Age Discrimination - Over 50 - not over the hill

Who were the big hits at Live 8? The Who were. As were Pink Floyd, Paul McCartney and Elton John, most of whom could have dispensed with costly helicopters to travel to Hyde Park and used their bus passes on the local bus routes.

Arguably, the biggest mainstream live concert draw so far this year has been The Cream Reunion at the Royal Albert Hall in May. Ginger Baker, Jack Bruce and Eric Clapton split up seven years before Robbie Williams was even born.

It all goes to show that you are never too old to rock and roll. Just ask Mick Jagger or Keith Richards from The Rolling Stones. Clearly, when it comes to music, we are learning not to discriminate on the basis of age. But what about the rest of society? And what about the work place?

Rarely does a week go by without a headline-grabbing story in the newspapers about an employment tribunal. The case will usually be the result of alleged sex or race discrimination, with plenty of scope for lurid and compelling coverage. The result is often the award of an eye-popping amount of money in compensation.

Fair-minded people accept that discriminating on the basis of gender, sexual orientation or race is not acceptable. Employers, nudged along by statute, have largely come to accept this, with legal cases usually triggered by differences of interpretation or the inappropriate behaviour of individuals.

But what about discrimination on the basis of age? Are we ready and able to recognise and accept age discrimination as the latest form of unacceptable behaviour?

We had certainly better get used to the idea. Age discrimination in employment and vocational training will become illegal in October 2006, when the Age Discrimination Act comes into force. This legislation will cover all forms of age discrimination and will outlaw discrimination not just against older individuals, but against the young as well.

In addition to the general thrust of the act, the aim of the legislation is that it should also: set a default retirement age of 65, but also create a right for employees to request working beyond a compulsory retirement age, which employers will have a duty to consider; ensure close monitoring of the retirement provisions so that evidence is available for a formal review of age discrimination five years from implementation; and allow employers to justify earlier retirement ages if they can show it is appropriate and necessary.

This is not an issue that can be ignored. Senior managers and personnel professionals in the insurance industry need to accept that an employer's treatment of their staff will be subject to intense scrutiny. When it comes to the potential for age discrimination, we need to learn how to identify it, how to manage it and how to prevent it.

Companies should already be scrutinising their attitudes and practices on issues such as recruitment, employment, training, redundancy and retirement. Insurers, brokers and loss adjusters need to consider: recruitment, personnel management; succession planning; training; redundancy; and retirement

Are current recruitment procedures legally compliant? Can the company be confident that people are not being excluded from short lists on the basis of age? Will recruitment advertisements and job-specifications meet the new requirements?

Will employment contracts and other documentation need to be redrafted to reflect the contents of the legislation?

The impact of the legislation on succession planning is an area that could be overlooked. However, if a succession plan was put into effect and proved to contravene the discrimination rules, the effect on the company as a whole could be damaging. Clearly, it is important to ensure that potential appointments within a plan comply with the stipulations of the act.

And there is the other perspective: if there is no compulsion to retire, how do you manage the needs and ambitions of all those waiting for 'dead man's shoes? You do not want a surfeit of frustrated talent that could provide rich pickings for a competitor.

The new framework requires training and development to be an 'equal opportunity' enterprise. So is everyone on your payroll treated the same way when it comes to long-term personal development?

The act makes specific reference to how redundancy terms may be framed (for example, the lower age limit for eligibility falls from 20 to 18). Companies must be up to speed with the details and know how quickly these changes can be put into effect.

Companies must also be able to employ people aged over 65 or come up with persuasive reasons why a different age limit is justifiable.

These areas are the main points of concern - and they give rise to many other questions. For example, will it be legal, after the legislation comes into force next October, to run schemes for graduates that specifically put young recruits on a fast-track system of training and development?

The war for talent

Our industry is engaged in a 'war for talent', seeking to lure the cream of each generation, rather than seeing them go into accountancy or the legal profession. How does the industry achieve this within the context of age discrimination legislation? What are rival professions doing? Are we maximising our competitiveness without compromising our ability to be compliant?

