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| DRA 'should make employers consider redundancy plans' |
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| Latest Recruitment News - HR and Recruitment Legislation News |
| Written by DirectNews Feed |
| Friday, 13 August 2010 00:00 |
 Employers in the City of London and throughout the rest of the country should no longer consider retirement to be a viable solution to the problem of poor worker performance due to the forthcoming end of the default retirement age (DRA).That is according to Helen Barnes, principal research fellow at the Institute for Employment Studies (IES), who has stated that the option of making someone redundant on the basis of their age when their performance has not been up to scratch is now outdated. The Conservative-Liberal Democrat alliance recently announced plans to scrap the DRA - which currently allows employers to enforce retirement on any worker, regardless of their personal circumstances, when they reach the age of 65 - as of October 2011. This measure is to be preceded by a six-month period of phasing the legislation out gradually as of next April, meaning that companies in all sectors - including finance jobs in London - may be forced to review their internal policies with regards to redundancy. Government ministers have said that this new system should improve flexibility and will allow workers to take more control of their lives through being able to decide themselves when they quit work. Ms Barnes explained of employers: "Historically, if they've had someone whose performance hasn't been that great but who has been there a long time and was coming up to retirement, they have retired out their problems." The expert's comments came after the publication of data from human resources company Croner earlier this week (August 10th), which found that confusion among bosses over the effects of the DRA is rife across the nation. Corner's research found that there has been a 56 per cent rise in the amount of phone calls to its helpline about the DRA from business leaders who are unsure over how the policy will influence the internal workings of their organisation. Liz Iles, senior employment consultant at Croner, explained that the onus will be placed on employers to prove whether their staff are capable of continuing to work in their current role after they pass the previous DRA threshold of 65 years of age. She went on to state that employers often seek to avoid dismissals on the grounds of someone's ability being in a stage of gradual decline, particularly older members of their workforce. And Ms Barnes has said that the concern among many bosses about the DRA is based around the fact that they "don't do performance management very well". The IES official concluded that organisations that have the capacity and knowledge to "completely separate the idea of performance management and the idea of retirement" will be the ones that cope best with the ending of the DRA. Posted by Mary King 
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