New European Union laws on age discrimination, due to come into force by 2006, will have huge implications for the UK’s 28m workers. Framing the new legislation will be far from easy and, in preparation, the government will [on Thursday] embark on one of the biggest consultation exercises since Labour came to power. The Cabinet Office, which is leading the implementation of the new laws under the stewardship of Barbara Roche, minister for equality, will be treading warily.
The European directive on discrimination, which governs the introduction of the laws in member states, gives the government a reasonably free hand to determine potentially explosive issues. Two of the most contentious will be when age can be used as an employment criterion, and the question of mandatory retirement.
In both, the government has room for manoeuvre. The directive, agreed by EU member states last year, prohibits discrimination in employment on the grounds of age, religious belief, sexual orientation and disability. It follows an earlier directive forbidding racial discrimination, an area where the UK already has stringent legislation.
There is a staggered process for implementation. By 2003, the laws on sexual orientation and religious belief will have to be in place. Age and any amendments on disability must follow by 2006.
“There will be two conflicting pressures [concerning mandatory retirement],” says James Davies, employment partner at Lewis Silkin, the law firm. “The government is keen to consult with business and listen to what it has to say. For example, companies may need to know that people are going to leave at a certain age for manpower planning.
“On the other hand, the country has to do something about the ageing population and the obvious way is to encourage people to work longer. A lot of people with much to contribute are being forced out of the workforce early. If you can’t harness their input, you’re not going to be able to fund pensions.”
The government recognises the problem of falling employment among the over-50s. In the long run, failure to use the skills offered by older workers will not only put a strain on the public purse in extra benefits and lost taxes; it will also damage productivity and competitiveness.
Elaine Aarons, head of the City employment group at Eversheds, the law firm, says employers cannot ignore the issue of age discrimination just because the legislation is still some years off. Quite apart from the benefits claimed for non-discriminatory policies by advocates of older workers, there is a risk that age discrimination may indirectly lead to other legal problems. “There have been attempts to nibble at the issue through the back door by challenging whether age is also discrimination between men and women,” she says.
Age discrimination has contributed to the exodus of mature workers. But it has wider resonance, affecting other age groups, and can be associated with other forms of discrimination. Younger people can be stereotyped as flighty, nightclubbing and drained by hangovers: many companies operate pay agreements linked to seniority. Some high street clothing retailers prefer employing shop assistants who resemble the clientele they are trying to attract. Here, gender often comes into the equation.
If the EU rules prohibited only “direct” discrimination, interpretation would be a simple matter. But they go further than that, outlawing “indirect” discrimination.
The harder you look, therefore, the wider the implications. Insurers charge higher premiums for younger heavy goods vehicle drivers, deterring employers from hiring them. The directive could affect the age at which the national minimum wage should start and who should be eligible for modern apprenticeship schemes.
There is scope for interpretation. The directive recognises that age will be contentious and allows member states to adjust the rules where employers are justified in making age-related decisions. But this poses its own problems.
Sarah Best, senior policy adviser at the Confederation of British Industry, says the examples of opt-outs given are vague. “We need to be sure that the UK’s regulations are clear about what practices are allowed and what are not.”
“It is important to distinguish between blatant ageism based on unjustified social stereotypes, and employment practices which treat younger and older workers differently but which are not necessarily unfair.”
Employers argue that there are sectors where physical health is important – aircraft pilots, divers and offshore riggers for example – and physical risk escalates with age. And, while there is a need to challenge stereotypes, employers often find workers peak in the middle of their careers and can lose motivation in later life.
Employers, therefore, want to be free to fix retirement ages, arguing that where older staff lose motivation and pay is linked to seniority, there can be a mismatch between performance and pay. Younger workers may also find it difficult to progress as a result.
The CBI believes that retaining this right will avoid problems that have emerged in the US, where the mandatory retirement age has risen from 65 to 70 and employers have tried to buy out older workers with big retirement packages.
This is arguable. The legal profession is one of the few areas where employers are setting precedents – and with relatively little fuss. This year, the Bar imposed its own formal ban on age discrimination, ruling that barristers’ chambers should not refuse to take on new tenants because they were too old. The move came after people coming to the Bar as a second or third career complained that they were not even being considered for tenancies.
The consultation on the Bar’s proposed ban highlighted many of the objections employers are likely to raise to the new age discrimination laws – and some are better founded than others.
“People were confusing age with experience,” says Laura Cox QC, chairman of the Bar Council’s equal opportunities committee. She stresses that the Bar’s ban applies to discriminating on age grounds alone. If there is a valid reason for wanting someone with a given level of experience, there is nothing to stop that being a criterion for the job, even if it in effect imposes a minimum age limit.
Once such details had been explained, there was remarkably widespread acceptance of the principle. Ms Cox says “There was hardly any of that old throwback “it’s all about political correctness” resistance; we didn’t get that hostility at all”.
“Financial Times” 10th December 2001
