Industrial relations and the ageing workforce: a review of measures to combat age discrimination in employment
The implications of the ageing workforce in Europe are of increasing concern to policy-makers and industrial relations practitioners at both national and European level. The issue is especially topical in 2000, in the light of the forthcoming adoption of the EU Directive on equal treatment in employment and occupation for all people irrespective of a range of factors, including age. This EIRO comparative study reviews: the general employment situation of older workers in the EU and Norway; government measures, whether statutory or otherwise, to combat age discrimination and promote the employment of older workers; the approach taken by the social partners; and the views of governments and social partner organisations on the age discrimination provisions of the EU Directive.
Long-term demographic trends, particularly falling birth-rates, mean that the workforce is ageing across the European Union. There are relatively fewer younger workers and the middle and older age groups represent an ever more important part of the workforce. Yet an almost similarly universal trend has been the early withdrawal from the labour market of older workers, especially since the 1980s, with major implications for economic growth and social expenditure. In response to these trends, the need to adapt employment policies and practices to the ageing workforce has become a major concern of the institutions and Member States of the EU. Notable EU-level developments include the following.
- Among the main priorities identified in the European Commission's May 1999 Communication Towards a Europe for all ages - promoting prosperity and intergenerational solidarity (EU9909189N) is to increase the level of participation by older people in the labour market by reinforcing their employability, reviewing employment rules and practices to adapt the workplace to ageing, and promoting equal opportunities.
- The European employment strategy (EU9909187F) has identified the low employment rate of older workers as an important issue. The Employment Guidelines for 2000 invited Member States and the social partners to develop a policy for active ageing, encompassing measures such as promoting life-long learning and flexible working arrangements to enable older workers to remain and participate actively in working life, and emphasising the "age dimension" of human resource management.
- The Amsterdam Treaty introduced new powers for EU action to combat various forms of discrimination, including on grounds of age (Article 13 of the EC Treaty) (EU9707135F). In November 1999 (EU9912318F), the Commission adopted a proposal for a Directive based on Article 13 to establish a general framework for equal treatment in employment and occupation for all people irrespective of a range of factors, including age. This proposal was the subject of a political agreement within the Council of Ministers in October 2000 and is due to be formally adopted in the near future.
The aim of this comparative study is to give a broad overview of national provisions to combat age discrimination against older workers and to encourage the employment and retention of older workers in the 15 Member States of the EU plus Norway. Existing measures vary considerably across Member States, encompassing a range of policies and practices including statutory requirements, other governmental measures and action by employers and trade unions. The study is based on information provided by the European Industrial Relations Observatory (EIRO) national centres in each of these countries in response to a questionnaire. The national reports, which contain more detailed information on the national provisions summarised here, are available separately on the EIRO website, along with the questionnaire.
We begin by considering the general employment situation of older workers across Europe. We move on to review government measures, whether statutory or otherwise, to combat age discrimination and promote the employment of older workers, and the approach taken by the social partners. We then outline the views of national governments and social partner organisations on the specific issue of the age discrimination provisions of the EU Directive on equal treatment.
The employment situation of older workers
In many ways, older workers benefit from greater social and employment protection. They might gain from seniority- or service-related pay and benefits arrangements, and are generally less likely to be made unemployed. In the debate on reform of the welfare system in Italy in the 1990s, for example, it was claimed that it was mainly young people who suffered from unemployment and atypical work, whereas older workers benefited from secure employment, seniority rules and a generous pension system.
However, increasing recourse to early retirement and redundancy for older workers in company restructuring in the 1980s and 1990s led to mounting concern. Unemployed older workers usually found it especially difficult to find re-employment. Participation rates fell as they looked instead to an alternative status as "early retirees" or as medically unable to work. In Luxembourg, for example, the growth of early retirement and wide take-up of the disability pension led to a dramatic increase in the withdrawal of older workers. By 1997, three out of five people in the active 55-60 age group had already left the labour market. Likewise, the biggest concern in Spain in the 1980s and early 1990s was youth unemployment, but the largest group of unemployed people is now the over-45s.
This was partly explained by seniority-related salary scales which made older workers more expensive to employ. In Belgium, for example, the average white-collar worker would expect to see his or her salary grow over the course of employment by up to almost 50% based on age alone. Other costs reflected higher pension contributions and service-related leave and sickness benefits. In these circumstances, early retirement and voluntary redundancy were used to circumvent legal and other restrictions on older worker dismissals. Early retirement in particular has become entrenched, partly because of the expectations of employees (older and younger alike) as a reward for long service and as a less painful way of managing workforce contraction. In this sense, older workers are "bought out" by redundancy and pension payments, with trade union and often individual consent.
