'Ban setting a retirement age'

Employers could be barred from setting a compulsory retirement age under radical plans being considered by the Government.

The proposal forms part of a package of anti-discrimination measures, published today, which will ban firms from discriminating on grounds of age, religion or sexuality.

Companies are already banned from treating workers differently on grounds of race or sex, but other forms of prejudice are not illegal.

The moves are needed to bring Britain into line with a European Union directive banning discrimination at work. Ministers support the measures, but point out that one side-effect could be to allow workers to carry on into their seventies, eighties or nineties. The document, from the Department of Trade and Industry, says: "One important issue, for example, is whether employers should still be allowed to fix a compulsory retirement age at, say, 65.

"Some countries with existing laws against age discrimination at work have banned entirely the use of compulsory retirement ages. Other countries have made retirement age an exception."

The proposal has huge implications, not only for companies but for the workforce in an ageing Britain. For that reason it will face enormous and potentially decisive resistance, not least from business leaders.

The document praises DIY chain B&Q for its policy of employing older workers, who, the company says, get on well with customers and have lower rates of absenteeism.

The document will be welcomed by unions and equality campaigners. Business leaders, however, may object to the cost of measures, which would be likely to increase the number of industrial tribunals.

Banning discrimination on the grounds of age could end the practice of firms selecting over-fifties for compulsory redundancies. Once out of work, fifty-somethings often find it hard to land another job.

The move to extend race laws to protect religious minorities runs parallel with the current Anti-Terrorism, Security and Crime Bill which would outlaw the incitementof religious hatred. The law protects some religious groups, such as Jews and Sikhs, because they are defined as a race. Others including Islam and Christianity are not protected.

The suggestion that the laws should be extended to cover sexuality will improve the Government's standing with gay rights campaigners, who are frustrated that ministers have been unable to secure the removal of Section 28, the law which bans the promotion of homosexuality in schools.

While today's document has been drafted by the DTI it was being launched by Cabinet Office minister Barbara Roche, who has responsibility for equality measures across the Government.

A Cabinet Office source said: "Equality at work for everybody is something that the Government wants to achieve. This would be quite a big step along that path."

The consultation paper also looks at the case for merging the Commission for Racial Equality, the Equal Opportunities Commission and the Disability Rights Commission into a single anti-discrimination watchdog.