Legal Ease

In our current system, as long as the correct retirement process is followed, employers can enforce their staff to retire at the age of 65, regardless of their circumstances and without having to pay any financial compensation.

The government announced in the budget that they intended to consult on how the DRA could be phased out from as early as April 2011.

The government is now proposing that from 6th April 2011, employers will not be able to issue any notifications for compulsory retirement using the DRA procedure. Between 6th April and 1st October 2011, only those people who were notified before 6th April 2011 and whose retirement date is before 1st October 2011, can be compulsorily retired.

The government has stated that the plans would still make it possible for certain employers to operate a compulsory redundancy scheme, if it could be justified, citing air traffic controllers and police officers as examples. However, most jobs will not fall into this category.

The consultation proposes to help employers by removing the administrative burden of the statutory retirement procedures. With the DRA removed, employers will no longer need to ask employees if they wish to work beyond retirement or for employers to give them a minimum of six months' notice of retirement.

If this proposal goes through, the challenge for employers will be when an employee is deemed at ‘retirement age’ who chooses not to retire, but is no longer performing the role at the required level. The only option will be performance management. This will require skilful management of what could potentially be a very difficult situation.

It is likely that the removal of the DRA of 65 will radically change how employers manage their workforce. We will keep you informed as this one develops.

GOVERNMENT IMPOSES A TEMPORARY IMIGRATION CAP FROM 19 JULY 2010

The Government is now consulting with employers over a permanent annual migration cap to be introduced in April 2011. To avoid an influx of applications between now and April next year, an interim measure is put into place from 19 July 2010. These interim measures include:

· A cap on the number of Tier 1 migrants at current levels and raising the number of points required by highly-skilled workers from 95 to 100.

· Limiting the number of certificates of sponsorship that licensed employers can issue to those who wish to fill skilled job vacancies. This will reduce the number of people entering through Tier 2 by 1,300. More information can be obtained from the UK Border Agency website.

Labels: GOVERNMENT PLAN TO SCRAP DEFAULT RETIREMENT AGE ON 1st OCT 2011