Post on 29-Dec-2015
Financial Concerns
• Exacerbated by economic downturn – employees “remain in work or lose home”
• Bolster pension provision – funds not performing as well as expected.
Financial Concerns
• Impact of “career break” (maternity, paternity, etc)
• Defined Contribution Pension schemes – rate determined by the date of 65th birthday
Insecurity of Employment
• Remaining in work after 65 often means less favourable treatment
• Uncertainty about period of continual employment
Insecurity of Employment
• DRA substitute for good management practice
• Reliance on DRA rather than using established/statutory collective or individual redundancy procedures
Lack of Flexibility
• Employees in some sectors struggling to stay in work
• No desire to remain in low paid, undervalued work
Lack of Flexibility
• DRA drives out talent, lowers staff morale, drives up recruitment costs and compromises customer satisfaction
• Places stress on families
Right to Request
• Weak provision
• Procedure burdensome – no obligation on employer to assess employee capability or give reason for refusal
Right to Request
• Those notified under the procedure often miss out on training and promotion procedures
• Can be useful tool for employers wishing to cut jobs
• Of 2m workers classified as “economically active” the majority are over 50
• Cabinet Office research (2000) indicates 40% men and 20% women left work earlier than they had expected
Recent Trends
Recent Trends
• 2008 CBI employment trends survey suggested one third employees were asking to stay on
• Their 2009 survey reflects a growing desire among employers to adopt more flexible working arrangements
Union Negotiating Achievements Civil Service
• March 2008 new flexible retirement scheme adopted
• Encourages older workers to reduce working week as prelude to retirement
Civil Service
• Reduction in salary income 20% but can access all or part of pension and receive Lump sum accrued to date
• Take up had been significant both for these over and under 65 (several thousand)
Civil Service
• October 2008 Cabinet Secretary announced removal of DRA for CS employees from April 2010 (October 09 for senior civil servants)
Public Sector - NHS
• NHS pension scheme subject of major review
• New scheme open to existing members (who transfer) and all new joiners
Public Sector - NHS
• Scheme provides for “career end” flexibility including
• continue in work and draw down part of pension
• continue to build pension rights (by paying contributions to age 75)
Public Sector – NHS
• Increased pensions for late retirements
• Increased options, ie, reduced hours in lead-up to retirement
Maritime Sector - Officers
• Until recently routine “retirement” dismissal of employees ages 65
• Employers concerned about “setting a precedent” if they granted requests to stay on
Maritime Sector - Officers
• Union intervention in specific cases (on appeal) has been successful – tendency now for employers to strike balance between individual’s capabilities, qualifications and business consideration before applying DRA
• Still some uncertainty around post-65 dismissal procedures
Retail Sector
• Industry attracts older workers – average 18 year old at Tescos stays 6 months; average 60 year old stays 5 years
• Tesco (and USDAW) operate fully flexible retirement policies
Retail Sector
• Leads to fewer leavers – reduced recruitment costs – better staff morale
• Retained skills leads to better customer service and satisfaction – business case
TUC Position
• DRA hinders employees’ ability to combine work with domestic and other responsibilities
• But improving opportunities for older workers not just about removing DRA (or other contractual RAs)