Scrapping the "default retirement age" is another nail in the coffin of freedom of contract

Prof Philip Booth writes for ConservativeHome

Another nail was hammered in the coffin of freedom of contract today when the Government confirmed that it was scrapping what it calls the "default retirement age". The "default retirement age" allowed employers and employees to freely agree a retirement age as long as that age was not below 65.

The idea that employers and employees should be allowed to sign contracts of employment with agreed retirement ages written into them is regarded by the coalition as a relic of the days when contracts of employment were free agreements between employers and employees. The late twentieth century saw contracts of employment being written by governments, with jobs having some kind of property right entitlement to those who are lucky enough to have them.

The concept of the freely-agreed retirement age has been undermined over the last few years and will now be scrapped. Once you have hired somebody, you are stuck with them for life unless you go through complex procedures of dismissal (by showing the employee is no longer capable) or redundancy. Any dismissal on grounds of incapability will be very vulnerable to tribunal challenge on grounds of age discrimination. Firms with large HR bureaucracies might be able to manage these processes – though at the expense of such bureaucracies becoming still larger and more powerful – but smaller firms, as ever, will bear a greater proportionate burden. It will be a nice earner for employment lawyers too.

Read the rest of the article on the ConservativeHome website.

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