CIPD - Age and employment

Diversity and equality

Revised October 2008

This factsheet gives introductory guidance. It:

introduces the basics of age discrimination legislation
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
includes the CIPD viewpoint.

What is age discrimination?

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
prevent the full consideration of abilities, potential and experience of employees.

Our survey Tackling age discrimination at work, carried out before the 2006 legislation came into force, found that age discrimination was a significant problem in the workplace. Fifty-nine per cent of respondents said they had been disadvantaged because of their age.

See the survey report

The 2006/7 statistics from the Employment Tribunal Service show that in the first six months after the 2006 legislation came into force there were only 972 age discrimination claims presented in tribunals. However the number of age discrimination cases is expected be much higher in next year’s figures.

The legal position

The Employment Equality (Age) Regulations 2006 came into force in October 2006 to comply with the European Equal Treatment Framework Directive (2000/78/EC). These regulations mean that age discrimination in employment is unlawful in the same way as discrimination on gender, race, disability, sexual orientation or religion and belief. Some countries, for example the USA, have had age discrimination legislation for many years. However the UK legislation protects people of all ages, unlike the law in the USA which only protects those over 40.

Age discrimination can take many forms. In legal terms, it broadly follows the same pattern as existing forms of discrimination law in the UK, namely direct and indirect discrimination, victimisation and harassment, although there are some differences. The regulations have also had a wide impact on other areas of employment law including unfair dismissal and redundancy provisions.

CIPD members can find details of the new regulations and their legal implicatons for employers, in our Age discrimination and retirement FAQ in the Employment Law at Work area of our website.

Go to the Age discrimination and retirement FAQ

Some key points:

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.
The regulations do not just apply to all employers, but also to providers of vocational training, trade unions, professional associations, employer organisations and trustees, and managers of occupational pension schemes.
Goods, facilities and services are not included in the regulations, although a group of non-governmental organisations such as Age Concern have been working on proposals to combat age discrimination in access to goods and services for some time.
The pre-October 2006 upper age limits for unfair dismissal and redundancy no longer apply.
6. A national default retirement age of 65 applies making compulsory retirement below age 65 unlawful (unless objectively justified). This has, however been challenged at EU level.
All empoyees have the ‘right to request’ to work beyond the default retirement age of 65 (or any other justified retirement age set by the organisation). All employers must give advance notice of an approaching planned retirement date and must follow the ‘duty to consider’ procedure to address those requests.
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 did before.
The regulations do not affect state pensions.

Other important points include:

Unusually, both direct and indirect age discrimination can be justified if the treatment or provision, criterion or practice in question is a proportionate means of achieving a legitimate aim, though most employers will find this difficult. This contrasts with other forms of discrimination where usually only indirect discrimination can be justified.
Length of service requirements for employment benefits practices of five years or less enjoy a special exemption and are deemed not to be unlawful age discrimination.
Length of service requirements for employment benefits practices of periods longer than five years may also be justifiable if the employer can show that they have awarded the benefit to reward loyalty, to encourage motivation, or to recognise the experience of a worker.
In 2011, the default retirement age will be reviewed by the Government to consider whether it is still necessary to maintain a default retirement age at 65, or any at all.
Amendments incorporated into the Employment Rights Act 1996 so that dismissal at a justified retirement age (usually 65) in specified circumstances will be a potentially fair reason for dismissal.

In June 1999 the Government published a voluntary Code of Practice Age diversity in employment¹ 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. Some employers took action in advance of the regulations to remove age limits and tackle age discrimination as they realised that there were significant business benefits to be gained by removing bias in employment policy and practice.

Currently Acas is the nominated agency to give advice and guidance on age issues and the new Equality and Human Rights Commission (EHRC) will also be working to support (and challenge) employers.

The business case

In the past it was estimated that age discrimination cost the UK economy between £19 and £31 billion a year in lost productivity, though the cost today is probably much higher. 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 lives².
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, despite immigration. The same is happening all over Europe and in many other countries. 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 century³the Department for Work and Pensions (DWP) gives details of the demographic shifts that are expected over the next few decades. The Government have 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 comply with the legislation by checking that all their policies and procedures are in line with the 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 not just to attract older workers specifically, but to move to an age neutral approach.

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. This is known as positive action and is lawful. However, positive discrimination is unlawful, so employers should ensure that all ages are treated fairly throughout the recruitment process.)

Age criteria should never be taken into account in employment decisions but should be gathered 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. Failure to have good management data could count against employers in an employment tribunal.

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. The age regulations make it unlawful to base decisions on appearance or perceived age, whether that is older or younger.

Medical advice

An individual’s age should not be used to make judgements about their abilities or fitness. Where such a judgement is required, an occupational health or medical practitioner should be consulted. Age should not be used as a factor in physical test requirements.

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. CIPD members can find more information and advice in our factsheet Age discrimination: reward policies and procedures.

Go to our Age discrimination: reward policies and
procedures factsheet

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.

Promotion

In Ireland where there has been similar age legislation for some years, their experience has shown that employers need to apply the same rigour to promotion policies as are applied to recruitment.

Staff retention

There is considerable evidence that flexible working patterns support retention and encourage return to work – see our flexible working factsheet for more information.

Go to our factsheet on flexible working

If your organisation encourages flexible working or promotes work-life balance, this should be available to all ages groups. It would be unlawful to offer flexible working arrangements such as shorter hours, part-time working, secondments and, perhaps, employment breaks, just to older workers.

Redundancy

When releasing employees, the organisation’s future needs for knowledge, skills and competencies should be taken into account – the ‘corporate memory’ needs protection. Many organisations in the past have found it ‘easier’ to use ‘last in-first out’ (LIFO) as a method of selecting for redundancy. This is likely to be unlawful as it may be indirectly discriminatory, with younger workers being made redundant ahead of older workers. Coaching and mentoring are just some of the techniques that will ensure your business does not lose skills.

Retirement

Requests to work beyond retriement age must be properly considered.

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.

A number of employers chose not to implement the default retirement age of 65 after the regulations were introduced and have managed without a retirement age. They have not experienced any problems with workers who have chosen to stay on, but managing without a retirement age does require a robust and effective performance management system.

An action plan

Review

Scrutinise all your organisation's policies, practices and procedures – even those that are not labelled 'personnel' - 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 inclusion.
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 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 appreciate how competitive benefits can be gained from developing good practice. This will motivate them to implement progressive change and interpret the 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, understanding the business case for removing unfair age discrimination plays a key role.

Useful contacts

Acas
Helpline: + 44 (0) 845 747 4747
Age Positive
Department of Business, Enterprise and Regulatory
Reform
Employers Forum on Age
Equality and Human Rights Commission
The Age and Employment Network

References

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/

Age and employment