CBI wants a smoother run to retirement

THE Confederation of British Industry has called on government to answer businesses’ concerns over scrapping the UK’s default retirement age of 65.

Businesses fear the plans will force them to “retire” employees through performance-based dismissal – a long and demoralising process that could cause tribunal claims to soar.

The CBI has proposed five changes to plans to abolish default retirement age from April 2011 – the first being to delay the decision by a year.

John Cridland, CBI director-general designate, said scrapping the retirement age so soon would create a “legislative void.”

While employers understood the need for people to work for longer, “working beyond 65 is not going to be possible for everyone,” he said. “We need to modernise our employment law framework to ensure that it is fit for purpose.”

The CBI proposes simplifying performance management and unfair dismissal laws; giving employers more advice on their right to impose their own retirement age; and allowing employers to stop offering occupational benefits once employees pass the state pension age.

It is concerned at the lack of guidance from the department for Business, Innovation and Skills, which is overseeing the change.

The CBI’s submission to the government emphasises the difficulty of ending employees’ careers without a default age. “Many firms reserve the DRA for situations where they want to provide a dignified exit for older employees whose performance has started to wane. Without the DRA, the end of a career risks becoming a year-long workplace dispute,” it said.