Select Committee on Education and Employment Minutes of Evidence

Memorandum from the Department for Education and Employment


  1.  The Government conducted a year long consultation from 1997 on the issues involved with age discrimination and how best to tackle it. The consultation involved employers, individuals, trades unions, and expert organisations. it recommended a non-statutory Code of Practice on Age Diversity in Employment as the best way forward at that time because of the complexity of some of the issues to be addressed. The Code was developed with advice from the CBI, TUC, Employers Forum on Age, the Chartered Institute of Personnel and Development, the Institute of Management, Age Concern and the Recruitment and Employment Confederation. The extensive consultation of the draft Code supported the standards it advocated but highlighted the need for accompanying good practice case studies. When the Code was published in June 1999 it was supported by guidance and case studies for employers on how to implement and reap the benefits of non-ageist employment practices in recruitment, selection, training and development, promotion, redundancy and retirement.

  2.  In responding to a Parliamentary Question in December 1998, the Prime Minister made it clear that the impact of the Code would be fully evaluated and that would inform future plans for legislation. A programme of evaluation and related research was set in hand to focus on key aspects of age discrimination. The full findings from that work will be published by the summer 2001. Interim findings from the evaluation of the impact of the Code were made publicly available in June last year. We are just now starting to pull together the findings from the three surveys and qualitative research. We have included in this Memorandum what information we currently have available, but the full findings will only become available over the next few months.

  3.  The Government found this experience invaluable in informing the negotiations for the European Employment Directive on Equal Treatment. It will also be of great assistance in helping to shape clear and workable legislation implementing that Directive.

Age Discrimination: Analysing the Problem

  4.  Over the last two decades there has been a steady decline in the employment rate of older workers throughout Europe. Much of this decline can be attributed to industrial restructuring and social policies that encouraged older people to exit the labour market early through, for example, redundancy and early retirement.

  5.  The pace of decline has varied, with Southern European countries experiencing a more rapid loss of older workers in employment. Employment rates also vary between men and women—men have been disproportionately affected. UK evidence drawn from the Labour Force Survey shows that employment rates for men aged 55 to 59 declined from 93 per cent in 1971 to 74 per cent in 1999. By contrast participation in the labour force for women in the same age group increased marginally from 51 per cent in 1977 to 55 per cent in 1999. This increase has not been as great as experienced by women of younger age groups.

  6.  In the last 10 years, European countries have begun to address this issue in a number of ways. Removing barriers to work and encouraging participation are two key examples. Pro-active measures include closing off of early exit pathways in pension provision and benefit systems, promoting a business case for retaining and employing older workers and employment programmes targeted at older workers.

  7.  Age discrimination has had a particular impact on older workers, but in employment age discrimination against younger people is also evident. "Age Discrimination in the Workplace" (Continental Research Spring 2000) reported that when young people were asked about age discrimination at work, or when looking for work, 80 per cent thought there is a lost of discrimination, and 30 per cent of the 18 to 24 age group said they had experienced it, rising to 45 per cent of 18 to 30 year olds. However the EFA report "Releasing Potential" (April 2000) surveyed 1,000 young people aged 18 to 30 and found that young people do not experience (perceive) discrimination on the basis of age alone.

  8.  The DfEE has commissioned further research to examine the attitudes and experiences of young people of age discrimination in employment. The findings will be available and published by the summer 2001.

  9.  Due to the sensitive nature of age discrimination research, it is difficult to quantify the extent to which older workers are treated less favourably compared to younger workers[1]. For example, quantitative surveys have provided inconsistent figures on the proportion of older people being discriminated against in employment. In addition, instances of age discrimination may be under-reported in some survey research, possibly because employers are unlikely to report instances of unfair treatment or they may unwittingly discriminate against people based on their age. Furthermore, discrimination is not always overt in nature. Whereas instances of direct discrimination (eg including age bands in advertisements) are quite clearly tangible examples which can be readily quantified, discrimination may also operate indirectly in ways more difficult to quantify and measure statistically. Age discrimination differs from other forms of discrimination as a comparative group cannot be readily identified.

Quantifying the extent of discrimination against older workers

  10.  There is a wealth of European and UK research, using inconsistent methodologies, which has tried to measure the extent of age discrimination. The body of evidence suggests that there is age discrimination in employment but it is difficult to put a figure on its extent.

