New Retirement Rules Set To Increase Pressure On ‘Overheated’ Tribunal System – Warns Survey

Law Firm Reveals Research

31.03.2011

ACCORDING to a survey by law firm Irwin Mitchell, over half (57%) of businesses believe the imminent scrapping of the default retirement age (DRA) will lead to an increase in the number of tribunal claims over the next 12 months – despite attempts by the Government to ease the pressure on the Tribunal system. 

According to a study, which questioned bosses at 141 companies across the UK, almost half (49%) of businesses thought new DRA legislation had been introduced too quickly, with six out of ten stating the Government had not communicated the changes effectively to the business community.

The Coalition Government confirmed back in January 2011 that it was going ahead with Labour’s plans to abolish the default retirement age.  From 6 April 2011, statutory retirement procedures will not apply and employers will need to objectively justify the retirement of an employee once they reach the age of 65, or rely upon one of the other potentially fair reasons for dismissal.

John Hayes, employment Partner at the London office of national law firm, Irwin Mitchell, commented: “Whilst the removal of the statutory retirement procedures will relieve an administrative burden on employers, a failure to act reasonably and fairly could leave employers open to claims on the grounds of both age discrimination and unfair dismissal. Employers are right to be concerned and undoubtedly should tread carefully.”

The survey also revealed significant concerns in relation to other employment ‘red tape’ with 40% stating that forthcoming legislative changes in relation to the Equality Act and paternity laws will have a negative impact on their company.

65% of businesses claimed that they were concerned that there would be an increase in the number of employment tribunals in 2011 compared to 2010.

According to the latest national statistics, last year there was a 56% increase in the number of employment tribunals in the UK compared to the previous 12 months, although this statistic is skewed somewhat by multi claimant equal pay claims. Earlier this year the Government announced a set of measures aimed at reducing this figure which included the introduction of a compulsory reference to ACAS, an increase to the qualifying period for an employee bringing a claim for unfair dismissal and also a ‘filing fee’ to be paid by the claimant.

Irwin Mitchell’s survey found that 76% of business leaders said they would support proposed plans to introduce a fee for employment tribunals in order to try to eliminate frivolous and vexatious claims.

Tom Flanagan, national employment head of Irwin Mitchell, adds: “The abolition of the default retirement age is just one of numerous pieces of significant employment law being introduced this year. The Government has announced a set of proposed measures designed to tackle the UK’s ‘overheated’ tribunal system. It will be interesting to see what the impact of some of these ideas will be, but for the time being it seems employers are unconvinced and still very concerned about the impact of more red tape.”