The Government has outlined plans to make it illegal for workers to be forced to retire before they reach 65, unless their employer can fully justify the decision.
The proposals, which link into the introduction in 2006 of European laws banning age discrimination in the workplace, have been branded a “fudge” by age discrimination campaigners but “pragmatic” by employers.
Under the plans announced by trade and industry secretary Patricia Hewitt and work and pensions secretary Alan Johnson, a default retirement age of 65 will be set, making it much harder for employers to retire staff before that.
Employees will also have a right to ask to work beyond a compulsory retirement age, a request employers will have a duty to consider.
But the Government pulled back from the key demand of many campaigners, and even quite a few employers, of scrapping mandatory retirement ages altogether.
Instead, it will closely monitor the appropriateness of keeping a retirement age, reviewing the situation in five years time.
Hewitt said: “This legislation is not about forcing people to work longer. The default age is not a statutory compulsory retirement age; employers will be free to continue to employ people for as long as they are competent and capable. The right to request will help provide more choice and flexibility for those who wish to stay in work beyond retirement.”
But the Employers’ Forum on Age slammed the proposals as a “fudge” and said the Government had simply failed to make a decision.
Director Sam Mercer said: “Employers need clarity. Simply postponing the decision leaves everyone in the dark. After five years of debate we are no further forward and the same arguments will be made in five years time.”
The Chartered Institute of Personnel and Development agreed the Government had ducked the issue and warned that the abolition of mandatory retirement ages was “inevitable”.
Diversity adviser Dianah Worman said: “The Government risks giving employers an excuse to delay action they need to start taking now if they are to attract and retain talent in a tight labour market. Age discrimination exacerbates skills shortages that risk undermining the UK economy.”
But the Confederation of British Industry lauded the proposals as “sensible and pragmatic”.
Deputy director-general John Cridland said “It means people can ask to work beyond 65 and they will be able to do so unless there is a good business reason why not. This will be a big change from the status quo because contractual retirement ages below 65 will now have to go.
”But it also means there is a clear cut-off point to employment, which is important if you don't want to embitter the retirement process and trigger an explosion of tribunal claims. Neither employers or employees want people to work forever,” he added.