Older workers' exposure to exit from the labour market has therefore increased during restructuring. Older workers also generally have fewer re-employment possibilities. The operation of internal labour markets leads to upper age-limits on outside recruitment. Furthermore, even in tight labour markets, older workers suffer disproportionately from long-term unemployment for structural reasons. However, much of the problem also seems to be accounted for by stereotypes held by employers, which associate older workers with productivity problems, illness, inflexibility and inability to learn ? views which do not find solid empirical support, but which may become self-fulfilling prophecies. Increased competition and work intensification reinforces these negative attitudes as employers demand what in Germany are referred to as olympiareife Mannschaften? staff able to cope with "Olympic" competition.
Nevertheless, there is some evidence that the combined forces of economic growth and demographic change are beginning to have some effect in terms of prompting employers to review their attitudes and practices. In Denmark, for example, employment among the 50-59 age group is presently growing three times as much as overall employment. In the UK, a growing number of leading employers are joining the "best practice" group, the Employers' Forum on Age (UK0003159N). Policy-makers have also had some impact. Governments across the EU are developing a range of policies, particularly in the area of pensions reform, to limit the extent of early retirement. Initiatives have concentrated on supply-side interventions to improve training and qualifications together with legal regulations, such as in Austria (AT0008228F), to restrict early retirement and increase the cost of dismissing an older employee. In the Netherlands, for example, the so-called "older workers' guideline" was withdrawn in 1994. This had permitted the primary lay-off of older workers in collective dismissals (NL9709131F). Cases where older workers were the first to go in such situations dropped from 20% in 1996 to 3% in 1999. In Sweden, the latest report of the Swedish Long-Term Survey, published in June 2000, raises concerns about the longer-term implications of demographic change, coinciding with recent government proposals to increase the retirement age to 67 from the current 65 (SE9911106N).
Statutory measures
Most EU Member States do not have legislation concerning age discrimination, though many cover the issue in some form through their state constitution or labour code (or similar provision). Table 1 below lists those countries which have some general or specific constitutional provision on age discrimination.
| Country | State constitution | Workers' statute/ labour code | Other legislation |
|---|---|---|---|
| Austria | . | G | . |
| Belgium | G | . | Recruitment: no maximum age limit |
| Finland | S | . | Employment Contracts Act |
| France | . | G | Redundancy |
| Germany | . | S | . |
| Greece | G | . | . |
| Ireland | G | . | Employment Equality Act 1998 |
| Italy | G | . | . |
| Luxembourg | G | . | . |
| Netherlands | G | . | Legislation under discussion |
| Spain | G | S | . |
G = general reference to discrimination which could include age; S = specifically mentions age discrimination.
Source: European Commission communication, COM (1999) 564 final, 25 November 1999; EIRO national centres.
Age discrimination is prohibited in Finland by the constitution and the Employment Contracts Act. In the Cooperation Act, it is stipulated that the special needs of the older workforce should be considered in personnel and educational schemes.
Most state constitutions refer to discrimination on such criteria as race and gender, but not specifically to age. In Portugal, for example, Article 13 of the constitution upholds the principle of equality regardless of gender, parentage, race, native language, place of birth, religion, political convictions and personal ideology, education, economic status and social condition, but it does not mention age. Likewise, amendments to the discrimination law of Luxembourg in 1997 and 2000 itemised over a dozen social categories that could not be used as a basis for distinction, but age was not one of them. However, a previous amendment of 24 May 1989 stipulated that the grounds for termination of an employment contract must be "real or serious", understood to mean not based solely on an employee's age.
In some countries, age is taken to be implicit in the provisions on equal treatment. This applies to Italy, for example, where Article 3 of the constitution refers to the removal of social and economic obstacles that impede the full participation of all workers in the political, economic and social life of the country. The Workers' Statute, however, refers to discrimination on the grounds of political opinion, religion, sex and trade union activity (Article 15), but makes no specific reference to age.
In some countries, there is explicit protection for older workers through the labour code. In Austria, the Works Constitution Act discourages the dismissal of older employees and further regulations (the Employment Contract Law Adjustment Act, AVRAG) provide recourse through the courts if dismissals are "socially unjustified". The German Works Constitution Act contains three regulations concerning older employees:
- employers and works councils are to ensure that older employees are not discriminated against;
- in general, works councils are to promote the employment of older employees within the company; and
- employers and works councils are to consider the interests of older employees in training.
