Partner Article

CBI urged to delay retirement age

BUSINESS leaders have urged the government to delay planned changes to the retirement age for a year.

From April, employers will no longer be allowed to dismiss staff just because they have reached 65.

But the CBI warned firms faced “huge uncertainty” and a greater risk of unfair dismissal claims unless there was more legal clarity over the plans.

The Department for Business said it was committed to helping employers adapt and would be providing guidance.

The CBI said the law on unfair dismissal needed to be made simpler ahead of the scrapping of the so-called default retirement age (DRA).

John Cridland, the CBI’s director-general designate, said the ageing population and the shortfall in pension savings made it inevitable people would want to work for longer.

“Employers understand this, and businesses value the skills, experience and loyalty that older workers bring,” he said.

“However, in certain jobs, especially physically demanding ones, working beyond 65 is not going to be possible for everyone. The DRA has helped staff think about when it is right to retire, and has also enabled employers to plan more confidently for the future.”

He said a legislative void was opening up with the scrapping of the DRA.

“In the majority of cases this will not be an issue, but in a minority it will be a serious problem for all concerned,” he said.

We should not stop people from working just because they have reached a particular age“

“The government needs to act fast, and there should be no changes to the retirement framework until these issues are resolved.”

The CBI added the state pension age should be used as a “milestone” after which employers would no longer have to offer occupational benefits.

TUC general secretary Brendan Barber said scrapping the default retirement age was a welcome move by the government as “it cannot be right that workers lose their protection against arbitrary dismissal overnight upon reaching 65”.

But he added: “There does need to be clear guidance for employers and workers to raise awareness of the new protection from unfair dismissal and age discrimination that older workers will have.”

A Department for Business spokesman said: “We are committed to helping and supporting employers adapt to the change in regulations and will be providing them with guidance, but we should not stop people from working just because they have reached a particular age.

“Our consultation asked what kinds of support are required and we will be publishing our response shortly, but many of the 500 respondents strongly support the plan that we have set out.

“It is important to remember that the vast majority of employers already choose to operate without fixed retirement ages, and many of those employers with retirement ages already offer flexibility to work longer.”

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