CBI warning over retirement age changes

Dec 13 2010 by Henryk Zientek, Huddersfield Daily Examiner

GOVERNMENT plans to scrap the default retirement age could leave firms facing huge uncertainty and greater risk of tribunal claims, it was said today .

Employers’ body the CBI urged the Government to clarify its position on retirement rules and how it will address businesses’ concerns before the move next April.

The CBI said it was concerned about the consequences of changing retirement rules – not the principle.

It said: “The removal of the default retirement age (DRA) will be one of the biggest changes to employment law in 2011.

“The rules around retirement will be less clear for employers and their staff – and the resulting process potentially less dignified and more complicated.

“Despite announcing that the DRA will be phased out from April, the Government has not yet produced any guidance or draft regulations to clarify for employers or staff what the new legislative framework will look like.”

The CBI said that in the absence of a replacement to the DRA, the change should be delayed for a year while the law on performance management and unfair dismissal should be made “simpler and more balanced”.

John Cridland, CBI 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.”