In addition, the Federal Staff Representation Act requires staff councils (the public sector equivalent of works councils) to promote the integration and occupational development of disabled persons and other groups who require protection, such as older employees. There are also other regulations with specific provisions concerning protection against unlawful dismissals (selection is to be made in line with social criteria) and providing for higher severance pay for older employees.
A few countries have introduced specific laws on age discrimination. In France, age is directly referred to in the laws governing redundancy, and case law stipulates that age may not be used as the only legitimate grounds for termination of employment. Employers must also pay attention to the re-employment difficulties faced by older workers when establishing their criteria for selection for termination. In Belgium, a law was introduced in 1998 which prohibits the use of age as a criterion in recruitment and selection. This was intended to provide an impetus for employers to reconsider their personnel policies and practices more generally. A proposed law prohibiting discrimination in employment on the grounds of age is also presently before the second chamber of the Dutch parliament, as of summer 2000.
However it is in Ireland where the legislative approach has been most fully developed. The Irish Employment Equality Act 1998 (see box 1 below) came into force in October 1999 (IE9909144F) and bears strong similarities to the proposed Article 13 Directive on equal treatment. It is as yet too early to make an assessment of the impact of the Act in relation to age discrimination. However there is anecdotal evidence that the legislation is having some impact. For example, the government has recently abolished age-related pay grades in the civil service in compliance with the legislation.
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Box 1. The Irish Employment Equality Act 1998
The Employment Equality Act 1998 outlaws discrimination in employment on seven new grounds, one of which is age (for persons aged 18 to 65). The Act prohibits direct and indirect discrimination in: access to employment, training or work experience; conditions of employment; promotion and regrading; and the classification of posts. The Act grants employees rights to equal remuneration and equal treatment in employment and provides for the insertion of equality clauses into all contracts of employment. In addition, the Act regulates: the field of vocational education and training; the work of employment agencies; and employment-related advertising. The legislation also covers trade unions, employer organisations and collective agreements. The Act contains a number of age-related exceptions and qualifications that are similar to those contained in the European Commission's proposal for a Directive on equal treatment. The legislation makes it possible for employers to fix different ages for the retirement of employees of any class or description. It is not unlawful for employers to discriminate on age grounds where it is shown that there is clear actuarial or other evidence that significantly increased costs would result if discriminatory treatment were not permitted. It also permits the setting of maximum recruitment ages in certain circumstances: to take account of any necessary duration or cost of training; or on account of the need for a reasonable period of time prior to retirement age during which a recruit will be effective in a job. In addition, different terms and conditions are permitted on the basis of seniority and length of service, while exemption on the grounds of occupational qualification is also provided for. |
Other labour market interventions
Most countries have developed a combination of fiscal, publicity and training initiatives designed to limit early retirement and encourage the recruitment and retention of older workers. In Germany, for example, access to early retirement has been restricted because of rising social security costs. The age limit for employment subsidies for older people was also lowered to 50 years from August 1999. In July 2000, the Federal Employment Service launched an appeal to companies to employ older long-term unemployed persons. Its president pointed out that over-50s account for one in four of the long-term unemployed, and pledged that job centres will become more active on their behalf under the campaigning slogan "50 plus ? they know what to do". Portugal has likewise developed a number of measures including fiscal benefits for the hiring and retention of older workers, targeted education and training, support for outplacement, and efforts to limit early retirement. Most countries have introduced policy packages aimed at retention, recruitment and training of older workers, and a number have launched more general programmes or initiatives relating to older workers.
Retention
The Austrian AVRAG regulations provide a number of options for reducing the working time of workers aged over 50, designed to help retain older workers, if both employer and employee agree. These include terms governing severance payment and access to partial pensions. Companies are also obliged to report dismissals of workers aged over 50 to the Employment Service, which then has to take measures to secure their re-employment. Similar provisions apply in Sweden. In addition, companies in Sweden and France have to make payments to the unemployment insurance fund if they dismiss long-serving employees aged over 50. In Sweden this rises from 0.2% of the employee's salary to a maximum of 3%, depending on length of service.
In Norway, there is some legal support for the principle of seniority, which provides some protection for older workers in dismissal situations, although this is widely subverted by the practice of voluntary early retirement.
In Belgium, policies to promote the employment of older workers are underdeveloped, partly because previous concerns in the 1980s were to redistribute employment opportunities to younger workers (BE9905271F). The "collective early retirement" provisions remain in force, and have evolved from a means of redistributing employment to facilitating restructuring through the redundancy of older workers.
