Employers will be forced to review their entire HR policy under new legislation to deal with age discrimination, according to Birmingham Chamber of Commerce and Industry.
The Government is currently looking at how it can bring in the age discrimination section of the 2000 European Employment Directive in October of next year.
The directive outlaws age discrimination in employment and vocational training, including most employment situations such as recruitment, redundancy, promotion, pay and service related benefits.
Birmingham Chamber asked its members for their views as part of its contribution to the Government's consultation process.
The result was a real concern that the new legislation will be a potential minefield for employers, removing flexibility and creating additional red tape.
Under the Employment Equality (Age) Regulations employees will have a new right to request to work beyond retirement at 65.
Employers will only be able to justify different treatment on the grounds of age if they can show that it fulfils a legitimate aim and that the circumstances make it necessary.
According to the Chamber's survey, 58 per cent of those who responded are afraid that this approach will not be workable.
Charlotte Ritchie, policy executive at the Chamber, said: "Individual interpretation of what is legitimate and justified on age grounds leave the rules open to ambiguity and businesses unsure about which way to turn.
" The Government has stated that it will be up to employers to justify their decisions, although it has indicated that cost alone will not be a justification.
"The Chamber is calling on the Government to provide clear guidance to business on what is justification, well in advance of the regulations coming into effect, to allow employers to adequately prepare."
In the survey 83 per cent of respondents were worried that the regulations stipulate a six-weeks notice period for employees to request to work past 65. They say it is far too short and that businesses should be entitled to at least three months notice or even six months.
Ms Ritchie said: "Clearly we support the objectives of the new age rules, but in its present form it is just another example of business shouldering the burden of regulation.
"Potentially, all sorts of problems will arise if there is not a clear definition of what is justification as far as employers are concerned. Leaving the regulations in their present form could lead to a whole stream of employment tribunals.
"One thing is for sure, businesses will have to start looking at their HR policy on age now, to make sure it complies with the new regulations."