Small firms slam Govt's "crippling" plan to scrap retirement age
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Small businesses have slammed the Government’s “crippling” plans to scrap the default retirement age, adding that it will open the door to costly employment tribunals.
The coalition announced today that it intended to press ahead with the previous administration’s plans to remove an employer’s option to retire staff at the age of 65, from October next year.
But the Forum of Private Business says the changes could prove “highly damaging” to thousands of small firms, impeding their ability to plan for the future.
It adds that forcing business owners to keep on workers past the age of 65 will also open the door to costly and painful employment tribunals as an employers’ only means of getting rid of older workers will be through a capability dismissal based on declining competence.
Spokesman Chris Gorman says: “We are by no means disputing the valuable skills and experience older people bring to the workplace.
“However, removal of the default retirement age will cripple some small businesses by removing the tools that help them to plan for the future.
“Most employees are certainly competent enough to work beyond the age of 65 without a significant deterioration in their abilities. However, for those employees not willing to leave voluntarily, there will eventually come a time when the needs of the business will have to be considered.
“In the absence of a default retirement age, the only viable option available to an employer is a capability dismissal based on the declining competence of the worker. We believe this would be an undignified and humiliating end to a career for most staff.”
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Readers' comments (3)
Mike Wiggins | 29 Jul 2010 5:05 pm
Alternatively, they will have to put in place a sufficiently well funded retirement savings scheme. I'm sure most 65 year olds who have the option of retiring with a reasonable lifestyle would opt to do so rather than working into later life!
And fortunately a timely solution is on the horizon with the introduction of the new national scheme being implemented from 2012. This scheme will require all employers to enrol their employees and contribute alongside the employee.
The era of earn, borrow and spend is over, now it will be work and save, or simply work and work!
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Bill Wells | 29 Jul 2010 5:50 pm
The only reason the government is scrapping compulsory retirement ages is to be able to push bach the age at which State pension becomes payable further and further.
Firms should be able to get rid of older people at the point when that person is able to draw their State pwnsion - whether that be at 65,66, 67 or even later in the future.
To permit someone to simply keep going is a total nonesense and should always be at the employer's discretion.
Still, just because we have a blue/yellow party (a kind of snot colour when mixed) rather than a red party in power, doesn't necessarily mean that policies will improve. They are all f888888 idiots who have no idea what it's like to live, work and survive in the real world !
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Julian Stevens | 29 Jul 2010 6:18 pm
This seems to be a lot of fuss about a situation which, in practice, I would expect not actually to arise very often at all. The main purpose of the provision is to prevent employers forcing employees to retire solely on the grounds of having reached a certain age rather than because of declining ability.
On the other hand, if an employee aged, say 67, really is past his [or her] ability to undertake a job competently, then it isn't fair on the business for him to insist on carrying on solely on the grounds that he doesn't want to retire.
In most such instances, one would reasonably expect retirement to be a matter of negotiation rather than legal confrontation. Only a really obstinate old codger is likely to dig his heels in and cry foul on the grounds of age discrimination.
On balance, I think it's a reasonable relaxation of a carved-in-stone rule that says employees must retire just because they've reached a certain birthday. Lots of people want to retire at the age of 65 anyway ~ and if only this government would do what it promised to as far as reinvigorating the UK's saving (for retirement) culture, many more people would be able to afford to. A rather greater indignity than being made to retire before you want to is, I suggest, not having enough income to live on once you've actually done so, for whatever reason. And until people start or resume saving for retirement, we're going to see a great deal more impoverished pensioners.
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