  11.  Quantitative information on the extent of discrimination is based on two surveys which have sought to measure the prevalence of unfair treatment through the accounts of older people themselves. The Family and Working Lives Survey[2] found that discrimination was more likely to be reported in the area of recruitment, where 5 per cent of people aged 45 to 69 believed they had been discriminated against when applying for jobs because they were "too old". the perceived incidence of discrimination increased with age: 7 per cent of men and women aged 50 to 54 believed that they had been discriminated against in making job applications.[3]

  12.  A more recent source of information, the two-year evaluation of the Code of Practice on Age Diversity, explored the perceived incidence of age discrimination among older people (aged 50-69) across the six aspects of the employment cycle set out in the Code. A survey conducted six months after the Code was issued found that a fifth of older people believed they had been discriminated against in an actual or possible job because of their age. Discrimination was more likely to be reported in the area of recruitment where 12 per cent of older people felt that their age was the key-mitigating factor against them when applying for jobs, compared to 4 per cent who felt that they had been discriminated against in relation to training and development opportunities and 6 per cent in relation to promotion opportunities[4]. This measure should be treated with some caution; not all those reporting discrimination had been told that they were too old, for some the awareness was instinctive or through observation (eg seeing a less well qualified but younger candidate offered the job).

  13.  Throughout the 1990s, research across all European countries has suggested that age discrimination in the labour market is widespread, particularly in the areas of recruitment and training.[5]

  14.  Researchers have attempted to define discrimination through qualitative and quantitative evidence. DfEE research published in November 2000 indicates that unfair treatment can range from ageist attitudes and assumptions regarding an individual's experience, abilities, skills or knowledge to ageist principles outlined in human resource management policies, company ethos and marketing techniques.[6]

  15.  Research on employer personnel practice provides an insight into the extent and manner of discrimination by employers. An obvious example is in the recruitment process. Research indicates that this is a less common form of discrimination than previously. In 1991 an employer survey found that nearly half of employers felt that age was an important criteria in the recruitment of staff.[7] By contrast, the 2000 Wave 2 survey of employers, carried out for the Evaluation of the Code, found that only 13 per cent of employers mentioned a preferred age range, and 6 per cent of employers mention age limits when advertising a vacant post. More recently, a survey of adults aged 16 plus, carried out by the Chartered Institute of Personnel and Development, found that one in eight people had been discouraged from applying for a job in the past year because of age restrictions in job adverts or inferences about a preferred age.[8]

  16.  Age discrimination can also take the form of stereotypical views about the strengths and weaknesses of people based on their chronological age. A DfEE survey of employers found that older workers were more likely to be perceived as having positive attributes associated with maturity, loyalty, experience and reliability, and negative assumptions relating to inflexibility, ill-health, lower physical strength and poor IT literacy.[9] However, there is little medical or performance evidence to back such stereotypes.

  17.  Research indicates that older people have been treated less favourably than their younger counterparts in the area of redundancy and early retirement[10]. Throughout the recession years of the 1970s and 1980s, employers seeking to reduce their overheads targeted such measures at older workers to achieve staffing reductions. Older people were actively encouraged to take early retirement to make way for the young in the labour market.

  18.  Employers across Europe are waking up to the business benefits of employing and retaining older workers. However, this is no reason to be complacent. It is important to consider the role and expectations of older workers themselves in early exit from the labour market. Early exit strategies still exist in some industries and early retirement is still the expectation of some older people. In 1999, almost one-third (31 per cent) of employers surveyed as part of the evaluation of the Code offered early retirement to their employees; and 1 in 4 employed adults aged 50 to 69 said that they "expect" to retire before 60, most commonly at 55.

  19.  However, while half those in employment thought it likely that they would take paid employment after redundancy or early retirement, research shows that once detached from the labour market, older people find it much more difficult to secure a job. Labour Force Survey data for Spring 2000, shows that 42 per cent of people aged 50 to state pension age have been unemployed for 1 year or more compared to 32 per cent of those aged 25 to 49 and 15 per cent of those aged 16 to 24 years.

  20.  With regard to discrimination against older workers and training opportunities, analysis of the Labour Force Survey suggests that older people are much less likely to receive training than younger people—data for spring 2000 shows that only 10 per cent of adults aged 50 to 64 had received employer based training in the last 13 weeks compared to 23 per cent of those aged 20 to 24 and 17 per cent of those aged 25 to 29[11].

  21.  According to the Wave 2 survey of employers as part of the evaluation of the Code, four out of five companies offered training and development opportunities to all staff irrespective of their age. However, one in five companies rely on self-selection by individuals interested in training, which may inadvertently disadvantage older workers who are thought to be less confident in particular areas of training associated with IT. Research suggests that employers perceive older people as taking longer to learn, and that they are less likely to experience a pay-off from their investment in training because older workers are closer to retirement than their younger counterparts.[12]

  22.  There is potential for employers to indirectly discriminate against older workers on qualification grounds. Labour Force Survey data for Spring 2000 shows that 27 per cent of those aged 50 to State pension age have no qualifications, compared to 13 per cent of those aged 25 to 49. The evaluation of the Code indicates that two-thirds of employers include specific qualifications required in job adverts. This may inadvertently restrict applicants to a desired age range because older people are less likely to possess formal qualifications. This reflects lower levels of formal education provision in their youth[13]. Such indirect discrimination may arise if employers place unnecessary emphasis on educational qualifications to determine whether or not a person is capable of doing a job. Because older people are less likely to possess such qualifications, they may be deemed unsuitable, irrespective of whether or not they possess relevant experience or transferable skills acquired through their working lives.

