Mandatory retirement and the dignity canard

What to do about mandatory retirement is the single most important equal opportunities issue facing the government today.

Disagreement between the two sponsoring departments, the Department of Trade and Industry and the Department for Work and Pensions, is widely reported over whether age discrimination legislation should allow employers to retain a mandatory retirement age.

The minister of state for pensions, Malcolm Wicks, recently told People Management that a compulsory retirement age made "no sense" and that a productive member of staff being retired because they had reached age 60 or 65 was "ridiculous". On the other hand, the secretary of state for trade and industry, Patricia Hewitt, is reported as leaning towards imposing a mandatory retirement age in response to employer concerns. If that is right, Ms Hewitt should think again.

A nationwide default retirement age, allowing employees to be forced out of their job, regardless of their personal circumstances, because they have reached a certain age, is entirely inconsistent with eliminating arbitrary age discrimination. Not only does it negate the principle that age should not normally be taken into account in making employment decisions, it will also undermine the effectiveness of the legislation. Employers will be able to deny older workers job opportunities because they are approaching the mandatory retirement age, so there will be insufficient "return on investment".

If a mandatory retirement age is imposed, employers will continue to have the freedom to dispense with an employee who reaches that age without having good grounds. Not surprisingly, the more sophisticated employers do not put the case for a mandatory retirement age in such terms. Instead, the view is being put forward that a compulsory retirement age is necessary to protect the dignity of older workers. Thus, writing in Personnel Today, David Yeandle, director of employment policy at the EEF, says: "Our members strongly feel there should be a retirement age of 65 to avoid some long-serving staff facing an undignified departure if their performance gradually deteriorated towards the end of their career. It has been argued that performance appraisal systems could facilitate this process and avoid unfair dismissal claims. But there is a danger that this could be seen as a tool to justify dismissals, rather than a constructive mechanism for improving employee performance." Similar views have been put forward by the CBI in support of a default retirement age of 65.

We should always be suspicious of arguments that people should not be given new rights because it will really operate to their disadvantage. Equal opportunities advocates know that these arguments have been used by employer groups ever since women were told that equal pay legislation would price them out of jobs.

The loss-of-dignity thesis neither stands up in principle or in practice. It is undoubtedly hurtful to be dismissed for poor performance, although the knowledge that you would have a right to challenge that dismissal in an employment tribunal, both as regards its fairness and its non-discriminatory character, would provide some comfort. The loss of dignity from being dismissed for cause has to be weighed against the loss of dignity of being thrown out of a job before you are ready and willing. It is well established that premature retirement followed by unemployment can result in grave psychological damage. It can also inflict economic damage, and there is little dignity in poverty. Far more older people will lose their jobs through a mandatory retirement age than would do so because of poor performance if there is no mandatory retirement age allowed or if an employer has to justify a mandatory retirement age for particular employees.

The loss-of-dignity scenario put forward by employer groups conjures up the image of large numbers of workers aged 65+, whose competence has declined through age, suffering the humiliation of being called into the HR manager's office and told that they are in danger of being dismissed for poor performance. Such predictions are based on a fallacy. Experience in countries that have abolished mandatory retirement teaches us that there will continue to be a "normal" retirement age without mandatory retirement. Most employees will retire voluntarily when they can afford to. That means that they will retire at the minimum age at which they are entitled to a full pension. Abolishing mandatory retirement will not change this, or require employees to "work until they drop" - the other canard being put forward to justify retention of employer discretion.

It is an offensive stereotype to suggest that there will be a problem due to older employees failing to meet standards of competence. Even in those cases where performance declines below acceptable standards, the dignity argument implies that many workers who are losing their ability will want to continue working. It is more likely that they will be the first to notice that their performance has deteriorated and will retire voluntarily.

If mandatory retirement is abolished, voluntary retirement will assume much greater importance. If the government wishes to take steps to protect the dignity of older workers, it should facilitate this in the age discrimination legislation by allowing employers to encourage - but not require - older workers to accept a voluntary retirement package.