The Confederation of British Industry is warning businesses will be mired in legalities over retirement issues as a result of government failures to spell out their reforms of the official retirement age.

The phasing in of abolishment of the default retirement age of 65 is due to begin in April next year, although final details of its operation have yet to be published. The CBI is warning large companies will not have enough time to prepare for the new legislation and is asking for a further year’s delay in its introduction.

Trade unions and campaign groups representing older workers are likely to be hostile to any delay, as they have fought for changes in retirement law over many years. The present law is seen as unfair, with legal backing being given to firms which retire staff against their will. While the CBI supports the new legislation, it has concerns about its lack of detail and its resulting possibility of legal issues for employers.

The CBI sees no need for a rushed introduction of the new law as at present employees can continue to work over retirement age if the employer agrees, with surveys showing over 80 per cent of such requests being granted. Some 740,000 workers in the UK are over 65, a total of eight per cent of the workforce.

Deputy director-general of the CBI John Cridland states employers are understanding of the fact that shortfalls in pensions are making continuing to work after reaching pensionable age inevitable for many, and value the experience and skill of older workers. He believes the majority of such cases will not cause problems, but adds a minority may be difficult to resolve. Physically demanding jobs, for example, may not be suitable for many older employees.

The CBI’s position is that the government is wrong to scrap the default retirement age uncertainties unresolved. It believes the default age of 65 has acted as a wake-up call for employees to consider whether retirement should be taken, and also allowed employers to plan staff requirements well in advance.