  23.  The National Adult Learning Survey 1997 found that 38 per cent of people aged 56 to state pension age have poor basic skills compared with 19 per cent of those aged 16 to 25. Given the shift in the labour market from traditional manual work to services and skilled work, older people with poor basic skills will also face difficulties in competing for jobs.

The Benefits of Age Diversity in the Workplace

  24.  Age discrimination is both unfair and wasteful, and makes no economic sense. Overall the economic cost is high. The Government report "Winning the Generation Game" (April 2000) found that the drop in work rates amongst people aged over 50 since 1979, costs the economy about £16 billion a year in lost GDP and costs the public purse £3-5 billion in extra benefits and lost taxes. Other estimates have put the figure higher—the Employers Forum on Age estimated the cost in lost GDP at £26 billion a year. The waste in human terms is equally high. People, younger or older who are unable to fulfil their potential because of age prejudice, can suffer in terms of demotivation, financial insecurity, and declining health. Increasingly employers are however realising the loss to the organisation arising from ageist employment practices and the considerable benefits of an age diverse workforce for both the organisation and its workers.

  25.  Employers need to make sure they recruit or promote the best person for the job. Employers who have dispensed with unnecessary age criteria in their employment practices and replaced them with objective, job related ones, have a wider choice of applicants from which to recruit to get the best person. They are also more likely to find the right person for the right job, with consequent reductions in staff turnover and absenteeism, leading to reduced business costs.

  26.  An age diverse workforce opens opportunities for building a more flexible, multi-skilled workforce, which is more able to contribute to business success. A number of employers have already recognised and benefited from the benefits of an age diverse workforce. Some of these were featured in the guidance accompanying the Code of Practice on Age Diversity. Two of the case studies, Wombwell Foundry and HCR plc, both classed as small or medium sized enterprises, identified business benefits that were typical of many of the organisations featured. Absenteeism decreased, business costs were reduced and productivity increased. Wombwell reported significant increase in output; HCR reported cost reductions of £400,000. There were also reductions in staff turnover. HCR reported a reduction in staff turnover of 20.5 per cent.

  27.  For some organisations, benefits have stemmed from a simple change in recruitment practices. Famously, B&Q shifted its store recruitment focus to include older people to reflect its customer base and was able to report improved sales and customer service as well as increased productivity.

  28.  Employers need to be aware of the changing age profile of the population. By 2005 over 36 per cent of the workforce will be aged over 45 and by 2010 almost 40 per cent will be in that age group. People aged 16 to 24 will make up only 17 per cent of the workforce. If employers continue to compete with each other for the reducing numbers of younger people, whilst ignoring or failing to invest in the training of older age groups in the labour market and workforce that will increasingly drive up recruitment and wage costs.

  29.  For the individual, age diversity opens up the opportunity to make use of acquired skills, to contribute fully to society, and to experience the accompanying increase in motivation and self worth which stem from that. It encourages the development of a labour market in which people are able to compete fairly for employment opportunities regardless of their age.

  30.  We have a culture when an arbitrary age is generally used to determine the point of retirement. This means that employees with the skills and experience to continue making a valuable input to the organisation are arbitrarily retired. Indeed some organisations, including a fire service, have found real benefits in no longer using age as an arbitrary proxy for mental and physical ability to do the job effectively. The Code and accompanying case studies set out the benefits for employers and individuals of a more flexible approach to retirement based on individual choice and employer need.

  31.  Research has shown that there are human an social costs for individuals who are out of work involuntarily. More than half of those out of work have characteristics associated with social exclusion. They are more likely to experience low self-esteem and poverty, which can lead to disillusionment, depression and ill health, with considerable future costs to society. Unemployment has been shown to increase the risk of earlier death by as much as a third for men and women of all ages, and they are more likely than those in work to die from cancer, heart disease, accidents and suicide. By contrast, those in work visit their GP around 50 per cent less than people unemployed, and report being more satisfied with their lives overall. 30 per cent of people, 50 to state pension age, are economically inactive (Labour Force Survey Spring 2000) with almost one million of those receiving Incapacity Benefits.

Promoting Age Diversity

  32.  To support the Code, the Government launched an advertising and publicity campaign from February 1999 aimed primarily at employers and those who can influence employers. The campaign began with national poster, press and commercial radio advertising, followed by regional press advertisements. Subsequently, the campaign has developed several different strands.

