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In recognition of the increase in life expectancy which we all know will have a serious effect on the UK economy – people will draw retirement benefit for longer and will need more health care for example – the government has proposed to abolish the Default Retirement Age (“DRA”) of 65. On the surface there is logic in this but there are some serious potential problems which seem not to have been thought through.

The fact is that if the DRA is abolished, employers will be forced to dismiss staff if they want to remove underperformers over the age of 65. Whilst many over 65’s or even over 75’s are capable of continuing in work many are not and indeed there will also be differences in various employments. An office worker might be able to work longer than a bricklayer for example.

If employers have to go through a dismissal procedure this will inevitably lead  to many people’s careers ending in an undignified manner with claims for unfair dismissal causing stress for all parties not to mention the cost in time and money for the employer. Small businesses seldom have their own HR department without whose management of dismissals they can open themselves up to substantial financial penalties. To avoid the cost of outsourced specialists they may feel under pressure to live with underperforming staff aged over 65. This would have a damaging effect on business performance and deny promotion opportunities to younger or better performing staff.

The Government wants people to work longer, but bigger firms with their own HR departments might take a view that they should seek to remove underperforming older workers before they reach 65 so reducing their working lives which is the exact opposite of what the government wants and needs to do.

Time for a rethink!

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