Government consults over legislation to combat age discrimination

In December 2001, the UK government launched consultations on legislative proposals to implement recent EU anti-discrimination Directives. Among other matters, legislation is required on the issue of age discrimination. So far the government has favoured a voluntary approach in this area, but evaluation of its code of practice on age diversity, introduced in June 1999, suggests it has had only limited impact. Legislation will be a complicated matter, however, hence the need for the full involvement of the social partners from the outset.

The EU Directive on equal treatment in employment and occupation (2000/78/EC) was adopted in 2000 (EU0102295F). It prohibits employment discrimination on the grounds of age, religious belief, sexual orientation and disability, and follows an earlier Directive concerned with race discrimination (2000/43/EC) (EU0006256F). The Directive covers: recruitment and selection; training; and working conditions, including dismissals and pay.

In December 2001, the UK government initiated discussion on the shape of UK implementing legislation by publishing a consultation document, Towards equality and diversity: implementing the employment and race Directives (UK0201117N). It identifies options on issues such as: the definition of direct and indirect discrimination; harassment; promoting equal treatment; advice, guidance and support; the definition and scope of any occupational requirements; and enforcement agencies.

This feature focuses on the proposals relating to age discrimination, which are due to be in place by December 2006. The government says that it will utilise the full six-year implementation period allowed for in the Directive, to allow time for the preparation of clear and workable age discrimination legislation in close consultation with employers, trade unions, expert groups and others.

Existing approaches to age discrimination

So far, the government has favoured a voluntary approach to combating age discrimination. The main elements of government policy to date have been as follows.

  • A code of practice on age diversity in employment, published in June 1999 (UK9906110N), has formed the lynchpin of the government's approach so far. It emphasises the benefits of 'diversity' in the workplace based on objective, job-related criteria in personnel decision making, centred on consideration of individual skills and abilities. The code refers to six areas of employment - recruitment, selection, promotion, training and development, redundancy and retirement - supported by case study examples and indicators of success.
  • The 'New Deal 50 ' was nationally launched in April 2000. It provides targeted practical help for people aged over 50 who have been out of work and claiming benefits for at least six months to give them the training, moral and financial support to find work. The scheme offers personal advice and job search support, a tax-free earnings top-up ('earnings credit'') of up to GBP 60 per week, and a GBP 750 in-work training grant.
  • The government established an Age Advisory Group (AAG) early in 2001. It includes representatives from the Confederation of British Industry (CBI), Chartered Institute of Personnel and Development (CIPD), Employers' Forum on Age (EFA), Trades Union Congress (TUC) and other interested parties. The AAG was introduced primarily to help in the preparation of legislation against age discrimination.
  • In December 2001, the pensions minister Ian McCartney launched a website called Age Positive to publicise government activity in this area and encourage best practice in employment. According to the Department of Work and Pensions, the Age Positive campaign 'aims to challenge employers' prejudices towards age and create a favourable climate towards age diversity among employers'. The website will publicise the government's initiatives in advance of legislation and provide access to information, guidance and case studies for employers in order to change attitudes. The minister said that the government's message was 'ability before age' and that diversity in the workplace provided bottom-line results.

Evaluation of the code

The government published the results of an official evaluation exercise of the impact of the code of practice in December 2001. The research involved repeat surveys of 800 employers and 500 older workers in the spring of 1999, early 2000, and autumn 2001. It found that:

