Businesses across Yorkshire fear losing their best young staff unless the Government reintroduces a default retirement age, says a new study by Sheffield-based national law firm Irwin Mitchell.
Just over half the firms surveyed by the firm’s employment and pensions group said they wanted the right to retire staff automatically once they had reached a certain age – which three quarters thought ought to be between 61 and 65.
The right for a company to automatically retire staff at a set age was abolished 18 months ago, although employers still had the option to introduce their own retirement age if they were able to legally justify it.
Although most firms took the low risk route and removed the default retirement age (DRA) from their employment contracts, some could still be vulnerable to age discrimination claims, depending on whether and how they manage the performance of their staff, says Irwin Mitchell.
However, fewer than one in a hundred firms think they might face claims.
Irwin Mitchell’s national head of employment, Tom Flanagan, pictured right, said: “Now that the DRA has been abolished, the way in which a company performance manages its staff has become highly relevant – particularly in relation to the threat of age discrimination claims.
“There is a clear argument that if a business cannot retire staff at a certain age, it could potentially be accused of unlawful age discrimination if it uses a performance management process more rigorously simply to ‘manage out’ older employees
“Given the number of businesses who do not have a performance management process and those which treat older employees differently, the low expectation of age discrimination claims that our survey revealed could indicate that some businesses are not thinking the issues through fully.”
Irwin Mitchell found that one in five firms do not currently have a performance management process. Of those that do have a performance management process, one in 16 said they did not apply it to all staff and one in 25 had a different process for older staff.