An Irwin Mitchell seminar held recently on anti-ageism legislation generated such high delegate demand that the event relocated to a venue which could cater for double the anticipated number of attendees.
This reflects businesses growing recognition that anti-ageism legislation will be introduced in a matter of weeks. It also shows the commitment and foresight of organisations looking to protect their reputations via compliance as although the legislation will come into force in October 2006, employers will still have two years to respond from that point.
Recent estimates put the cost of ageism on UK plc at over £30 billion per annum in lost production and a further £5 billion through the cost of benefits, not forgetting the impact on individuals who offer a rich pool of talent but who are prohibited from contributing The Age Regulations, part of the European Employment Directive and enforced by the Commission for Equality and Human Rights, will prohibit age discrimination throughout the employment process, from recruitment, promotion, training and provision of benefits.
- end practices such as indicating age preferences in the recruitment process
- dispense with compulsory retirement below age sixty five unless there is a justifiable rationale
- set a national default retirement age of 65 which employers may choose to adopt, although employees may work beyond that age where agreed
- give new employment rights to everyone in or looking for work
- provide the new CEHR with the powers to police effective implementation of the new employment rights
The legislation will in effect render it illegal to use the grounds of age to refuse employment, training, and the opportunity of promotion, offer adverse terms and conditions, compulsorily retire an employee before the default retirement age of 65 or company's traditional age or dismiss them.
Any such action will constitute direct discrimination. Equally unlawful is indirect discrimination via operating selection criteria, remuneration packages etc which disadvantage employees or candidates because of age. Advertisements with phrasing along the lines of a young atmosphere in the office or graduated in the last seven years will be likely to attract the ire of the CEHR.
Companies may need to revisit their application and interview processes to ensure use of competency-based application forms and that relevant staff receive training in equal opportunities and age discrimination. Those responsible for the HR function should also draw up a checklist on conducting the interview:
- interviewers must focus on the specified job criteria;
- have a mixed-age interview panel;
- follow up all references;
- don't make assumptions about health or physical abilities
Employers should also review their policies on bullying and harassment to cover age grounds, and ensure that all employees are made aware of the updates. This may call for training regarding the new laws implications, e.g. any employee engaged in harassment may be liable for prosecution along with the employer.
The legislation recognises that some businesses may have justifiable reasons for what may be appear to be direct or indirect discrimination. Examples of legitimate aims include:
- Health, welfare & safety;
- Facilitation of employment planning;
- Training requirements;
- Encouraging & rewarding loyalty;
- Recruiting or retraining older people
An employees remuneration package may also fall foul of the new legislation. Benefits or pay increases influenced by length of service tend to favour older rather than younger workers. Employers must review their policies so that rates of pay and benefits are linked to employees experience and other non-age related criteria.
The legislation will remove the upper age limits on unfair dismissal and redundancy. Sixty five will become a national default retirement age, making compulsory retirement at a younger age illegal, unless it can be objectively justified or the organisation has another normal retirement age.
The employer must provide notice in writing of the retirement at least six months - but not more than twelve - before the date and alert the employee that they may request to work beyond 65 or any other retirement age set by the employer. Failure to follow these requirements could have the potential for the employee to receive compensation and claim unfair dismissal.
Given the increasing age of the population, business success may be determined by retention / recruitment of older workers. It is believed that organisations currently employ over 1 million people above the current pensionable age. They say benefits include:
- improved retention/lower recruitment costs;
- higher morale & productivity;
- access to a broader range of skills and experience;
- enhanced corporate reputation
Employers who are uncertain of the demands of the new legislation should seek counsel on their employment policies and procedures and so safeguard their corporate reputation.