Retirement plans could cause low employee motivation and more tribunals, CBI warns

Date: 13/12/2010

Government plans to scrap the default retirement age could result in low employee motivation and a higher number of tribunals, it has been warned.

The Confederation of British Industry (CBI) has urged the government to delay its plans for a year and issue guidance for staff to make them more aware of the new legislative framework.

The government's plans propose that employers will no longer be able to sack staff because they have reached the age of 65, unless they offer financial compensation.

But John Cridland, director-general designate at CBI, highlighted the fact that the ageing population and financial worries will mean that many more people will want to continue working, and said the situation could lead to claims of unfair dismissal.

"However, in certain jobs, especially physically-demanding ones, working beyond 65 is not going to be possible for everyone," he said.

"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 CBI's comments come after a recent survey by Aviva revealed that a third of workers felt they were forced out of work after their employer suggested it or because they had reached the normal retirement age for their firm.

Posted by Elizabeth Mewes 

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