CBI: Businesses will be baffled by new retirement rules
John Cridland, CBI Director-General Designate, comments on the government’s confirmation of its plans to phase out the default retirement age:
“The guidance for employers on working without the default retirement age is too little too late. The government’s decision to scrap the DRA leaves businesses with a number of difficult practical issues.
“The impact on employers, especially smaller ones, will be considerable. There is not enough clarity for employers on how to deal with difficult questions on performance. Less than three months is not enough time for businesses to put in place new procedures. The outcome will be more unpleasant and costly legal action.
“Employers accept that more people will want to work beyond 65 as the population ages, but the government has not recognised the fundamental question, which is how should employers manage retirement on the basis of a performance appraisal. This will be particularly acute in physically-demanding sectors.
“While it is helpful that group insurance products are being excluded from age discrimination coverage, we now look to the government’s employment law review to help businesses, especially smaller ones, to deal with the practical implications of the decision to scrap the DRA. The law of unfair dismissal also needs to be revised and simplified.”
