Business groups voice opposition to 'crippling' retirement age plans

Decision could be "highly damaging"

The Forum of Private Business points out that if the proposal goes ahead, businesses could be forced to start keeping on staff indefinitely in little over a year’s time.

The organisation 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."

Decision would create inflexibility, when flexibility is what's needed

The Institute of Directors (IoD) say they "greatly regret" the Government's decision.

Commenting on the Government’s proposal to abolish the Default Retirement Age (DRA), Graeme Leach, Director of Policy at the IoD, said:

“We greatly regret the Government’s decision to abolish the DRA. We do not see how the removal of a mechanism that gives employers flexibility in managing their workforce is compatible with the Government’s stated desire to boost enterprise and de-regulate the employment arena.

“Instead of removing one of the few flexible mechanisms left to employers, the Government should be examining how it can make it easier for businesses to employ people so that jobs lost in the public sector can be replaced with jobs in the private sector.

“The Coalition agreement states that a ‘one-in, one-out’ rule will be introduced whereby no new regulation is brought in without other regulation being cut by a greater amount. So where are the announcements outlining the regulations to be cut? If the Government wants to be seen as a pro-enterprise administration it needs to address this point and explain what regulations are to be removed.”