It has been described as the most complex piece of employment legislation introduced since the Labour government came into office in 1997.
The measures to outlaw age discrimination in the workplace have been long-anticipated. A consultation document has now been issued to outline the UK government’s take on the European Employment Directive. It will become law in October 2006.
The draft, which is open to consultation until 17 October 2005, sets out a number of proposals, including:
– A ban on age discrimination in recruitment, promotion and training
– A ban on all retirement ages below 65 – except where objectively justified
– The removal of the current upper age limit for unfair dismissal and redundancy rights.
Personnel Today has consulted HR professionals, employers’ groups, lawyers, unions, special interest groups and recruitment firms to find out what the legislation will mean for them. Ross Bentley reports
John Cridland, deputy director-general at the CBI, broadly welcomed the proposed regulations, but raised concerns about the failure to exempt all length-of-service benefits from the draft regulations.
“Companies that currently reward long-serving employees through enhanced sick pay and holiday allowances could risk age discrimination claims from younger employees who have been with the firm for less time. In these circumstances, firms might be forced to withdraw this kind of benefit,” he said.
David Yeandle, deputy director of employment policy at manufacturing and engineering group EEF, was disappointed the government had yet to decide on a future formula that will be used for calculating statutory redundancy pay.
“This must be resolved quickly and in a way that does not impose additional costs on employers,” he said.
John Maxted, managing director, Digby Morgan, said: “While many businesses have established diversity functions, others require a change of culture.
“We are working with clients to open their minds. I think there is a prevailing culture in the UK that employers prefer to take on people who have their best years ahead of them rather than those who may have already reached their peak.”
Hugo Tucker, managing consultant, Ortus HR, said: “Companies would benefit immensely from broadening their selection criteria. It will help both our causes. We will have a larger workforce to choose from and they will have the pick from a bigger field.”
Stephen Robinson, a senior solicitor at law firm DWF, said the age laws were “the most far-reaching piece of employment legislation introduced in the past eight years”.
“Employers will have to adopt a different mindset and will have to look at all areas of employment, including recruitment, salaries, training and promotion,” he said.
“The last piece of legislation to have this impact was the Disability Discrimination Act, and it’s taken 10 years for employers and lawyers to get their heads around it. I expect the same type of bedding-in period for this legislation. It’s now being looked at by employer groups prior to consultation and it may be that we will see a slightly watered-down Act next year.”
Julie Quinn, partner at law firm Allen & Overy, said the legislation fitted in well with other forms of anti-discrimination law.
“Many of the concepts are borrowed from laws on sex and race and the wording about what is harassment and what is direct and indirect discrimination have been borrowed,” she said. “It is a radical law in terms of the cultural shift companies are being asked to go through. The shift will be immense. I think a lot of people are waiting for this because it doesn’t just affect a minority group. I can see a lot of claims coming from this.”
Special interest groups
Keith Frost, business manager at Help the Aged, felt the draft concentrated far too much on employment issues and not enough on training.
“Arbitrary age ceilings on apprenticeships and technical qualifications mean that most people between 30 and 60 who want to retrain and launch a second career can only do so if they can pay the costs out of their own pocket,” he said.
“The announcement on age discrimination regulations will do nothing to inject reality or urgency into retraining policy.”
Sam Mercer, director of the Employers Forum on Age, said the age proposals still left significant areas of concern for employers, including insured benefits and redundancy compensation.
“In future, employers will have to provide the same insured benefits to any employee at any age, yet insurance costs increase dramatically after 65,” she said.
“People at different ages currently receive different rates of redundancy compensation. This will change and everyone will get the same,” she said.
Top tips on how to comply with age discrimination law
– Audit all policies and procedures, especially the tone and wording of your job advertisements- Make sure your training is open to everybody, regardless of age
– If you have pay and benefits schemes based on age and length of service, check to see how they stand in the terms of the new law
– Think laterally. For example, don’t just look at the wording of your job ads but where you are advertising – if you are limiting your campaign to student magazines, for instance, you run the risk of a claim against you
– Ensure staff on recruitment panels and promotion committees are aware of the principles of the law
– Line managers need to be especially aware of the law – many employee claims will be related to harassment and victimisation
– Get management buy-in to comply with the law – if you identify a problem, they must be prepared to deal with it immediately
Source: DWF and Allen & Overy
Becky Mason, people network manager, BT, said: “Last year, we carried out a company-wide audit using a tool provided by the Employers Forum for Age. It covered all aspects of HR – from recruitment and management style through to learning and redundancy – so we have some knowledge of where we stand.
“Following the draft proposals, we can now go back and review where we are, decide what we need to change, gather evidence and formulate an action plan.
“The new law questions ingrained attitudes about age and raises questions about the right criteria to assess people on.”
Liz Fraser, HR director, Weber Shandwick, said: “The areas we need to think through are the wording on our recruitment ads and our benefits packages. Because we have a young workforce, with the bulk of our people aged under 30, we need to be careful with our recruitment advertisements both in magazines and on the internet.
“I also need to talk to our benefits and pensions consultant – we haven’t really got to grips with how this legislation will affect this area.”
TUC general secretary Brendan Barber said the draft was a missed opportunity to extend choice by giving people more control over not just when they finally give up work, but to establish new routes to retirement.
“These regulations could have gone much further by ending arbitrary age-based retirement,” he said. “We are also concerned that the right to request to work beyond employer-set retirement ages is too weakly drawn.”
Did you know…
– 64% of HR job advertisements are potentially age discriminatory, according to a survey by law firm DWF
– £30bn is the amount the one million inactive older people could contribute to the UK economy, according to an Age Concern report
– 82% of UK employers are unprepared for the age discrimination legislation, according to the Hay Group HR consultancy
HR Directors Club Age Workshop
The Personnel Today HR Directors Club is running a workshop on age in London on 15 September. For details e-mail email@example.com