Leading British businesses face a legal minefield because the Government has failed to spell out properly how reforms to the official retirement age will be introduced in just four-and-a-half months' time, the Confederation of British Industry (CBI) warned today.
The employers' group said that plans to abolish the default retirement age – which allows companies to require their staff to retire at a set age, typically 65 – were being phased in from April onwards despite the Government's failure to publish details of how the new rules would work. The CBI warned that employers had not been given sufficient time to prepare for the new regime and called for a year's delay.
The demand will provoke hostility amongst trade unions and groups representing older people, which have campaigned for years for a change in the law, which currently gives legal backing to companies that compulsorily retire staff. However, the CBI said that while it did not necessarily oppose the abolition of the default retirement age, it was concerned that no detail had been given. Ministers have indicated that there will be circumstances in which certain employers might still be able to insist that staff retire, but has not spelt out the specifics.
The employers' group also argued that there was no need to rush through the introduction of the new rules, because workers are already entitled to ask to work on into old age at companies' discretion and that 80 per cent of such requests are granted. Around 740,000 people over the age of 65 are still employed in Britain, around 8 per cent of the workforce.
"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," said John Cridland, deputy director-general of the CBI, who becomes director-general in 2011.
"In the majority of cases this will not be an issue, but in a minority it will be a serious problem for all concerned. However, in certain jobs, especially physically demanding ones, working beyond 65 is not going to be possible for everyone. The default retirement age has helped staff think about when it is right to retire, and has also enabled employers to plan more confidently for the future."
Mr Cridland said that the Government could not proceed with scrapping a default retirement age with uncertainties unresolved.