Previously published in Newsbrief, Winter 2004
The abolition of the compulsory retirement age will have several knock on effects on businesses, not least the fact that the automatic cut off age to bring a claim at a tribunal be also be abolished, although recently this upper age limit was held to be lawful.
At present employees over 65 cannot bring an unfair dismissal claim. Without an upper age limit employers can expect any claim from any employee.
The compensation payments made to employees will also be affected which may mean increased costs implications for employers. The basic award used to calculate compensation when a matter proceeds to the Tribunal is based on an age calculation as is the statutory redundancy payment. These calculations would need to be changed. This could lead to compensation payments being increased with age - not the best incentive for an employer to employ an ageing workforce.
If the compulsory age is abolished employers would be advised to tighten up their policing of under performance in the work place as they will need to ensure their older work force is able to perform their duties to the expected standard. As an employer would no longer be able to allow the employment relationship to come to a natural end by a given retirement age, under performance is likely to be the principal method by which an employer would be able to dismiss incompetent employees.
The position concerning the upper age limit of 65, to bring an unfair dismissal claim, has recently been decided as lawful. Therefore it is likely that a decision on the abolition of the retirement age will soon follow. If there is a decision by the time of our next publication we will update readers on this subject.
