Source: CPID
Date: May 2006

This factsheet gives introductory guidance. It:

• introduces the forthcoming statutory regulation
• explains about employment practices which do not discriminate on the grounds of age
• sets out recommendations and an action plan for avoiding the use of age and age-related criteria in employment
• concentrates on discrimination against older workers
• includes the CIPD viewpoint.

What is age discrimination? 

Although there is no statutory definition of age discrimination as yet in the UK, age discrimination can be explained as occurring when someone treats a person less favourably because of that person’s age, and uses this as a basis for prejudice against and unfair treatment of that person. 

Age discrimination in employment can:

• affect anybody regardless of how old they are
• reduce employment prospects for older people, younger people and parents returning to work after a period of full-time childcare
• favour people in the age group 25 to 35
• prevent the full consideration of abilities, potential and experience of employees.

Our recent survey1 found that age discrimination remain a significant problem in the workplace with 59 per cent of respondents saying they have been disadvantaged because of their age. 

The legal position 

Age discrimination is the main area of discrimination which is protected in some other countries but which is currently not directly protected in the UK. This will change from 1 October 2006 when the government will introduce age discrimination legislation – the final version of the regulations was published on 9 March 20062. The October date is in advance of the December deadline set by the Equal Treatment Framework Directive (2000/78/EC) which requires the UK to implement national legislation preventing age discrimination. 

Age discrimination can take many forms. In legal terms, it will follow the same pattern as existing forms of discrimination law in the UK, namely direct and indirect discrimination, victimisation and harassment. CIPD members can find details of the new regulations and their legal implications for employers, including the transitional procedures for retirements, in our Age discrimination and retirement FAQ in the Employment Law at Work area of our website. 

Go to the Age discrimination and retirement FAQThe Age Partnership Group (APG), of which CIPD is a founder member, is funded and co-ordinated by the Department for Work and Pensions (DWP). It is comprised of organisations that represent the different needs of small, medium and large employers, as well as those who work directly with or provide information to employers and employees. APG has issued guidance3 which lists 10 key points about the new regulations: 

Age regulations are due to come into force on 1 October 2006. The regulations cover employment and vocational training. This includes access to help and guidance, recruitment, promotion, development, termination, perks and pay. The regulations cover people of all ages, both old and young. All employers, providers of vocational training, trade unions, professional associations, employer organisations and trustees, and managers of occupational pension schemes will have new obligations to consider. 

Goods, facilities and services are not included in the regulations. Upper age limits for unfair dismissal and redundancy will be removed. A national default retirement age of 65 will be introduced making compulsory retirement below age 65 unlawful (unless objectively justified). 

All employees will have the ‘right to request’ to work beyond the default retirement age of 65 or any other retirement age set by the company and all employers will have a ‘duty to consider’ requests from employees to work beyond 65. Occupational pensions are covered by the regulations, as are employer contributions to personal pensions. However, the regulations generally allow pension schemes to work as they do now. The regulations have more details. The regulations do not affect state pensions. 

In June 1999 the Government published a voluntary Code of Practice Age diversity in employment4 together with implementation guidance and case studies to show how a number of employers have tackled age discrimination. The Code sets out good practice principles to adopt in recruitment, selection, promotion, training and development, redundancy and retirement and reflects the advice given in this factsheet. There is growing evidence, through initiatives such as Age Positive, that UK employers are already taking voluntary action to regulate their own working practices. 

The business case 

It is estimated that age discrimination costs the economy between £19 and £31 billion a year in lost output. To be successful in an increasingly competitive market place, organisations need to attract and retain valuable employees and develop the talents of all their employees. 

Some key points:

• More people are living longer, active and healthier lives5.
• Evidence shows that differences in absenteeism between age groups are slight.
• Older workers stay in their jobs longer than younger people.
• Age discrimination leads to under-achievement, reduced self-confidence and motivation, lower self-esteem and loss of personal income and status.
• Findings from many studies show that younger and older workers are on average equally effective in their work.
• Research shows that, given the right training, older people are just as capable of learning new skills as younger people.

As life expectancy increases and the birth rate remains low, the proportion of the population aged over 65 will increase dramatically. Older people will become an ever more significant proportion of the population and society will increasingly depend upon the contribution they can make. In their publication Opportunity age: meeting the challenges of ageing in the 21st century6 the DWP gives details of the demographic shifts that are expected over the next few decades. The Government has stated that the best way to offset the impact of future changes in the age structure of society is to reduce levels of inactivity. Around 1 million people choose to work beyond state pension age already and the Government aspires to encourage a million older workers to do so, thereby maintaining the ratio of workers to non-workers in the economy at about the same in 2050 as it is now. Research information1 shows that there is a keen appetite amongst older employees for flexible working and flexible pensions and statistics indicate that activity levels for older female employees are expected to continue to rise. 

Recommendations for employers 

Employers need to prepare now for the new legislation by bringing all their policies and procedures into line with the new requirements, and seeking advice where necessary. Many employers have already taken action on age discrimination as a way of keeping ahead of their competitors and some companies, including B&Q, Asda, HBOS, Barclays Bank, GlaxoSmithKline and Nationwide, have adopted policies specifically to attract older workers. 

Age discrimination is a pervasive issue and the challenges of tackling it and ‘age proofing’ employment policies and practices are complex and take time. Each stage of the employment cycle should be examined as discrimination can occur throughout a person’s working life. All those involved in making decisions about the employment and training of people need to understand the implications of age-stereotyping. 

Recruitment and selection 

Age, age-related criteria or age ranges should not be used in advertisements other than to encourage applications from age groups which do not usually apply. Where this is the case, it should be clearly stated. 

