CBI - 'Government must not scrap retirement age'

Monday, 3 November 2003 12:00 AM

Employers are warning that plans to scrap the state retirement age could lead to a 'costly surge' in the number of employment tribunal cases.

The Confederation of British Industry's (CBI's) director-general, Digby Jones issued the warning as Ministers are considering scrapping the current retirement age of 65 as part of a package of proposals on age discrimination.

The CBI is concerned that giving employees the unilateral right to stay in employment after 65-years-old would mean that employers would have to asses an employee's capability of doing a job.

Mr Jones argues that the process could leave employees feeling uncomfortable.

Mr Jones commented: 'Both employers and employees need flexibility to reach a consensus on retirement. Neither party should have to maintain an employment relationship longer than they want to. The world of work has changed and everyone needs choice.'

The CBI points out that the UK already has the highest participation of older workers in the EU and removing the normal retirement age would go far beyond the retirement arrangements of many European countries.

The CBI's director-general claimed that the introduction of age discrimination laws in 2006 would increase the amount of industrial tribunals. The removal of the current retirement age would only serve to 'exasperate' the problem.

Digby Jones argued that employment tribunals already cost businesses £163 million each year and research in the US shows that 50 per cent of age discrimination claims fail to produce any evidence of company wrong-doing.

Mr Jones added: 'Age discrimination is more difficult to define than other forms of discrimination and the government must not fan the flames of the compensation culture with unclear or unworkable legislation. A surge of employment tribunal cases will cost companies dear, hit smaller firms especially and end up harming the employment prospects of the very people that need protection.'

The CBI also called on the Government to exclude occupational pension schemes from claims of age discrimination, as the failure to do so could result in firms reducing pension benefits in an attempt to avoid potentially huge increases in pension costs.

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