However, many countries are concerned at the public expenditure implications of early exit and demographic change. The Swedish government is anxious to reform the system of unemployment insurance, following a report in March 2000 that showed that state benefits were extensively being used to facilitate the withdrawal of older workers from the labour market. In Italy, the reform of the pension system introduced in 1995 is expected to increase the numbers of older workers in the labour market. This is especially due to the shift from earnings-related to contributions-related pensions (a worker could receive the former after 35 years of contributions, regardless of age) and the progressive increase of the pensionable age.
Recruitment
Luxembourg and France provide financial incentives for employers to recruit unemployed workers aged 50 or over. In Spain, similar measures were introduced in 1997 in the form of social security allowances for companies hiring unemployed workers over 45. Little use has been made of the scheme, however, as employers still find it more profitable to recruit younger workers. In the Netherlands, the government is presently considering the introduction of beneficial tax measures favouring the employment of older workers, following advice from the tripartite Social and Economic Council (Sociaal Economische Raad).
Training
In June 1999, the UK government launched "New Deal 50 plus", aimed at the 30% of over-50s without work and on benefits for six months or more. It offers individuals an employment credit, free of tax and national insurance, for up to 12 months, plus a training grant and special advice and help for older job-seekers provided by the Employment Service. The government also announced in December 1999 the introduction of "third-age apprenticeships" to provide a menu of training options for the over-50s in order to boost the take-up of training within New Deal 50 plus and engage employers more directly. In Greece, measures under the National Action Plan for employment, such as training and employment incentives for the unemployed, are usually open to all ages rather than older workers in particular. France is scheduled to introduce from 2001 an individual, portable right to training, guaranteed by collective agreement, and to promote the validation of vocational experience (FR9904172F).
Other government programmes/campaigns
The Finnish government has established a National Programme for Older Workers, carried out in cooperation between various ministries and the social partners (FI9708125F). It aims to improve the position of older workers in employment and facilitate the reintegration of those without jobs. In Denmark, the Ministry of Labour set up a Senior Policy Initiative Committee in 1997 to advise on issues affecting the employment of older workers and to promote wider awareness through conferences and seminars. Regional authorities have been similarly active. In terms of specific measures, the Danish rules governing entitlement to early retirement pay have been tightened (DK9812197F), and a pilot scheme was introduced for 2000 and 2001 to subsidise the public sector recruitment of long-term unemployed people aged over 48. In May 1999, the Swedish government appointed a working group to examine discrimination in industry and in the labour market, including with specific regard to age. This body will propose measures for legislative reform, in the light of EU-level initiatives.
In the UK, the government launched a non-statutory code of practice in June 1999 (UK9906110N) designed to encourage employers to adopt policies to avoid age discrimination in employment. This provides that employers should:
- recruit on the basis of the skills and abilities needed to do the job;
- select on merit;
- base promotion on the ability, or demonstrated potential, to do the job;
- encourage all employees to take advantage of relevant training opportunities;
- base redundancy decisions on objective, job-related criteria to ensure the skills needed to help the business are retained; and
- ensure that retirement schemes are fairly applied, taking individual and business needs into account.
The code recommends: avoiding age limits or age ranges in job advertisements; using mixed age interviewing panels; ensuring age is not a criterion for redundancy; and considering alternatives to early retirement for those whose skills and abilities may be lost.
A consultative draft of the code was developed by a working group including representatives of the Confederation of British Industry (CBI), Trades Union Congress (TUC), Chartered Institute of Personnel and Development (CIPD), the Employers' Forum on Age and other groups (UK9809148F). The government is undertaking an extensive publicity campaign to promote the code but early research suggests that awareness of the code among employers and older workers is far from universal, and that its influence on company practice has been limited. Ministers have indicated that the impact of the code will be reviewed in 2001 and that the government has not ruled out legislation. The CBI supports a non-statutory approach to tackling age discrimination but the TUC favours statutory intervention, arguing that a voluntary code is unlikely to be effective. The CIPD, representing personnel managers, supports the code of practice but acknowledges that if voluntary self-regulation by employers fails to materialise, the case for legislation would be strong.
