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Retirement age changes threaten SMEs, FPB claims

A SMALL business support group has hit out at plans to abolish the default retirement age.

The new Government this week said it intended to press ahead with the previous administration’s plans to remove an employer’s option to retire staff at the age of 65.

If the proposal goes ahead, businesses could be forced to start keeping on staff indefinitely in little over a year’s time.

The Forum of Private Business believes that this could prove highly damaging to thousands of small firms. Currently, there is nothing to stop an employee working on past 65, providing his or her employer agrees to it.

Many businesses are well aware of the skills and experience older workers provide and are happy to maintain their employment.

However, if the default retirement age is scrapped, business owners will be forced to keep on workers past the age of 65, whether they want to or not.

This, the Forum believes, will prove a huge problem for thousands of small firms, hampering their abilities to plan for the future.

The move could also open the door to costly and painful employment tribunals, as an employers’ only means of ending employment will be through a ‘capability dismissal’ based on the declining competence of the worker.

In recent survey, just 4% of Forum members felt removing the default retirement age was justifiable. Forum spokesman Chris Gorman said: “Many small businesses are happy to keep on members of staff well into their late 60s and 70s – indeed, many Forum members themselves are well over 65.

“However, removal of the default retirement age will cripple some small businesses by removing the tools that help them to plan for the future.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .