because of their ability to relate to older customers. As people are living longer, I think it makes sense."