Government plans to extend employment protection rights to workers in Britain aged over 65 will be completely counterproductive, employers have warned.
Currently employees' entitlement to redundancy pay and age-related unfair dismissal awards ceases at 65. The government is now considering extending such entitlement after 65 while also allowing employers to retire staff at 65, without such redress.
But as CBI director general Digby Jones pointed out yesterday, the plans will only act as a further disincentive for employers to take on older staff.
If employers are afraid that they will be unable to dismiss older workers without risk of litigation, they will simply avoid recruiting any older workers.
"This proposal is bizarre. It will make working-on less, not more, likely," Jone said.
"It could create an incentive for employers to retire staff at 65 rather than face the extra cost of a claim for redundancy pay or unfair dismissal on age grounds. With the spectre of 66 year olds claiming age discrimination payouts in excess of the £56,000 maximum for unfair dismissal - why would employers take the risk ?
"The government and employers are agreed that we should be making it easier for people to go on working past today's normal retirement ages," he added.
"Equal rights for older workers is a sound aim, but the government must be wary of the law of unintended consequences."
