New equality law: Age
Section five of the Personnel Today Management Resources one stop guide to new equality laws. Other sections.
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Understand what new age discrimination regulations mean Understand other relevant age discrimination legislation Learn about key legal cases |
The premise
In the future, it will be unlawful for employers to discriminate against an employee, prospective employee or - in some cases - a former employee, on the basis of their age. There may be exceptional circumstances, however, when this may be justified.
The law
There is no legislation yet in the UK that directly prohibits discrimination on the grounds of an employee's, or prospective or former employee's, age. However, under the European Equal Treatment Framework Directive (Council Directive 2000/78/EC), all European Union member states must have anti-age discrimination legislation in place by December 2006.
The government plans to beat that deadline by two months - in October 2006. After an initial public consultation in 2003, the government recently postponed the publication of draft regulations until 2005, which had been expected to be available in time for employers to have at least two years to prepare for upcoming changes.
In the meantime, a voluntary code of practice on age diversity in employment that outlines good practice standards - updated as Age Diversity At Work: A Practical Guide for Business - is available to guide employers on how best to manage an age-diverse workforce in six areas of employment: recruitment, selection, promotion, training and development, redundancy and retirement.
The law that eventually emerges may remove the upper age limit for unfair dismissal claims, entitle people of any age to a statutory redundancy payment, and address the issue of a default retirement age, among other provisions. Whether to retain a default retirement age and, if so, at which age it should be set is a contentious political issue, thought to be the main reason that the draft regulations have been so substantially delayed.
When the law does come into force, it will probably outlaw:
Direct discrimination:when a decision is made specifically on the basis of a person's chronological age or their perceived age.
Indirect discrimination: when a policy or practice applies to everyone but puts a certain group at a disadvantage, such as people of a particular age group, whether younger or older. Under some exceptional circumstances, such indirect discrimination may be justified.
Harassment: engaging in unwanted conduct, which may violate someone's dignity or creates an intimidating, hostile, degrading, humiliating or offensive environment for a person on the basis of age or perceived age. Lack of intention is not a defence.
Victimisation:treatment that victimises a person for initiating, or intending to initiate, a complaint or allegation or giving or intending to give evidence in relation to a complaint of discrimination on the basis of age.
The law is likely to protect, for example:
Those with new obligations will be likely to include:
Key concepts
The Directive: The European Equal Treatment Framework Directive (Council Directive 2000/78/EC), which establishes a general framework for equal treatment in employment and occupation. A Directive is a legal instrument that is binding on all EU member states and must be 'implemented' into domestic law by regulations or primary legislation in prescribed time periods.
Default retirement age: The term used by the DTI to describe the age, that may be set out in the regulations, from which employers would be able to retire their employees compulsorily without having to justify their decision by reference to 'specific aims' (see definition below). The age mentioned in the Age Consultation 2003 document is 70.
Mandatory retirement age: The age set by an employer for employees to retire, a practice which may be unlawful under the Directive. However, the Age Consultation 2003 document notes that it is looking into whether there should be exceptional cases when employers can justify mandatory retirement ages. In addition, the DTI and the Department for Work and Pensions are in disagreement about whether mandatory retirement ages should be abolished.
Specific aims: Aims which, exceptionally, employers and others with obligations under the Directive might use to justify differences in treatment. The aims will be set out in regulations, the DTI says.
Other relevant legislation
European Equal Treatment Framework Directive 2000/78/EC: Establishes a general framework for equal treatment in employment and occupation by outlawing discrimination on the basis of sexual orientation, religion or belief, disability and age in employment and vocational training.
Human Rights Act 1998: Gives 'further effect' to the rights and freedoms guaranteed to all under the European Convention on Human Rights and Fundamental Freedoms created in Rome in November 1950. It does not create any new statutory or common law rights for individuals who work for private (as opposed to public sector) employers. It imposes a duty on tribunals and courts, when determining a question that has arisen in connection with a Convention right, to take account of any judgment, decision, declaration or opinion of the European Commission and Court of Human Rights that may be relevant to the proceedings in which that question has arisen. It also makes it unlawful for public authorities - government departments and local authorities, for instance - to act in a way that is incompatible with a Convention right.
Key cases
As there is currently no direct legislation making age discrimination unlawful, employees have tried to bring age-related claims under other heads of discrimination, for example, indirect sex discrimination. The cases below are some examples of this:
BM PRICE V (1) THE CIVIL SERVICE COMMISSION AND (2) THE SOCIETY OF CIVIL AND PUBLIC SERVANTS (1977):
Did a specified upper age limit for certain jobs discriminate against women?
Ms Price contended that the age limit of 28 for applicants to executive officer posts in the Civil Service was indirect sex discrimination because fewer women could comply with that upper age limit than men. Her reasoning was that many women took time out from their careers to raise children and did not have enough experience by the age of 28.
Key point: The Employment Appeal Tribunal upheld Ms Price's complaint.