  • age discrimination is more likely to occur in recruitment and selection than other areas of employment. It is often based on age stereotypes and tends not to be explicit. However the proportion of employers directly using age in job adverts fell from 16% in 1999 to 13% in 2001, and the number using age in selection halved to 13%;
  • age discrimination is addressed more by larger organisations, especially those with specialist human resources departments. Use of performance management techniques such as development-appraisal discussions is also widening opportunities for training. However, even where there are formal written guidelines, much depends on the awareness and attitudes of individual managers. There is evidence that they have little knowledge of age discrimination issues, especially outside of recruitment;
  • older workers appear more vulnerable to redundancy, including 'voluntary' redundancy, in part because they often cost more to employ. Flexible working options such as part-time work are limited for older workers and complicated by pensions issues. Only one in seven firms has provision for any form of phased retirement;
  • there is increasing awareness among employers of the code of practice, especially on the part of large organisations. By 2001, 33% of small firms (10-49 employees), 52% of medium-sized firms (50-249) and 59% of large organisations (250 employees) had heard of the code. Awareness among older workers rose from 13% to 21% in the two years to 2001. However, only one in five employers who had heard of the code - one in 10 in total - had actually seen it; and
  • there was also evidence that the code had little impact on practice. Even where formal policies are in place - three-quarters of employers have equal opportunity statements that include a reference to age - these are rarely communicated effectively through the management chain. Monitoring is also weak.

Problems for legislation

The research results suggest that employers are taking steps to recognise the problem of age discrimination, but that it is difficult to address in practical terms. This is because of the unique aspects of age which mean that attitude stereotyping can be particularly pervasive and entrenched. As the House of Commons Select Committee on Education and Employment noted in its report on age discrimination in employment, published in March 2001, age is qualitatively different from other equality criteria. Age discrimination has a universal character, in that it can affect any individual. It is also variable according to occupation and sector, making it less easy to detect. The research study for the evaluation of the code of practice also observed that employers and older workers alike saw a 'natural element' to age discrimination, as older workers make way for the younger generation. Legislating on age is therefore complex, as the government's consultation document has itself recognised.

Though there have been some legal challenges to age limits in the past, based on indirect sex discrimination, the new legislation will be the first time that the law will explicitly address the issue of age discrimination in employment. Two of the most significant potential problems raised in the government's consultation document are:

  • how to define legitimate exemptions; and
  • what to do about compulsory retirement.

The former refers to the distinction between unfair discrimination and objectively justifiable differential treatment (a 'genuine determining occupational requirement'). Defining this may be problematic, for example, where retailers like to match staff to customer characteristics. Employers also use age as a proxy for experience and for health and fitness. Insurers likewise use age in their actuarial calculations, varying employment costs by age for jobs such as heavy goods vehicle drivers. The government says that it would be practically difficult and too inflexible to try to define the circumstances to which the occupational requirement might apply. Instead, it proposes to provide written guidance but leave it to employment tribunals and the courts to judge particular cases.

The EU Directive has also raised a question mark over the status of compulsory retirement. In its summary consultation document, the government states that 'one important issue, for example, is whether employers should still be allowed to fix a compulsory retirement age at, say, 65.' This brought a swift condemnation from the CBI, concerned at the prospect of expensive litigation, the potential cost of 'buying out' older workers, and implications for succession planning. It seems unlikely that the government will seriously consider removing the ability of employers to impose a retirement ceiling. However, the government does place a high priority on 'progressive retirement' and there may be reforms made to pensions to facilitate this. As the employment minister, Margaret Hodge, said: 'We want to encourage more flexibility and choice for retirement with benefits to employers and employees alike. For employers, a flexible approach can be a means of reducing capacity without losing the people concerned or the qualities and expertise they bring to the business; for employees gradual retirement can be a useful way of preparing to cope with the difference between working full time and life after retirement.'

Commentary

The government has pursued the issue of age discrimination in terms of fairness and efficiency, especially given the context of demographic change in the labour market and implications for funding pensions. By 2010, almost 40% of the labour force will be aged over 45, but presently a third of people aged between 50 and pensionable age are economically inactive. Since its election in 1997, the Labour Party government has pursued a range of labour market and employment policies on age, though the complexities and implications involved discouraged the pursuit of legislation. These difficulties remain but, equally, it seems that without legislation the problem of age discrimination will not be tackled seriously by many employers.

Another issue that remains to be addressed is enforcement. The government is considering merging the various equality bodies into a single 'equality commission'. There are convincing grounds for this, to provide a single access point for integrated advice to employers and individuals. However it is vital that the government ensures that age does not take a back seat to longer-established equality priorities should this reorganisation proceed. (J Arrowsmith, IRRU)

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