From 1st October, having been phased out since April, the default retirement age of 65 has now been fully abolished.
The Employment Equality Regulations 2011 means it is no longer legal for employers to force employees to finish work at age 65. Employers can still force retirement; however it must be based on other factors, age on its own is not enough.
Despite the new legislation research from law firm Norton Rose shows that one in 10 firms will still offer financial incentives or ‘golden goodbyes’ for employees who leave their position at a certain age.
Paul Griffin, an employment lawyer with Norton Rose, said: “Our survey suggests employers feel there will be limited ability to take on younger workers as a result of the default retirement age being removed and their perceived inability to ask more senior levels of staff to move on.”
He continued: “If firms are approaching people to retire that could be seen as age discrimination in its own right.”
“But our survey indicates that firms are willing to pay to encourage people to move on at a certain time in their career.”
Benefits of older workers
Age UK welcomed the legislation saying that employers should look past a culture of ageism and focus on the benefits that an older workforce brings.
Christopher Brooks, head of policy for work and learning at Age UK, said: “Many employers simply see the stereotypes of an older worker, particularly in the recruitment phase and statistics show older workers find it harder to find another job than any other age group,” he said.
He continued: “Discrimination in the recruitment process is against the law, but it still happens in practice quite a lot.”
“It is however quite hard to prove but we do get lots of feedback from people who have been in interviews and been told they are over qualified or just too old to do the job, which quite often amounts to age discrimination.”
However not everyone is in favour of the new legislation, The Federation of Small Businesses (FSB) said that the new laws were “unnecessary meddling”.
Andrew Cave, from the FSB, said: “It will lead to a legal quagmire for a lot of small business owners. If you can’t get rid of someone, you then have to go through the process of performance managing someone out of an organisation, which if you have a big HR department and you’re experienced in these things is easy.”
He continued: “The average business in this country employs four people. The owner-manager doesn’t necessarily have that expertise.”
Minimum wage and agency workers
On the same day the minimum wage has also increased by 15p for adults over the age of 21 to £6.08 per hour.
The rate for those aged 18 to 21, known as the ‘development rate’ rises by 6p to £4.98 per hour and those aged 16 or 17 get a 4p per hour rise to £3.68.
Agency workers will also benefit from new legislation meaning that they will be entitled to better sick pay and holiday provision from 1st October onwards.