Employees will in future get six months warning of any move to force them to retire under new proposals from the Government.
Under current legislation, companies can decide that someone is too old for their job at any age.
But under measures due to come into force by October 1 next year as part of the European Employment Directive, they will have to make a good business case for retiring someone under 65, give six months notice and consider requests to keep working.
The measures, which were described as "workable" by the CBI, also include a ban on age discrimination in recruitment, promotion and training, and remove the upper age limit for unfair dismissal and redundancy rights. Everyone should be able to continue working if they want to, Trade and Industry Secretary Alan Johnson said. "To thrive in a competitive market British business increasingly bases its employment and training decisions on talent not age. Employers know that they cannot afford to ignore the skills of any worker - young or old. People need to be able to plan for their future, and retirement should not come as an unexpected surprise."
CBI deputy directorgeneral John Cridland said firms would view the draft regulations as a "workable and commonsense approach".
EEF West Midlands said it was encouraged that the Government appeared to have responded to many of its concerns as to how the legislation would be implemented.
But Gordon Lishman, of Age Concern, said: "The Government has failed to embrace a real opportunity to move with the times and make forced retirement a thing of the past. In our ageing society, the economy will increasingly rely on the skills of older workers, yet thousands will continue to be pushed out of jobs and denied the right to choose when to retire, simply because of their date of birth."
And Damian Kelly, employment law specialist at Eversheds in Birmingham, said: " The new planned retirement process appears to give the employee a certain amount of power, but when you look more closely it seems that all employers in West Midlands businesses are required to do is be seen to follow a process."