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Employees still Productive over 65 says Croner Survey
The majority of UK businesses support the government's bid to increase the retirement age to 70, says a new survey by Croner.

With concerns being aired about the capability and productivity of older employees, Croner, the UK's leading supplier of business information, advice and support, reveals that 64% of companies believe employing people over the age of 65 does not have a negative impact on the performance of the company.

18% of today's population are over 65. By 2014, it is predicted that there will be more over 65s than under 16s, with 65 year-old men expected to live a further 17.5 years, and women a further 20.

A consultation paper published yesterday by the DTI reflects this trend and recommends the compulsory retirement age be increased to 70, giving people the right to work longer if they choose.

Most businesses conform to the compulsory statutory retirement age of 65, and people of the retirement age who are made redundant cannot currently claim unfair dismissal or statutory redundancy pay because they can claim a state pension. Croner, warns that if businesses continue to impose retirement at 65 they could end up in court for age discrimination.

Richard Smith, HR expert from Croner Consulting said, "The majority of HR professionals that we surveyed on our www.healthandsafety-centre.net  website support the older worker. We are clearly wasting one of the most knowledgeable and experienced sections of the UK workforce. Although many people are happy to retire at the statutory age, many wish to continue working. And with the older population growing year on year, and state pensions likely to be phased out, people often need to work later in life to afford their retirement."

Age discrimination is not yet unlawful in the UK, however member states of the EU must introduce new laws to combat age discrimination by 2006. Until then, the right for people to work over the mandatory retirement age will remain a grey area, illustrated by the cases of Rutherford and Bentley.

In 1998, when John Rutherford was 67 and 2001, when Samuel Bentley was 73 they were dismissed from their jobs for being past the retirement age, without statutory redundancy payments. In the absence of laws banning age discrimination, they won their case on the basis of sex discrimination. The men were disproportionately affected by the upper limit of 65 because government figures showed that significantly more men than women work beyond that age.

Richard explains: "Redundancy or capability are fair reasons for dismissal, but nowadays, employees are not necessarily redundant or incapable at the retirement age and there is no need for them to leave. If workers are willing and able there is no reason why they cannot carry on with their job. The Rutherford and Bentley cases, the first of their kind in the UK, was a huge step towards beating ageism in the workplace."

Times are changing. By 2006, when new laws on age discrimination are introduced, one-quarter of the working population will be over 50. Croner urges businesses to ensure they have clear policies and procedures over redundancy, especially concerning older employees.

Croner offers the following advice:
To bring a claim for unfair dismissal an employee needs 1 year's service
To qualify for a statutory redundancy payment an employee needs to have 2
   year's service
Redundancy is potentially a fair reason for dismissal (regardless of age)
The redundancy procedure should involve consultation with the employee to
  avoid misunderstandings, rumours, low morale and breaches of legal rights
An employee can claim unfair dismissal if he/she feels the redundancy not
  justified. In 2006 redundancy because of age will be against the law.

The poll was carried out for one week on Croner's www.humanresources-centre.net  website. The question was: "Do you think that retaining a high number of employees older than the standard retirement age of 65 has a negative impact on the performance of the company?" The full response was: Yes 16%, No 64%, Unsure 20%.

Croner's Guide to Contracts of Employment offers advice for anyone dealing with contracts of employment including terminating contracts and redundancy. Croner also offers comprehensive guides to employment law via CD-ROM, manuals, newsletters, bulletins, as well as a Business Support Helpline.