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Businesses must prepare for retirement age changes, says legal expert

A local lawyer is encouraging employers to ensure they have effective strategies in place to respond to changes in the retirement age, which come into place next month.

As of 1 October 2011, it will be unlawful for businesses to dismiss employees on the grounds of retirement. While this falls into line with increase in life expectancy, it also could have profound implications for the way businesses are managed.

Andrew Browning, a solicitor at Thomas Eggar believes that the government’s decision is understandable as many people may not be able to afford to retire, but consequently also means that retirement cannot be used to dismiss underperforming employees.

He commented: “Employers find it difficult to dismiss employees on the grounds of capability as it can be a long and painful process.

“It is also the case that younger employees, who would have previously relied on retirements to create openings for promotions may find their efforts to progress due to older colleagues remaining.

He is now calling for employers to ensure they positively work to retain and motivate younger staff.

Andrew added: “ The removal of the retirement age means that employers need to ensure that they have effective performance management procedures in place and they will also have to develop structures and incentives that will motivate young employees to stay with them.“

This was posted in Bdaily's Members' News section by Ruth Mitchell .