In Ireland, there have been few other initiatives, apart from the 1998 law, relating to age discrimination or the labour market position of older workers, though many benefit from measures focused on long-term unemployed people. This is because Ireland is not facing the same problem of an ageing population and workforce that is confronting other European countries. There are serious skill shortages in the Irish economy (IE0006152F), but the search for solutions has focused mainly on increasing female labour force participation and immigration. However, the Minister for Enterprise, Trade and Employment, Mary Harney, has recently explicitly recognised Ireland's failure to tap the potential of the over-55s. Various measures have therefore been proposed to: equip older workers with the skills necessary for labour market participation; facilitate the development of flexible working arrangements; raise levels of awareness among employers; and even to examine the question of compulsory retirement ages. The newly created Equality Authority has also recently established an advisory committee on the equality agenda relating to older people (50 plus), with representatives from the social partners, government departments and state agencies.
Social partner initiatives and collective bargaining
Age discrimination is not generally a subject for collective bargaining, though there are a number of issues that are negotiated that have impact on the employment position of older workers. In Norway, for example, several national-level collective agreements have addressed the issue of adapting work to older workers with diminished health. A number of private sector industry agreements also explored this as part of the 1998 wage settlement, stipulating that the local parties should discuss the practical adaptation of the workplace. This extends to agreements covering work tasks, breaks, home-based work and part-time arrangements.
In Italy, age discrimination issues are indirectly addressed through collective bargaining at the interconfederal level on worker protection in collective redundancies (the "social shock absorbers" - IT9802319F) and training. "Social shock absorbers" are used to ensure that redundancies occur with the lowest possible social costs, providing some protection for older workers since they might find it more difficult to find another job. However, they are closely connected with the pension system, and have been used in practice to provide income support until retirement age. The law incorporates the criteria generally used in collective bargaining, so that for example seniority in years of service and dependent family members are relevant factors in redundancy selection. In sectors without social shock absorbers, such as banking (IT9803321F) and the railways (IT9912349F), agreements have been signed between the social partners establishing funds to support workers taking early retirement and to assist other redundant older workers to retrain or seek jobs elsewhere. At company level, one of the most significant recent agreements was signed in March 2000 in relation to 13,500 redundancies at Telecom Italia, providing for relocation and training of older workers.
In France, age discrimination has not been addressed at intersectoral, sectoral or company levels, as there remains a fairly strong consensus among the social partners that redundancies should be oriented towards older workers, reflected in the recent renewal of the "job substitution allowance" (Allocation de remplacement pour l'emploi) scheme, whereby employees may retire early on the condition that new workers are taken on to replace them (FR0001134F). However some company agreements stress the right for all workers, including older employees, to participate in training. Training savings accounts have been introduced at Peugeot, Renault and in the beverage industries. Otherwise, the main issue of concern has been pensions.
No relevant agreements are reported to exist in Luxembourg, Portugal or Greece, where discussion has centred at national level on the participation of pensioners in the labour market. In Finland, age discrimination issues tend to be addressed by law rather than through collective bargaining. The social partners have discussed this and related issues only in terms of revisions to employee pension schemes, in collaboration with the government. In Spain, no measures have been negotiated on age discrimination, although some older workers have benefited from company agreements that exchange employment stability for working time flexibility. In Austria, age discrimination is not normally a specific issue for collective bargaining, though there are indirect considerations to do with life-time incomes. However in 1999 a joint pact for older workers was presented by the government, the employment service and the social partners, addressing the issues of financial incentives to employ older workers and flexible working time (AT9903135F).
In Denmark, the county and municipal administrations have taken the lead by concluding framework agreements concerning the employment of older workers. These have been designed to help retain older workers in the public sector by initiatives such as gradual working time reductions. The Danish Employers' Confederation (Dansk Arbejdsgiverforening, DA) takes a more cautious view of the problem than the government, and argues that developing a series of specific initiatives for older workers risks reinforcing the stereotype of this group as less productive and in need of special help. The Confederation of Danish Trade Unions (Landsorganisationen i Danmark, LO), in a recent position paper, takes an ambivalent view of early retirement as an individual right but with possible negative social as well as individual effects. The former refer to the loss of skills and possible labour shortages, as well as an increase in the dependency ratio; the latter to possible social withdrawal. The LO wants to see more incentives for employers and older workers to train and maintain their employment status. This might include a clearer statement of commitment to providing opportunities for older workers within collective agreements and specific measures to facilitate part-time work and gradual withdrawal. At the same time, the state should develop training initiatives for unemployed people aged 45-65.
In 1998, the Dutch Labour Foundation (Stichting van de Arbeid, STAR), consisting of employer and employee representatives, reaffirmed its 1993 position on equal treatment in the labour market. Although age was not explicitly mentioned, the social partners endorsed Article 1 of the Constitution concerning equal treatment and non-discrimination. This followed a 1997 position paper arguing for age-conscious personnel and social policy (NL9708125F). However, age discrimination, in contrast to the general issue of non-discrimination, has not been an issue for collective agreements at any level, apart from particular issues such as redundancy provisions and pensions.
