UK - Raising the retirement age could wrap employers up in costly red tape when it comes to hiring and firing older workers, UK business information and advice provider Croner has warned.
Croner highlighted the potential legal pitfalls employers could face if the retirement age is raised in the wake of the recently published Pensions Commission report on the state of the UK pensions industry.
While the commission has not yet made any recommendations, later retirement has been touted as one of the possible mix of options that could be considered when attempting to tackle the UK’s pension savings shortfall.
Croner HR expert Richard Smith (pictured) said the problem of the pension deficit shouldn’t be dumped on employers who could then risk claims of unfair dismissal, disability and age discrimination if they dismiss or refuse to employ someone, for reasons relating to their age.
“Raising the retirement age by compulsion does not make economic sense for most businesses and should not be used as a solution to our pension problems,” he said.
“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.
“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.”
Smith said it was not a case of employers being ageist but a later retirement age could lead to employers treating older workers more harshly during recruitment. Employers could conclude that refusing employment in the first place was less risky than having to ultimately dismiss an unsatisfactory older worker, he explained.
He warned employers to keep abreast with legislation to avoid problems, especially if the retirement age is increased.
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