Leave retirement at 65, say small firms

The Government has proposed removing an employer's option to retire workers at 65, saying the change will prevent an anticipated skills shortage.

However, the Forum of Private Business (FPB) believes that if the move goes ahead, it could prove highly damaging to thousands of small firms.

At present, there is nothing to stop an employee working on past 65, providing his or her employer agrees.

However, if the default retirement age is scrapped, bosses will have to keep on over-65s, whether they want to or not.

The FPB said this will prove a huge problem for thousands of small firms, hampering their abilities to plan for the future.

The move could also open the door to painful employment tribunals, as employers' only means of ending employment will be through a "capability dismissal" based on the declining competence of the worker.

FPB chief executive Phil Orford said: "I don't think anyone would dispute the valuable contribution older workers make to the economy. With people living longer and healthier lives, the skills and experience older people can bring to the workplace are widely recognised.

"However, at the moment, there is nothing to stop anyone from working beyond 65, providing it suits both parties. The current law works perfectly well, so why tamper with it?

"By scrapping the default retirement age, all the government will do is take yet more control away from business owners, add even more complexity to workplace law, and open the door to costly and painful employment tribunal cases," said Mr Orford.

The FPB set out its views on the issue in response to a Government consultation, which closed yesterday.