CADMAN V THE HEALTH & SAFETY EXECUTIVE (2004):
Are salary adjustments based on long service discriminatory?
Although this particular case focused on whether pay based on length of service discriminated against women, the question could again surface with regard to younger workers: Could length of service pay be seen as favouring older workers and discriminating against younger ones?
Ms Cadman's claim of discrimination was upheld by an employment tribunal on the basis that the respondent had not justified the use of service length to determine pay. That decision was overturned by the Employment Appeal Tribunal on the grounds that the employer did not have to justify using service length as a pay criteria. The European Court of Justice has been asked to rule on whether the practice is discriminatory towards women, on the reasoning that raising children or other home responsibilities meant women were less likely to work the same number of years as men.
CHANIN V BRITISH AIRWAYS PLC (2002):
Can groups of employees who were hired at different times lawfully be given different retirement ages? And might doing so constitute discrimination?
An employment tribunal in Watford found that British Airways was acting within its rights in forcing cabin crew employed after 1971 to retire at 55 while those who were hired before 1971 could stay until the age of 60. The group of about 70 complainants alleged sex discrimination, because most of those affected by the policy were women.
Several, together with a number of pilots, also alleged unfair dismissal, as they had previously worked for British Caledonian Airways, of which British Airways had assumed control under TUPE in 1988, where the retirement age had been higher.
In defending their actions, the airline succeeded in contending that the cost of keeping people in the workforce longer was prohibitive, despite the tribunal's finding that the applicants had been discriminated against on the grounds of sex. The case is being appealed to the Employment Appeal Tribunal, where it will be heard in March 2005.
Key point: Although brought to tribunal as an indirect sex discrimination case, this case raises significant questions in the area of age discrimination. A case to watch as it continues through the appeals process, particularly with regard to whether cost can ever justify indirect discrimination, and as age discrimination legislation edges closer to reality.
RUTHERFORD & ANOTHER V DEPARTMENT OF TRADE AND INDUSTRY (2004):
Is the current upper age limit for claims of unfair dismissal and redundancy payments unlawful?
The Court of Appeal has ruled that the upper age limit is not unlawful. However, this case - which was ultimately more about age issues - was nevertheless brought to tribunal on allegations of indirect sex discrimination. Two men who were over 65 at the time of their dismissal claimed that the upper age limit was indirectly discriminatory on the grounds of sex because more men than women typically choose to work past the standard retirement age.
A primary element in the case was identifying the correct pool of people (comparators) when deciding whether men were affected more significantly than women. The tribunal based the pool on people ages 55 to 74, while the DTI contended that the appropriate pool was the entire active working population between 16 and 79 years old. This long-running case was heard twice by an employment tribunal - which ruled in favour of the dismissed men both times - and then by the Employment Appeal Tribunal, which overturned the earlier decisions. The Court of Appeal held that the correct pool was the entire working population.
Key point: For now, the upper age limit on redundancy payments and unfair dismissal claims stands. Nevertheless, the issues raised by Rutherford, such as mandatory retirement ages and dismissal practices, will resurface when the draft regulations for anti-age discrimination legislation are published in 2005.
The future
It is evident that by December 2006, it will be unlawful to discriminate against employees, job applicants and people in or seeking vocational training on the basis of age throughout each stage of the employment cycle. Whatever the law's final wording, the legislation promises to serve as a catalyst to a revolution already underway in the workplace that reflects unprecedented and dramatically changing demographic, economic and lifestyle conditions.
One of the fundamental issues at the forefront in the draft regulations and, ultimately, the legislation to be implemented, is retirement age. The high interest in the retirement age debate involves two primary concerns: the desire of many people to continue to work throughout much of their life and also the very real pensions crisis.
Possibilities being considered include elimination of a retirement age, a default retirement age of possibly 70 years old and allowing employers to set their own company retirement ages within Government guidelines.
A recent survey undertaken by the Centre for Research into the Older Workforce at the University of Surrey showed that most of the 400 respondents, who were all 50-69 years old, favoured the abolition of a retirement age. The second most popular response called for employers to set their own mandatory retirement ages within Government guidelines, and the third choice was a default retirement age of 70.
Since age issues cut across all religions and beliefs, races and ethnic groups and sexual orientations, it would seem that age would be the easiest form of discrimination to eradicate. Nevertheless, it is well ingrained in the workplace culture, and may well prove the toughest to eliminate.
Some sources claim that, in the US, age discrimination claims are increasing at a speedier pace than elsewhere, where the number of such claims rose by 41 per cent over the three-year period of 1999 to 2002. In Ireland, where anti-age discrimination legislation for the workplace came into force with the Employment Equality Act of 1998, 19 per cent of discrimination claims are said to involve age.
Creating a discrimination-free zone
Recruitment
Review your recruitment, selection and promotion processes to ensure there are no hidden age barriers. One method of gauging this is to record the number of candidates of different age groups who are applying, shortlisted, interviewed and appointed.
