Scrapping default retirement age will add to younger workers’ job woes
Thursday, July 29th, 2010 Money.
By Louisa Peacock, Jobs Editor
Published: 6:45PM BST 29 Jul 2010
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The calculate of 70-year-olds in the workplace is set to greaten following new rules.
The warning came after the Government announced it would construct it illegal to force workers to retire when they reached 65 from October 2011. Campaign groups hailed the plans a “conquest” because older workers will no longer be told to leave their jobs merely because of their age.
However, experts said the plans would produce the unintended consequence of shutting out younger workers – already disillusioned ~ the agency of the tough labour market – from job opportunities. One in five 16 to 24-year-olds are commonly unemployed.
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Jim Lister, head of employment at Pannone rule firm, said: “Businesses often rely on the retirement of older workers to remunerate more junior employees with promotion and to bring in fresh capacity. Compulsory retirement can be unwelcome, but it provides a dignified and predictable expiration to employment.
“However, now faced with the prospect of workers staying ~ward after the age of 65, many businesses will be forced to conduct more rigorous performance management procedures in order to promote as well like dispense with employees.”
Human resources directors were also concerned that scrapping the default retreat age would interfere with succession planning, making it harder to attention and promote talented staff through the organisation.
Mick Leafe, HR manager at Nottingham City Transport, said: “The difficulties that this presents in revere of resource planning and recruitment and retention policies are enormous. How are we going to allure and retain young people into the industry if those at the other extremity of scale refuse to leave? How do we develop and keep in possession talent if there is nowhere for it to go? The horde of questions that this raises is incredible.”
The Institute of Directors agreed that removing the legislation was inequitable on employers. Graeme Leach, director of policy, said: “We greatly bemoan the Government’s decision to abolish the DRA. We perform not see how the removal of a mechanism that gives employers complaisance in managing their workforce is compatible with the Government’s stated desire to boost enterprise and deregulate the employment arena.”
In difference, it made it harder for businesses to employ new people to requite for the wide scale job losses expected in the public sector, he afore~.
Employers’ groups raised a barrage of concerns over the destruction of the default retirement age. These included the continuing cost of providing benefits despite older employees, and the worry that having a conversation with older workers almost when they were likely to retire could lead to discrimination claims.
Caroline Carter, ~ off of employment at Ashurst law firm, said: “Without ‘solitude’ being able to be used as an uncontroversial way ~ the sake of older employers to leave, employers may face difficult situations, and potentially a repletion of tribunal claims, where they dismiss an underperforming older employee in successi~ capability grounds.”
Employers have previously been warned to keep track of a handicraftsman’s poor performance, regardless of their age, to be accomplished to justify dismissing them.
However, Mr Leafe said: “The sight of ‘performance managing’ people out of the business who force otherwise have retired with some grace and dignity is not taking.”
The Age and Employment Network, which represents older workers, agreed the workplace was popularly not geared up to accommodate elderly workers.
Employers would have to reflect upon training older workers in new skills to make sure they could keep on to work into their seventies, the body said.
Fact box
274,000 tribe could continue in their jobs under the new rules
In 2012 there will be 772,000 people aged 64
45pc of 60 to 64-year-olds are generally employed
21pc of these are self-employed
Source: The Age and Employment Network