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EFA Conference – 10 th February 2010

EFA Conference – 10 th February 2010. Sarah Veale Head Equality and Employment Rights Department. Financial Concerns. Exacerbated by economic downturn – employees “remain in work or lose home” Bolster pension provision – funds not performing as well as expected. Financial Concerns.

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EFA Conference – 10 th February 2010

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  1. EFA Conference – 10th February 2010 Sarah Veale Head Equality and Employment Rights Department

  2. Financial Concerns • Exacerbated by economic downturn – employees “remain in work or lose home” • Bolster pension provision – funds not performing as well as expected.

  3. Financial Concerns • Impact of “career break” (maternity, paternity, etc) • Defined Contribution Pension schemes – rate determined by the date of 65th birthday

  4. Insecurity of Employment • Remaining in work after 65 often means less favourable treatment • Uncertainty about period of continual employment

  5. Insecurity of Employment • DRA substitute for good management practice • Reliance on DRA rather than using established/statutory collective or individual redundancy procedures

  6. Lack of Flexibility • Employees in some sectors struggling to stay in work • No desire to remain in low paid, undervalued work

  7. Lack of Flexibility • DRA drives out talent, lowers staff morale, drives up recruitment costs and compromises customer satisfaction • Places stress on families

  8. Right to Request • Weak provision • Procedure burdensome – no obligation on employer to assess employee capability or give reason for refusal

  9. Right to Request • Those notified under the procedure often miss out on training and promotion procedures • Can be useful tool for employers wishing to cut jobs

  10. Recent Trends • Of 2m workers classified as “economically active” the majority are over 50 • Cabinet Office research (2000) indicates 40% men and 20% women left work earlier than they had expected

  11. Recent Trends • 2008 CBI employment trends survey suggested one third employees were asking to stay on • Their 2009 survey reflects a growing desire among employers to adopt more flexible working arrangements

  12. Union Negotiating Achievements Civil Service • March 2008 new flexible retirement scheme adopted • Encourages older workers to reduce working week as prelude to retirement

  13. Civil Service • Reduction in salary income 20% but can access all or part of pension and receive Lump sum accrued to date • Take up had been significant both for these over and under 65 (several thousand)

  14. Civil Service • October 2008 Cabinet Secretary announced removal of DRA for CS employees from April 2010 (October 09 for senior civil servants)

  15. Public Sector - NHS • NHS pension scheme subject of major review • New scheme open to existing members (who transfer) and all new joiners

  16. Public Sector - NHS • Scheme provides for “career end” flexibility including • continue in work and draw down part of pension • continue to build pension rights (by paying contributions to age 75)

  17. Public Sector – NHS • Increased pensions for late retirements • Increased options, ie, reduced hours in lead-up to retirement

  18. Maritime Sector - Officers • Until recently routine “retirement” dismissal of employees ages 65 • Employers concerned about “setting a precedent” if they granted requests to stay on

  19. Maritime Sector - Officers • Union intervention in specific cases (on appeal) has been successful – tendency now for employers to strike balance between individual’s capabilities, qualifications and business consideration before applying DRA • Still some uncertainty around post-65 dismissal procedures

  20. Retail Sector • Industry attracts older workers – average 18 year old at Tescos stays 6 months; average 60 year old stays 5 years • Tesco (and USDAW) operate fully flexible retirement policies

  21. Retail Sector • Leads to fewer leavers – reduced recruitment costs – better staff morale • Retained skills leads to better customer service and satisfaction – business case

  22. Other Sectors • Finance with HBOS • Retail with Co-op • Local Government with Notts County Council

  23. TUC Position • DRA hinders employees’ ability to combine work with domestic and other responsibilities • But improving opportunities for older workers not just about removing DRA (or other contractual RAs)

  24. TUC Position • No desire to see workers remain in low paid, undervalued jobs and they should not be obliged to do so • Support replacing DRA with flexible retirement schemes including secure pension arrangements for those below and over 65

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