Extending rights to redundancy and unfair dismissal payouts to workers aged over 65 could make it harder for employers to keep people on, according to the CBI.
The employer’s body made the announcement following reports that the Government is set to allow workers over 65 to claim for redundancy payments if they lose their jobs, according to reports.
The Department of Trade and Industry revealed its new policy to its panel of experts, the Age Advisory Group, last week. It will mean that workers over the age of 65 will be able to make redundancy claims in the same way as younger staff, although the levels of pay outs have not been confirmed.
However, CBI director general Digby Jones, called the proposal “bizarre”, and said it would make working later into life less likely.
“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,” he said. “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,” said Jones. “Equal rights for older workers is a sound aim, but the government must be wary of the law of unintended consequences.”