Similarly, age discrimination, as with equality issues more generally, has not been a feature of collective bargaining in Ireland. Where age has been an issue, this has generally been concerned with making provision for early retirement. Some company agreements have, however, introduced practices which have indirectly benefited older workers, such as the 1997 agreement at Telecom Eireann which provided for extensive employee retraining and redeployment. At national level, the current national agreement, the Programme for Prosperity and Fairness (IE0003149F), has established a "Framework for the Development of Equal Opportunities at the Level of the Enterprise", bringing together representatives of government, trade unions and employers to advise and disseminate good practice. The agreement also reinforces tripartite commitments to lifelong learning.
In Sweden, there are no reported collective agreements referring to age discrimination, though specific issues are covered, such as age-related notice periods and pensions. However, in September 1999 the Metal Group (Metallgruppen), representing employers in the mining, steel and engineering industries, introduced a project designed to retain older workers and maintain their skills. This followed large-scale early retirements as part of industry restructuring. The Swedish Confederation of Professional Associations (Sveriges Akademikers Centralorganisation, SACO) suggests that government proposals to introduce individual training-savings accounts could be used to empower older workers to invest in education and the restoration of their skills, and this may become an issue for future collective bargaining.
Training has also been an important issue in Belgium. Successive intersectoral agreements have called for efforts to direct training to "groups that are at risk", including older unemployed workers and those over 50 affected by mass dismissal, restructuring or new technologies. For 1999-2000, this called for 0.1% of paybill expenditure to be dedicated to this end (BE9811252F). At the end of 1998, the intersectoral negotiators also launched a specific discussion on the issue of workers' career "wind-down". A number of proposals were subsequently presented to government on the themes of deterring recourse to early retirement, stimulating part-time work for older workers, and encouraging age-aware personnel policies, especially in training (BE9912312F). Discussions also began with the Federal Minister for Employment and Labour in the summer of 2000 on measures to increase the employment rate of older workers. Agreements have also been reached at sector level: in healthcare, for example, workers over 45 may opt for progressive working time reductions instead of pay rises as a device to keep them in the labour force (BE0003305F). This was agreed in spring 2000. There is also evidence that the most recent intersectoral agreement has prompted similar negotiations at company level.
It is in Germany where age issues are most commonly addressed through collective bargaining. Collective agreements in Germany contain a number of regulations concerning age and/or length of service, especially at sector level (see box 2 below). In contrast, initiatives on age in the UK have tended to be employer-led, reflecting "best HR practice" rather than the outcome of collective bargaining. In the financial services sector, Nationwide has introduced initial interviews by telephone as part of its equal opportunity practice, making it harder to discriminate on age. It also focuses more on competence than formal qualifications. In five years, this building society has trebled the number of over-50s recruited. In the public sector, a number of local authorities, such as Bradford and Birmingham city councils, have taken a lead on age issues. Central government has also sought to "set an example in the way that it takes account of age discrimination issues when recruiting and employing its own staff". The requirement in the civil service management code to avoid age discrimination, first introduced in April 1996, was strengthened in July 1999.
However, UK trade unions are also increasingly pressing employers to include age in their equal opportunity policies and practices. A number of unions, including two of the biggest general unions - the Transport and General Workers' Union and GMB- are advising workplace representatives to use the code of practice outlined above as the basis for taking up age discrimination issues, eg to examine recruitment and selection procedures, training and redundancy policies for potential age bias.
Box 2. Age and collective bargaining in Germany
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Attitudes to the equal treatment Directive
Age discrimination issues are currently a key focus of EU social policy. Article 13 of the EC Treaty, added by the Amsterdam Treaty, provides explicit and specific powers for EU action to combat various forms of discrimination - including age discrimination. In November 1999, the European Commission adopted a package of anti-discrimination proposals (EU9912318F) which included a proposal for a Directive establishing a general framework for equal treatment in employment and occupation covering, among other matters, discrimination based on age, and an action programme designed to support the implementation of EU anti-discrimination legislation by promoting best practice.