It is worth stressing that this aspect of personnel management should be a boardroom priority. Be assured that, if it remained purely with the human resources department only for problems to arise subsequently, the board would soon take a very close interest. Better, then, to push the subject up the agenda and to get top-level agreement for corporate approach and strategy.

Legislation that bans certain practices and requires others to be adopted can easily be viewed in a negative fashion. After all, the imperative is to achieve compliance and avoid penalties. But it would be wrong to think of this area as without potential benefit.

After all, the legislation has not been introduced with the aim of making life more difficult; nor is its intention to make the work place less pleasant or rewarding. It may increase the workload of personnel departments, but that is only a practical consequence of the changes being made.

The aim is to enrich the employment market and eradicate any unfairness or outmoded practices. The legislation is intended to create a workforce that reflects the society within which businesses operate. That, by any objective measure, must be a good thing.

Looking on the bright side

Anecdotal evidence suggests that customers instinctively trust older people. They enjoy the experience of dealing with them, provided they maintain standards of efficiency and effectiveness. This is why certain DIY chains, supermarkets and call centres have deliberately recruited older people in customer-facing situations.

This might qualify as age discrimination in future, but the principle is sound - older can equal gold, or at least 'grey pounds' and 'silver spenders'. In other words, do not worry about what you are going to do with more mature employees. Rather, think how you can exploit their abilities, experience and attributes.

Remember, unless yours is a highly specialised company working in a particular market sector, you will have customers of all ages. Why not build a workforce that aligns with the demographic reality?

Even broadly based insurance companies segment their offerings in line with different customers' needs - motor insurance has age discounts, guaranteed acceptance life assurance is for the 50-plus market, home insurance can be cheaper for those at home all day. Why should those customer groups being targeted with such products not deal with their peer group if they decide to buy?

The most important thing for companies to take on board - and, as mentioned, at board level - is that the structure and legal framework of society is changing, and so too is the work place. Most of those working today will remember an environment in which people were over the hill at 40. People demanded and achieved success at an early age, and the whole demographic balance of organisations shifted as a result.

Now, thanks to legislation, it is shifting again, with youth ceasing to be predominant. That is a cultural evolution that must quickly be embedded in corporate thinking, or companies will fall foul of the law on one hand and fall out of step with the market on the other.

- Paul Picknett, Corporate services director, Groupama Insurances.

AGE DISCRIMINATION LEGISLATION AND YOU

Age legislation draft regulations are due to be announced by the Department of Trade and Industry in summer 2005. Age discrimination law is scheduled to be implemented by October 2006. The legislation will outlaw age discrimination in employment and vocational training in 2006. It will cover private and public sectors and will include every member of the workforce, young and old.

The government will consult on draft age discrimination regulations covering employment and training, prior to publication of the final regulations. The government is committed to giving employers and individuals as much time as possible to prepare for age discrimination legislation coming into force by the end of 2006.

Why is the law coming into force?

The European Union Council of Ministers has adopted the Employment Directive on Equal Treatment. The directive requires all EU Member States to introduce legislation prohibiting direct and indirect discrimination at work on the grounds of age, sexual orientation, religion and belief, and disability.

FACTS AND FIGURES

- There are around 19 million people aged 50 years and over in the UK (40% of the adult population).

- The proportion of older people in the population is growing, partly because the post-war baby-boom generation is now reaching and passing 50 years of age. The report Winning the Generation Game, published in April 2000, states that, by 2020, the 50-plus age group will have increased by a further three million.

- Just over six million people aged between 50 and state-pension age are in employment - an employment rate of 69%.

- The employment rate for men aged 50 to 64 is 71% and for women aged 50 to 59 it is 66%. Since 1997 the employment rate of older people has risen faster than that of the working-age population as a whole.

- The average length of time in current employment is much greater for older workers (13 years compared with seven years for those aged 25 to 49).

- Older workers are more likely to work part time and/or be self-employed.

- People aged between 50 and state-pension age have fewer qualifications than those aged 25 to 49 and are more likely to have no formal qualifications whatsoever.

Find out more at www.agepositive.gov.uk.