Business leaders have urged the Government to delay planned changes to the retirement age, warning that firms faced “huge uncertainty” and greater risk of tribunal claims if they went ahead.
The CBI said scrapping the so-called default retirement age (DRA) from next April would create “unintended consequences”, pleading for more “legal clarity”.
From next year, employers will not be allowed to dismiss staff because they reach the age of 65, but the CBI said the rules around retirement would become less clear for employers and their staff.
John Cridland, the CBI’s director-general designate, said: “The ageing population and the shortfall in pension savings make it inevitable that people will want to continue working for longer. Employers understand this, and businesses value the skills, experience and loyalty that older workers bring.
“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.
“With the scrapping of the DRA in April, a legislative void is opening up. We need to modernise our employment law framework to ensure that it is fit for purpose.
“In the majority of cases this will not be an issue, but in a minority it will be a serious problem for all concerned.
“The Government needs to act fast, and there should be no changes to the retirement framework until these issues are resolved.”
The CBI called for the planned change to be delayed for a year and for the law on unfair dismissal to be made simpler.
The business group added that the state pension age should be used as a “milestone” after which employers would no longer have to offer occupational benefits.
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