It is desirable to state that age criteria will not be taken into account in employment decisions but used only for monitoring purposes. This information can be asked for in a ‘tear-off’ section of the application form and be kept separate from the application process. 

Interviewers and those concerned with selection must not be subjective on the basis of physical characteristics and unfounded assumptions, and must ensure their decisions are based on objective criteria, relevant to the job and merit. 

Medical advice 

An individual’s age should not be used to make judgments about their abilities or fitness. Where such a judgment is required, an occupational health or medical practitioner should be consulted. 

Reward 

Pay and terms of employment should not be based on age, but should reflect the value of individual contributions and standards of job performance. 

Training and development 

All employees should be eligible for training and development programmes as there is the potential to waste talent if particular age groups, eg those near retirement, are automatically excluded. 

Retention and redundancy 

When releasing employees, the organisation’s future needs for knowledge, skills and competencies should be taken into account – the ‘corporate memory’ needs protection. 

Alternatives to redundancy should be considered, such as shorter hours, part-time working, contractual arrangements, secondments and perhaps employment breaks. 

Retirement 

Alternatives to retirement may be considered, such as shorter hours, part-time working, contractual arrangements, secondments and perhaps employment breaks. 

Seventy per cent of 50-year olds stay on in work until state pension age. Research from CIPD1 indicates that many older workers would welcome an opportunity:

• for phased retirement for flexible working
• to work beyond the normal retirement age
• to work on a self-employed basis
• to work in the voluntary sector.

Organisations should also consider the advantages of using retirees as mentors to pass on experience and develop other employees through use of their knowledge and expertise. Our research shows that many organisations do this. 

An action plan 

Review 

Scrutinise all personnel policies, practices and procedures because age discrimination can:

• occur anywhere in the employment cycle from recruitment to redundancy
• be blatant or subtle, direct or indirect.

Policy

• Implement policy as part of an approach to diversity and equality.
• Use only objective criteria essential for satisfactory performance, and ensure these can be objectively justified.
• Communicate policy to all managers and employees, and offer training where necessary.

Stance and key actions

• Undertake an age audit.
• Do not rely on age, age guidelines and age-related criteria.
• Challenge the use of age and age-related criteria in every aspect of employment decision-making.
• Educate and train all staff about the implications of age discrimination.
• Use dates of birth only for monitoring purposes and administration. Give written assurances on this to gain the confidence and trust of job applicants and ensure staff making employment decisions follow this commitment.
• Monitor the age profile of the organisation at regular intervals to identify evidence of unfair discrimination against particular age groups.
• Consider ways of making sure that all age groups have access to development and promotion opportunities.

CIPD viewpoint 

CIPD is committed to the removal of age discrimination in employment because it is wasteful of talent and harmful to both individuals and organisations. The use of age, age bands and age-related criteria reduces objectivity in employment decision-making and increases the likelihood of inappropriate decisions. 

Employment decisions based on age are never justifiable because:

• age is not a genuine employment criterion
• age is a poor predictor of performance
• it is misleading to equate physical and mental ability with age
• when age is used, it tends to be a proxy for underlying factors, such as health or ability to drive, for example.

The efficient and effective use of people’s skills requires that employment decisions should be based on competencies, qualifications, skills, potential and objective job-related criteria obtained through careful analysis of job requirements and job performance. 

CIPD believes there is an important business case for employers to take action to remove age discrimination and has undertaken research and published guidance to raise awareness and educate personnel practitioners and employers about the issues involved. Organisations need to understand this business case and appreciate how competitive benefits can be gained from developing good practice. This will motivate them to implement progressive change and interpret the impending legal duties in positive ways which go beyond a minimum approach to compliance. 

Although CIPD recognises that the law can help to effect change in employment practice, self-regulation based on increased understanding is favoured as the best way to encourage employers to deal with age discrimination. 

References

• CHARTERED INSTITUTE OF PERSONNEL AND DEVELOPMENT and CHARTERED MANAGEMENT INSTITUTE. (2005) Tackling age discrimination at work: creating a new age for all. London: CIPD. Available at: http://www.cipd.co.uk/surveys Equality and diversity: age discrimination in employment and vocational training [online]. (2006) London: Department of Trade and Industry. Available at: http://www.dti.gov.uk/employment/discrimination/age-discrimination/index.html
• AGE PARTNERSHIP GROUP. 20 key facts your business needs to know. London: Department for Work and Pensions. Available at: http://www.agepositive.gov.uk/newsDetail.cfm?sectionid=44&newsid=590
• DEPARTMENT FOR EDUCATION AND EMPLOYMENT. (1999) Age diversity in employment and Age diversity in employment: guidance and case studies. Code of practice. Nottingham: Department for Education and Employment. Current version available at http://www.agepositive.gov.uk/
• SEAGER, A. (2006) Government statistician counts on us living and working longer. The Guardian. 13 January. Available at http://business.guardian.co.uk/story/0,16781,1685360,00.html
• DEPARTMENT FOR WORK AND PENSIONS. (2005) Opportunity age: meeting the challenges of ageing in the 21st century. London: DWP. Available at: http://www.dwp.gov.uk/opportunity_age/

Further reading 

Journal articles

• SMETHURST, S. (2006) State of mind. People Management. Vol 12, No 1, 12 January. pp.24-29.
• SUFF, R. (2004) Using age-diversity policies to attract and retain older workers. IRS Employment Review. No 808, 24 September. pp42-48.
• VICKERSTAFF, S. (2005) Managing the older workforce. Equal Opportunities Review. No 137, January. pp6-10.