Government proposals to scrap the default retirement age will damage businesses and lead to a surge in costly employment tribunals, the Confederation of British Industry warns.
Pensions minister Steve Webb confirmed on Saturday the coalition Government would target a swift removal of the DRA.
Webb said: “We want to stop people being discriminated against in the labour market – at the moment it’s legal to sack someone for being 65. We think that’s nonsense.
“We want to get rid of that as soon as we can, so that for people who are good at their job and want to work longer are allowed to.”
However, CBI head of pensions policy Neil Carberry said the business lobbying organisation would continue to push to keep the DRA – and called for a broader based review of retirement to ensure individuals could retire with dignity.
Carberry warned failure to generate informed discussion on the issue could prove detrimental to UK businesses.
He said: “Our message to government is, it is all very well saying you’re going to get rid of the DRA but you have to replace that framework with another framework for leaving the labour market. If you don’t, all you are doing is creating problems and a higher caseload in the employment tribunal system.
“What will happen ultimately is that a lot of people who are currently retired at 65 will probably face performance-based dismissal. That will be a pretty devastating way for people with a lot of service to leave companies, but if that is the only way to manage someone out of a company then that is what will happen.”
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