Survey of 307 employers, which has found that nearly half (47 percent) of employers who responded would like the Default Retirement Age (DRA) reinstated.

The study also revealed the following key findings about the organisations that took part: Fewer than three percent of the organisations now have a policy of mandatory retirement for their employees (compared with 69 percent of those who took part in a similar study by Eversheds two years ago); More than half (56 percent) say the repeal of the DRA has led to an increase in the number of employees staying on beyond age 65 or normal pension age; A third (34 percent) feel the abolition of the DRA has had a negative or very negative impact on their organisation. Two years ago, on 6 April 2011, the Government changed the law to start phasing out the DRA. This means that now an employer has to justify any decision to retire someone against their wishes to avoid falling foul of age discrimination and unfair dismissal laws. The most striking point revealed by the study is just how few of the organisations who took part now operate a mandatory retirement age. Only nine of the 307 people who responded to the study say their organisation has a policy of mandatory retirement.

The overwhelming majority (97 percent) say their organisation no longer operates a mandatory retirement age. Professor Owen Warnock, partner at Eversheds comments: “It is clear that, for most of those who took part in the study, it was the Government’s decision to phase out the DRA that provided the impetus for change: 72 percent of those who respondents said they would still be operating a mandatory retirement age if the law had not been changed. “This is consistent with the results of a survey we carried out two years ago, just before the DRA started being phased out. Back then a significant majority (69 percent) of respondents still had a policy of mandatory retirement for some or all of their workforce subject to an employee’s right to ask to stay longer.” Many of the respondents reported that the change in the law has had negative effects for their organisation: two-thirds cited difficulties in succession planning whilst just under half reported that opportunities were being blocked for younger workers.

Other implications included increased costs of redundancies and/or providing benefits (37 percent), more management time having to be spent on performance management (29 percent), whilst just over a fifth reported an increase in ill-health absence. Owen Warnock continued: “The results do show that there have been some positive consequences. With fewer employees being forced to leave at a fixed age, a third of those who replied say the law changing has resulted in improvements in retaining important skills and knowledge within their organisation. There have also been savings on recruitment and training costs for 17 percent of respondents, whilst 22 percent reported savings in time spent dealing with retirement procedures. What’s more, the much-feared increased in age-related retirement claims, has not, according to the survey respondents, in fact materialised.”

Owen Warnock concludes: “More than a third of those who responded feel that the abolition of the DRA has had a negative or very negative impact on their organisation. Only around one in seven feel that, overall, the change has been positive or very positive. “Perhaps most interesting, however, is the finding that half of those who replied feel that the abolition of the DRA has made no real difference to their organisation. A significant proportion of this group is accounted for by organisations that say they would not have a mandatory retirement policy even if the DRA had not been abolished. In addition a handful of those who took part say it is too early to assess the impact of the change.

“The 43 percent of those who took part who say they do not want the DRA to be reinstated are marginally outnumbered by the 48 percent who would like to go back to the old law. That latter group are probably simply being pragmatic since, from the employer’s perspective, most of the beneficial consequences of this piece of legal reform could have been realised without changing the law, all employers had to do was to keep older employers on if they were doing a good job. “The chances of the DRA being reinstated under the present Government are slim, especially as its abolition was one of the very first employment law changes agreed by the coalition partners. Nor would a change in Government at the next election be likely to result in a revised approach given that reintroducing the DRA could be seen as undermining older workers’ ability to remain in the workforce at a time when it appears to have been widely accepted that people will generally have to continue working until later in life due to changing demographics, longer life expectancy and cost of funding pensions.