The draft equal treatment Directive was subject to a political agreement in the Employment and Social Policy Council of Ministers on 17 October 2000, with formal adoption to follow once all the details of the text are finalised - the key points of the Directive are summarised in box 3 below. The European Trade Union Confederation (ETUC) welcomed the proposals as in "indispensable first step and an important tool in the fight against discrimination", but wanted to see the framework Directive supplemented by specific Directives dealing with each area of discrimination, including age, in which context the ETUC called for the deletion of the detailed provisions concerning age discrimination in the draft Directive. The Union of Industrial and Employers' Confederations of Europe (UNICE) believed that the proposals were not fully thought through and could put additional strains on EU companies without seriously tackling discriminatory practices, and that active labour market policies rather than legislation are the most effective way of promoting the employment of older workers.
Box 3. Draft EU Directive to establish a general framework for equal treatment in employment and occupation
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At its meeting on 17 October 2000, Employment and Social Policy Council of Ministers, following difficult negotiations, reached a political agreement on the draft EU Directive to establish a general framework for equal treatment in employment and occupation. The Directive should be formally adopted in the near future. The proposed Directive seeks to combat both direct and indirect discrimination on grounds of religion or belief, disability, age or sexual orientation in the areas of work and employment. The compromise text approved in October seeks to deal with difficulties raised by certain Member States, notably relating to the possibility for churches and organisations whose "ethic" is based on religion or belief to apply differences in treatment on grounds of essential, legitimate and justified occupational requirements. Furthermore, differences in treatment related to age may be justified in certain circumstances. The Directive applies particularly to:
The Directive defines the concepts of direct and indirect discrimination and lays down a minimum framework for making such discrimination illegal. It repeats the provisions of the recent Directive (2000/43/EC) implementing the principle of equal treatment between persons irrespective of their racial or ethnic origin (EU0006256F), on minimum levels of legal protection, rights of redress and sanctions. The Directive also seeks to protect workers against dismissal or adverse treatment by employers in response to any complaint or court case related to discrimination. Like the race discrimination Directive, it provides for an adjustment to the burden of proof in cases of alleged disrimination on the grounds it covers, in line with that which applies to sex discrimination cases (as laid down in Directive 97/80/EC). This means that in legal cases arising from the Directive, when the person claiming their rights have been infringed establishes, before a court, facts from which it may be presumed that there has been direct or indirect discrimination, it shall be for the respondent to prove that there has been no breach of the principle of equal treatment. The Directive will also be applicable to the non-EU Member States of the European Economic Area (EEA). The final text of the Directive is not available at the time of writing (late October 2000), but will be examined in a future EIRO EU-level feature. |
Table 2 summarises the available information on the attitudes of national governments and social partner organisations to the age discrimination provisions of the proposed Directive, as reported by EIRO national centres in summer 2000.
| Country | Government | Employers' organisations | Trade unions |
|---|---|---|---|
| Austria | No statement reported. | Broad agreement in support of present measures. Employers' organisations see key solution in economic growth, with labour market regulation supplementary and directed towards flexible working time and a reduction in non-wage labour costs for older workers. | |
| Belgium | Began moves with 1998 law against age limits in recruitment or selection. | Focus should be supply side, eg training workers to ensure they remain competitive. | In favour of better protection for workers. |
| Denmark | Does not believe that an EU Directive is the appropriate instrument in this area, and could conflict with some collective agreements on older workers policy. Directive not seen as the best way of securing older workers' rights. | Against proposals, because some age "discrimination" is a legitimate means of managing labour markets. Legislative approach will be confusing and collective bargaining is preferred. | The LO confederation is positive on the age dimension of the EU Directive, acknowledging that age discrimination is a genuine problem on the labour market. It sees some potential problems in the implementation phase. |
| Finland | Age discrimination not a problematic issue. Finland's positive stand means implementation may not be difficult, but should be left to Member States. | Although in favour of present Finnish legislation, feel this is extensive enough to make the Directive unnecessary, and it might be difficult to interpret. Better to focus on awareness and attitudes. | No statement reported. |
| France | Draft Directive one of the projects French government hopes to see through during its EU Presidency. | Oppose on grounds that Directive would increase litigation in industrial relations and be restrictive in competition terms. | Reservations concerning the legislative approach and its likely effectiveness. Awareness-raising and collective bargaining may be preferred. |
| Germany | Has not been addressed by Federal Ministry of Labour or through tripartite National Alliance for Jobs. | Labour market problems such as age discrimination should be within the competence of national-level initiatives. | Position not formulated ,as have received little concrete information on the proposed Directive. |
