At a time when one in five 16-24 year olds in Britain are unemployed, the government has decided to scrap the default retirement age of 65 years from October. This means employers cannot tell workers attaining the age of 65 to leave their jobs.

Employment Relations minister Ed Davey said it was the government's contribution to age equality. 'With more and more people wanting to extend their working lives, we should not stop them just because they have reached a particular age.'

The Age and Employment Network, a body which had been campaigning for removal of the default retirement age (DRA), said in a statement: 'Many employers will need to adopt a totally new mindset. They will need actively to plan and to assist workers to continue to contribute to the success of their organisations. This may mean adapting work practices and workplaces. It will certainly mean providing opportunities to train or re-train and to work more flexibly. Crucially they will need to recruit people in their 50s and 60s where they may not have done so in the past.'

One of Britain's biggest manufacturers' organizations, EEF, however, strongly reacted to the decision: 'There is also a real danger that it could open a Pandora's box, with the onus being placed on employers to prove whether older employees are capable of continuing in their current role. Inevitably, this could lead to employment tribunal cases from some older employees.'

Other experts said the plans would create the unintended consequence of shutting out younger workers - already disillusioned by the tough labour market - from job opportunities.

Jim Lister, head of employment at law firm, Pannone law firm, said in a statement: 'Businesses often rely on the retirement of older workers to reward more junior employees with promotion and to bring in fresh talent. Compulsory retirement can be unwelcome, but it provides a dignified and predictable end to employment.'

(Venkata Vemuri can be contacted at venkata.v@ians.in)