UK - Changing the age when workers' redundancy rights apply - effectivelythe retirement age - could open a minefield of litigation, experts warn.
Legal information and advice provider Croner said firms could be at risk from claims of unfair dismissal and age discrimination if they dismiss an employee, or refuse to employ someone, for reasons relating to their age.
Scrapping, or significantly increasing, the age at which workers’ redundancy rights apply, has been mooted by the Pensions Commission as one way to plug the savings gap and ease deficit pressures on schemes.
However, Croner human resources specialist Richard Smith said it could end up costing businesses which might feel they had no option but to hold on to older workers for fear of employment tribunal claims.
He pointed out that a survey carried out by Croner this year revealed that 85%of human resources professionals thought the statutory retirement age should remain at 65.
Smith explained: “If the retirement age was increased it is likely that so too would the age at which an employee can raise a claim of unfair dismissal, meaning employers would no longer have a ‘get out’ clause to dismiss workers when they reach 65.
“Employers have enough red tape to deal with already, and raising the retirement age opens up a minefield of litigation over the treatment of ageing workers.”
Norton Rose pensions lawyer Lesley Browning agreed. She said that any increase in the retirement age could present massive problems for firms when they had to deal with older workers.
She believed the government needed to consider the wider effects of any retirement age increase - looking at redundancy, unfair dismissal and discrimination law implications.
Browning explained: “It is not as simple as saying we should raise the retirement age.
“The government can’t set pensions policy in complete isolation from the rest of the employment protection law that we have.”
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