Ensure job descriptions/specifications include only requirements clearly related to the duties. Focus on what the job is to accomplish.
Avoid giving age limits or age ranges in your recruitment adverts.
Avoid descriptives such as 'young graduates', 'mature', or terms such as 'according to age and experience'.
Remove age and birth date from your application forms or include such details, together with any other purely personal information, in a separate section of the form, which those conducting the selection process do not see. Also look at removing other age-revealing questions from your applications, such as school leaving dates. The Employers Forum on Age has its own suggested version of such a form, which can be accessed via its website.
Ensure any computerised processes do not 'sift' on age, for instance when using online recruitment.
Find out what different age groups think about your company as an employer.
Consider, when asking for periods of experience or qualifications, if such requirements are not actually 'shorthand' for excluding certain age groups.
If using recruitment agencies, ensure they also use bias-free screening tools and practices.
Good practice example: Some companies use telephone interviews at the first stage both to reduce the potential for any biases emerging and to gauge interviewees' telephone skills.
Selection
Promotion
Training and development
Employees of all ages benefit from training and development - and so does the business, when it invests in such opportunities across the workforce. Take individual learning styles into account
Redundancy
Retirement
Ensure your employees have a choice of pension and retirement options.
The four types of pensions available now are:
Because the rules covering pensions are so complex, employers should seek advice from a pensions consultant or the Pensions Schemes Office of the Inland Revenue.
Many employers help employees prepare for retirement with financial guidance and the opportunity to attend financial planning workshops.
Early retirement options have been used to manage workforce reductions but again, employers need to consider the impact on the mix of skills, age diversity and expertise throughout the organisation.
Flexible retirement schemes, in which a transition from full employment through part-time working to retirement, may be an alternative that could be useful to both the business and the employee.
Sources: The Employers Forum on Age and Age Diversity at Work: A Practical Guide for Business, Department of Work and Pensions.
Case study, age diversity: Nationwide Building Society
At financial services company Nationwide Building Society, employees 50 and older mean good business.
The firm's 50 and older workforce statistics include:
"Clearly, what we have identified is that customers value experience - in life, financial planning and ability to work together as part of a team," says Keith Astill, Nationwide's head of corporate personnel.
The over-50s make up about 12 per cent of Nationwide's workforce, up from less than 1 per cent in the 1980s. Since 2002, the company has offered a flexible retirement programme, which allows employees to stay on until the age of 70. Nationwide had found that a number of workers weren't ready to leave jobs they enjoyed simply because of an artificial deadline. "We were being told, 'Thanks, but I don't really want to go'," Astill says.
Customers are glad this particular segment of the workforce is staying on. They appreciate older employees' experience - not just in financial planning, but in life itself and the fact that these workers may well have encountered the kinds of situations that the company's products are intended to help finance, such as school fees and house extensions. "Our credibility is enhanced," Astill says.
Nationwide wants potential recruits to know the company values a diverse workforce, and has translated that value into new recruitment procedures. The company's advertising now depicts images of a diverse workforce in terms of age, race and ethnic groups. The wording used is also free of language that could make potential recruits feel as though they might not be welcome.
To further raise the profile of Nationwide's focus on diversity, the building society's CEO is often seen and heard in public forums discussing what has been done - letting the world know that the commitment to diversity starts at the top. Seeing evidence of a strong corporate commitment to a principle tends to attract like-minded people, Astill says. "And if we get the best people, I'm happy."
Initial interviews are conducted by telephone. What Nationwide listens for is a great attitude. Experience in the financial services industry isn't necessarily a requirement. "If we get a person with the right attitude," Astill says, "we can give them training and the knowledge to do the job."
Workers over 50 get a free health screening every two years - but so does every employee. Astill says the company's philosophy is to aim for all-inclusiveness instead of for selectivity in terms of deciding who gets what benefits.
The over-50s in Nationwide's workforce reflect not just employees who have stayed for the long-haul, but recruits who joined the company at 50 or older.
Astill knows of one woman, for instance, who joined Nationwide at age 56, and is still working there at age 70. And promotions are not reserved just for the young. Career progression is possible at any age, Astill says, adding, "We wouldn't rule anything out."
The time had definitely come to make the decision to allow workers to stay until 70, says Astill. "Now we're asking ourselves, why didn't we do it sooner?" And it makes good sense - for the business as well as for individuals involved.
"If
people are happy and challenged and given opportunities, they will build up
loyalty and engagement, and the business will flourish," he says.
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YEAR |
LIFE EXPECTANCY AT AGE 65 (yrs) |
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Men |
Women |
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1928 |
11.5 |
13.3 |
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1960 |
12.1 |
15.3 |
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2002 |
16.0 |
19.0 |
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2025 |
18.3 |
21.1 |
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2050 |
19.0 |
21.7 |
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Source: Government Actuary's Department, cited in: Simplicity, Security and Choice: Working and Saving for Retirement, 2002 |
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Section
1: Introduction |
