Shepherd and Wedderburn LLP
  September 26, 2006 - Scotland

Age Discrimination
  by Sheila Gunn

According to the independent charity, The Age and Employment Network, the cost of age discrimination in the UK now amounts to £5.5bn in lost government tax and paid unemployment benefits and a further £30bn in lost productivity annually. These are astounding figures. It seems that many employees are currently obliged or persuaded to leave the workplace before their normal retirement age and that early exit from work for people aged over 50 tends to be permanent. Many employers target older employees for job losses and the consequences are clearly bad for employees, bad for the economy and bad for employers. A mixed age workforce is a diverse workforce and will have the consequent benefits of higher retention rates, lower absenteeism, increased motivation, greater flexibility and a wider pool of skills. Whilst there may be elements of truth in the stereotypical perception of age in the workplace, sufficient contrary evidence exists which highlights the fact that age discrimination can result in employers not recruiting the best candidate and spending additional time and money on recruitment. Against this background, the Employment Equality (Age) Regulations 2006 seek to overcome the myths and misguided attitudes surrounding age in the workplace by introducing age discrimination legislation. The Regulations come into force on 1st October 2006 and cover both employment and vocational training. they also implement the European Equal Treatment Directive that has already resulted in new UK equality legislation in the areas of sexual orientation and religion and belief. in addition people of all ages, both old and young are protected and the regulations will help change the perception of age in the workplace. The new Regulations make it unlawful to take decisions on employment and vocational training based on a person's age rather than their competence. This will cover the full history and scope of the employment relationship from recruitment, selection, pay and benefits, training and development, dismissal, redundancy and retirement. It will cover direct discrimination, for example, recruitment restricted to individuals aged over 30, and indirect discrimination, such as limiting recruitment of individuals with a qualification gained in the last 5 years, thus ruling out those aged over 30. The victimisation and harassment of employees on account of their age is similarly prohibited. Following Lord Turner's Pensions Commission report, it is the area of retirement in the new Regulations that has inevitably seized the limelight. A default retirement age of 65 will be introduced making compulsory retirement below that age unlawful unless this can be objectively justified. The Regulations create a "fair retirement procedure" and provide employees with a "right to request" to work beyond the default retirement age of 65. In practical terms, employers must now give employees notice of their impending retirement within 6 to 12 months of the normal retirement date and must notify the employee of their right to request to continue to work after that date. Employers will have a "duty to consider" requests from employees to work beyond their retirement date and ought to meet with them to consider the options within a reasonable period of such a request being made. There are financial penalties that employers will suffer where they have failed to follow the fair retirement procedure and the timetable laid out in the Regulations. It follows that employers need to have an understanding of the proper procedures here. The Age Regulations include a wider range of potential exemptions than other current UK equality legislation. The exemptions have to be justified as legitimate aims, whose consequences in terms of discrimination are proportionate to the importance of the aim. It will be interesting to see how this is interpreted judicially, particularly since examples of the exemptions have not been included in the final Regulations. It is 30 years since sex discrimination legislation was introduced in the UK and changed the legal landscape forever. With the introduction of age discrimination on 1st October 2006, that landscape will now compel employers to judge employees on merit and not according to the number on their birth certificate.


Footnotes:
Sheila Gunn.is a partner specialising in employment law with law firm Shepherd and Wedderburn. +44(0)141-566 2555