Mandatory retirement age and age discrimination
| DOI | https://doi.org/10.1108/01425450410511061 |
| Pages | 151-166 |
| Date | 01 April 2004 |
| Published date | 01 April 2004 |
| Author | Malcolm Sargeant |
| Subject Matter | HR & organizational behaviour |
Mandatory retirement age and
age discrimination
Malcolm Sargeant
Middlesex University, London, UK
Keywords Retirement, Age discrimination, Pensions, Equality
Abstract This article considers the issues raised by the proposed abolition of the mandatory
retirement age as a result of the Equal Treatment Directive, 2000/78/EC, and of proposed Age
Discrimination in Employment Regulations. It argues that there are a number of distinctive
retirement ages, namely, the contractual retirement age, the pensionable retirement age and the
actual or normal retirement age. These may coincide or they may occur at different times, but it is
only the contractual retirement age that is likely to be abolished by the Regulations. Their effect
upon the retirement age will therefore be limited. As part of the research for this article a number
of TUC affiliated trade unions were interviewed in order to gain an employee perspective of the
issues surrounding the abolition of mandatory retirement ages.
Introduction
Article 1 of the Equal Treatment in Employment and Occupation Directive
(Official Journal of the European Communities, 2000) provides that the
Directive’s purpose is to lay down a general framework for combating
discrimination in relation to a number of grounds including that of age. This is
to be, according to Article 3, in relation to conditions for access to employment,
access to vocational training, employment and working conditions and
membership of employers’ or workers’ organisations.
The Directive was due to be transposed into national law by December 2003,
but there was a provision, in Article 18, for member states to have an additional
period of three years. Not surprisingly, the UK took advantage of this
flexibility, and plans to transpose the Directive by 2006. The Government’s
plans are to have a period of consultation leading to regulations being in place
by the end of 2004 and coming into effect by December 2006 (the DTI has an
Age Discrimination Unit working on its proposals).
This article explores the issues raised by the prospect of legislation on age
discrimination in employment, in respect of the potential abolition of
mandatory retirement ages. As part of this consideration eight TUC affiliated
trade unions were interviewed, in November/December 2002, about issues
related to age discrimination and mandatory retirement ages[1]. Others have
carried out more structured surveys on trade union attitudes towards the state
pension age. Duncan et al. (2000) c oncluded that four elements had
characterised union policy towards the state pension age for much of the
post-war period. These were that:
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Mandatory
retirement age
151
Received March 2003
Revised July 2003
Accepted August 2003
Employee Relations
Vol. 26 No. 2, 2004
pp. 151-166
qEmerald Group Publishing Limited
0142-5455
DOI 10.1108/01425450410511061
(1) retirement is seen as a release from dependence on employment;
(2) there is the notion that retirement is seen as a reward for work, so that it
should take place at the earliest opportunity;
(3) early retirement can enhance job prospects and conditions for younger
workers; and
(4) people must retire to receive their pension for fear that employers will
use the pension to reduce and subsidise wages.
At the time of the interviews the trade unions interviewed here had done little
work on the subject of age discrimination. At all the interviews the union
representatives were asked about the normal retirement age for their members;
whether age discrimination was an issue for their members; what initiatives
they had undertaken with regard to age discrimination and
pensions/retirement issues; and what issues did the potential abolition of
retirement ages have for their members[2]. None of the Duncan et al. (2000)
conclusions, however, were expressed during the interviews and there seemed
to be an acceptance now that a mandatory retirement age was an example of
age discrimination in practice and that it was likely to be abolished in
forthcoming legislation.
The key issue argued here is that the Age Discrimination Regulations are
likely only to affect the contractual retirement age. There are other factors that
affect the actual age at which people retire. The most important of these is the
financial position of the retiree. It is argued here that the availability of
adequate pensions at a certain age or the availability of state benefits to those
who retire through sickness or disability are just as important factors, for
many, in the decision to retire as is the contractual retirement age. The purpose
of the interviews with the trade unions was to gather information from the
perspective of workers’ representatives as to whether this argument could be
supported.
Age discrimination
Part of the motivation for the Government and the European Union (EU) in
acting to end age discrimination and re-considering the mandatory retirement
age are demographic trends, resulting in an ageing population. Two results of
this are likely to be skills shortages as large numbers of experienced people
retire and an increase in the length of time that people will live in retirement.
The total number of persons in receipt of a retirement pension, at September
2001, was just over 11.1 million, of whom some 7 million were women[3]. In
1960, for example, a man aged 65 years could expect to live for another 12
years. In 2002 this expectation had risen to 16 years (DWP, 2002). There were
examples given by trade unions, e.g. in the print industry and the prison
service, in this study, of skills shortages which encouraged employers to allow
experienced employees to continue working after their normal retirement age.
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