Old enough to know better? The effect of new anti-ageism legislation on hiring and HR practices A white paper produced by specialist employment lawyers, Glovers, in association with Nigel Lynn G L O V E R S
Introduction Recruiting and retaining the right staff remains a key issue for many organisations an issue that has become even more of a challenge with the ever increasing range of employment related legislation. The Employment Equality (Age) Regulations 2006 come into force on 1st October 2006 and is potentially the biggest change in employment law since the Sex Discrimination Act in so much as it affects every single employee and potential employee. In summary it will be unlawful to advertise for, employ, train, promote or dismiss someone on the basis of their age. It is important to appreciate that the law will cover the whole employment relationship including recruitment, training, promotion, retirement and redundancy. And, crucially, it covers all workers not just employees. Why is the law changing? The UK has an ageing workforce. A decreasing birthrate coupled with increased life expectancy means that by 2007 there will be more people over state pension age than under 16 years of age The UK has an increasing economic dependency ratio. The support ratio of worker to non-worker is currently 4:2, by 2031 it is anticipated that this will rise to 2:6 The UK has underperforming pensions and there is now a general acceptance of the need to work longer particularly in view of longer life expectancies Background Employment law is a complex area and full of pitfalls especially for SME owners who may not have the luxury of a dedicated HR department. Organisations have to ensure, not only that they are completely up to date with the never ending flood of legislation, but also that they have policies and procedures in place to enable an effective defence against any claims by employees. When age discrimination legislation was introduced in the USA, there was a 40% jump in employment tribunal claims and in Ireland, age is now the basis of 19% of all employment cases. Against this backdrop, recruitment practice policy and procedure have become crucial issues not just in terms of recruitment and HR but also in terms of corporate reputation. page 2 of 7
page 3 of 7 Impact on Hiring Practices With The Employment Equality (Age) Regulations impacting directly on the hiring process, HR professionals and all others responsible for recruitment will have to ensure that the letter of the law is applied right from the concept phase of a particular recruitment requirement - from the creation of the job specification through to how the vacancy is communicated, the application form, interview and offer. Avoid the use of mature or dynamic in recruitment advertisements Avoid asking for a number of years experience as this may be construed as discriminating against younger candidates focus on the skills needed instead It is safer for application forms not to ask for dates of birth or age related information If asking for graduates make sure that it is obvious that graduates of all ages are welcome to apply Be careful about the use of images in your advertisements and in your recruitment brochures are the people portrayed all young or mature? You need to demonstrate a mix. Just because you may have a young team, this does not mean that you can recruit the same sort of age to fit in. Recruitment is about people and given a range of candidates with similar experience and qualifications, decisions will often be made by line managers according to their gut feel, choosing the person who they think will fit best into their team. In a tribunal, this would be a dangerous argument. Employers may argue that they have an older workforce and need to recruit a younger employee to replace someone who is due to retire. To do this, the employer will need to provide evidence that succession planning works effectively in their organisation and is not discriminatory. page 3 of 7
page 4 of 7 Impact on Training, Career Development and Promotion Policies To be compliant with the new legislation, training and career development schemes within the organisation must be age neutral and promotion must not be offered on the basis of age: Ensure that graduate training schemes are open to all ages and not limited to those joining straight from university Do not exclude older age groups from training schemes because you think they are not interested in career development Criteria for training must be based on skills and competency rather than age or length of service. Staff should not be promoted based solely on length of service Consider age discrimination awareness training for employees Impact on Pay and Benefits The criteria for deciding pay scales may potentially discriminate against younger employees if the focus is on length of service or experience. Employers need to be able to justify using these criteria by taking into account other factors in their assessment such as performance. Do not use age as a basis for fixing starting salary Service related benefits, such as increased holiday entitlement can be based on length of service as long as that length of service is five years or less. If the length of service is longer than this then the increased benefits must be objectively justified. For example, when increased holiday is related to last years performance. Medical cover must not have an upper age limit Do not set maximum ages for entitlement to sick pay Age limits on entry and exit to pension schemes are exempt page 4 of 7
Impact on Redundancy, Retirement and Dismissal Selecting people for redundancy or early retirement purely on the basis of age will be unlawful and the upper age limit for claiming unfair dismissal will be removed under the new legislation previously claims could not be brought by employees who were over the age of 65 or over their usual retirement age. There will be a national default retirement age of 65 however all employees will have the right to request to work beyond retirement and employers must follow a duty to consider procedure. Under duty to consider, the employer must write to the employee not less than 6 months but no more than 12 months before the planned retirement date notifying them of the intended retirement date, their right to request to continue working and the employer s duty to consider such a request. If the employer fails to inform the employee of their right to request to continue working then there is a definite case for unfair dismissal Redundancy pay or redundancy selection criteria based on age or length of service is likely to be unlawful Other Issues Born too late? Remember that age discrimination applies to any age. A recent snapshot survey by Nigel Lynn asked 158 accounting staff in their twenties whether they had ever been discriminated against in the workplace because of their age. Over half felt that they had. Comments included: I ve been passed over for promotion recently. I was told that although I was perfectly capable of doing the job, the supervisory aspect needed someone who was a little older. Another was told by his boss: Maturity is essential to success in business. Much of the media coverage so far has centred on older employees but discrimination on the basis of age whether that s 16 or 60 will be illegal Review your employment policies Remove age related criteria and ensure that age discrimination, harassment and victimisation are included as behaviour that will not be tolerated in the organisation in any policies. page 5 of 7
Conclusions Age discrimination in any form can be construed quite simply as a waste of talent and the recruitment industry can take a definite lead in debunking many of the traditional assumptions that underpin attitudes towards age and work. As Mark Twain so aptly put it, Age is an issue of mind over matter. If you don t mind, it doesn t matter. The challenge ahead is clear. HR professionals and SME owners will come under increasing pressure to keep abreast of legalities relating to recruitment and retention. As existing legislation evolves and new legislation is introduced, issues surrounding employment practices are likely to become more complex. Nigel Lynn and Glovers are committed to providing a timely series of white papers to help you understand the impact on your business. About Nigel Lynn Established in 1990 Nigel Lynn has long been the UK s largest independent specialist in both permanent and temporary accounting and finance recruitment. In August 2005, Nigel Lynn became part of Premier Group, Ireland s largest and most successful recruitment company. Its country-wide network of offices is staffed by professionals with close ties to local communities and unrivalled knowledge of job opportunities, skills shortages, remuneration levels and candidate availability. www.nigellynn.com About Glovers Glovers is a specialist firm of lawyers with a very strong reputation in the field of employment law. Its employment department advises on a wide range of issues including contracts of employment, termination of employment, direct and indirect discrimination, special requirements relating to redundancy, the use of compromise agreements, the pursuit and defence of employment tribunal and court claims and the obligations placed on employers who are selling or purchasing a business. www.glovers.co.uk page 6 of 7
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