| Greece | Previous government interventions in the area have been limited and ineffective, so may pose problems. | Social dialogue has so far limited itself to general references to the necessity of eliminating age restrictions in the labour market, but no clear position yet formulated regarding the proposed Directive. | |
| Ireland | Should have little effect, given legislation already in force. | Favour Directive, though expect little additional impact, in a context of labour shortages. | Favour Directive, though expect little additional impact. |
| Italy | No statement reported. | Positions of unions and employers' associations vague. Age discrimination not a high priority given extensive protection of older workers in employment and in the welfare system. | |
| Luxembourg | No statement reported. | No reaction. | No reaction. |
| Netherlands | Own proposed legislation is ahead of the proposed EU framework but the Dutch system differs with a closed (limitative) approach to possible exceptions. | Disagree in principle with labour regulation but prefer the general scope of EU proposals to those of Dutch government. | Prefers Dutch government's proposals because they clearly state possible exceptions. |
| Norway | Presently evaluating and deliberating the proposed Directive, including whether it should extend to whole EEA. | Yet to consider proposals, but in past has been negative about the principle of reversed burden of proof. | Yet to consider proposals. |
| Spain | Focus should be on sex discrimination more than age, promoted through the social partners rather than regulation. | Against, as potentially distorts operation of labour markets. Focus should be on education and training, and equality between the sexes. | In favour as a means of assisting unemployed persons over 45. |
| Sweden | Positive, in context of ageing population and (public sector) labour shortages. | Negative, as should be a matter for national parties. Also reflect negative views of employers in general about hiring unemployed older workers. | Positive, to improve job protection of older employees, especially if implemented by collective agreements. |
| UK | Issued statement backing Commission's Article 13 package, but is pursuing a voluntary rather than legislative approach domestically and has serious concerns about practicalities of age provisions in the draft Directive. | Support Commission's Article 13 package in principle, but believe proposals for age discrimination legislation are "fuzzy" and unworkable and would be an unacceptable burden on business. | Support EU and domestic age discrimination legislation. Critical of exceptions to principle of equal treatment in Article 5 of the draft Directive. |
Source: EIRO national centres.
Commentary
The implications of the ageing workforce in Europe are of increasing concern to policy-makers and industrial relations practitioners at both national and European level. Governments across Europe have been developing a series of labour market policies designed to limit the extent of early retirement and to encourage the employment and retention of older workers. However, it is clear that the issue of age discrimination has yet to become accepted as a key target of equal opportunities policy to the same extent as discrimination on grounds of sex, race or disability. The nature and coverage of existing national measures against age discrimination also vary considerably across the EU/EEA, and only a few of the 16 countries covered by this comparative study have adopted a comprehensive approach to combat age discrimination in employment. At the same time, with some exceptions, age discrimination and the employment position of older workers are generally not the subject of extensive collective bargaining.
Against this background, the impact of the age discrimination aspects of the new equal treatment Directive could be considerable in many EU/EEA countries. The statutory position in Ireland and Finland may mean that the EU Directive will not require extensive change, and legislative moves in some other countries, including the Netherlands, are taking the same direction as the Directive. The UK government too has been active in addressing age discrimination issues but research suggests that the UK code of practice on age diversity is, as yet, having little impact on employment practice and, in any event, legislation rather than reliance on a "voluntarist" approach will be required by the Directive. Elsewhere, national policies on age discrimination are more piecemeal and significant legislative activity will be implied by the adoption of the Directive.
Employers' organisations across the EU 15 and Norway are generally very wary of the implications of legislation on age discrimination, preferring voluntary and supply-side initiatives to improve the position of older workers in the labour market. (An exception to this appears to be in Ireland, where distinct demographic and economic factors apply. Surveys in the UK also suggest widespread support for age discrimination legislation amongst managers.) Key employer concerns include legal uncertainty about the scope for age to be a legitimate factor in employment decisions, the prospect of extensive litigation and increased costs for businesses. The operation of existing age discrimination legislation in the USA and other jurisdictions is frequently cited as demonstrating the potential difficulties.
Trade unions tend to take a different view, seeing age discrimination legislation as a further support to collective bargaining as well as a vital social and economic measure in its own right. While few national trade union federations are reported to have developed detailed responses to the draft EU Directive, there is union criticism of the scope for age to be a legitimate ground for possible differences in treatment (as set out in Article 5 of the original draft Directive) in the Netherlands and the UK as well as at ETUC level.
This picture of limited national provision on age discrimination and divergent views between the social partners means that EU legislation on age has the potential to drive an extensive programme of national legislation across the EU/EEA on an issue which demographic trends have made one of the most important ? and, potentially, controversial ? on the contemporary employment agenda. (James Arrowsmith and Mark Hall, IRRU)