  33.  One of the strands targets recruitment and human resources media as a means of reaching those who recruit, retain and promote. This has included the placing of articles in key publications such as The Interviewer, People Management and Personnel Today, and the launch of a best practice award aimed at recruitment consultancies. During August, an information pack was mailed to 11,000 consultancies, giving information about the need to tackle age discrimination and trailing the competition. The award is sponsored by The Interviewer, which has been providing extensive editorial coverage throughout the Summer and into the Autumn. In addition, DfEE has sponsored a Personnel Today award aimed at other organisations.

  34.  A second strand of the campaign includes the targeting of specific industry sectors, such as engineering, IT, retail and the public sector. This involves the placing of articles in trade association journals, bespoke mailings to trade association members and articles in other trade publications.

  35.  The third strand relates to the general business and regional press as a means of reaching general managers and businesses. This includes coverage in titles such as Management Today and initiatives by some employer organisations to promote the benefits of age diversity. The CBI, for example, has mailed copies of the Code of Practice to 1,000 of its member companies urging the case for adopting the standards it sets out. In addition, 25 regional newspapers across the country sponsored regional age diversity awards. A number of employers have also agreed to champion age diversity by providing case studies and by giving time to the campaign. The campaign will continue throughout the year.

  36.  Evaluation evidence indicates that the code has been effective in raising the profile of age diversity issues among employers. It has helped bring about a culture change in employers' attitudes towards age. The research shows that awareness has been increasing steadily since the code was introduced 19 months ago. Just six months after the code was issued, 29 per cent of employers said that they were aware of it. Levels of awareness are higher among large organisations where almost two-thirds have heard about it. Preliminary analysis of the Wave 3 survey shows that 16 months after the code was issued, 37 per cent of employers were aware of it.

  37.  The DfEE is currently working closely with Age Concern Training and the Employers Forum on Age to take the Code and an understanding of the benefits of an aged diverse workforce, to small and medium sized enterprises (SMEs). The project will develop a model for successfully engaging SMEs in the issue, which can then be used widely. The DfEE is also planning to further build on the promotional campaign by developing age diversity strategies with key occupational sectors.

The impact of the Code of Practice on Age Diversity in Employment

  38.  To measure the impact of the Code, the DfEE commissioned a programme of research from NOP. The research looks at two different audiences: a cross-section of employers randomly selected from all enterprises in Great Britain and a sample of British residents aged between 50 to 69 years. The research was carried out over 3 waves. A baseline survey at wave 1 took place six months before the Code was issued, and has been used as a benchmark against which to measure change. The second wave was undertaken 6 months later, in June 1999. The third and final wave took place 16 months after the Code was originally issued and a final report is being prepared. In addition, a series of 30 case studies were conducted. These included analysis of administrative data held by companies and 75 in-depth interviews with front-line managers as well as younger and older employees.

  39.  The surveys have found employers were generally positive about the idea of age diversity; old and young alike were found to be valued in different ways. Many companies valued both age groups equally. Generally older workers were particularly valued for their loyalty, commitment and maturity and younger workers for their enthusiasm, flexibility and drive. In terms of productivity, more than two-third of employers did not distinguish any different in characteristics between older and younger employees. Only 20 per cent of employers could think of any disadvantages of an age diverse workforce, with many recognising the benefits—the availability of older people to train and advise younger staff, a diverse range of attitudes and experiences that could enrich the company and a workforce that reflects the age profile of society.

  40.  The research found that reference to age in personnel policies was uncommon: few companies acknowledged that age discrimination occurs in any of their policies relating to recruitment, promotion, training and development, redundancy and retirement. However, this is no reason to be complacent. A significant minority did include age as a criterion in some aspects of the employment cycle outlined in the code.

  41.  However, the wave 2 survey indicates some promising signs of change with more companies orientating their policies towards age diversity:

    —  The proportion of companies taking age into consideration when selecting the best candidate for a job had almost halved just six months after the code was issued: 27 per cent of companies reported using this criteria in Wave 1 compared to 16 per cent in Wave 2.

    —  There has been a slight decrease in the proportion of companies taking age into consideration when selecting candidates for promotion: a decrease from 18 per cent; in Wave 1 to 15 per cent in Wave 2.

    —  The proportion of companies offering training and development opportunities to all staff has increased from 72 per cent at Wave 1 to 81 per cent at Wave 2.

    —  Consultation with employees about their training needs has also improved: managers in 49 per cent of companies surveyed at Wave 1 had sole responsibility for identifying candidates for training compared to 38 per cent at Wave 2.

  42.  Companies report a general reluctance to make changes to their existing employment policies and practices. The main reason given for introducing no change as a result of the Code is the belief that company policy or practice is already appropriate or that it currently meets the criteria of government policy. This is something that the government expects future legislation to address.

Help for Over 50s in the Labour Market

  43.  In the EU, the UK has the fourth highest employment rate for 55 to 64 year olds at 49.4 per cent, this is marginally behind Portugal (50.8 per cent), but somewhat lower than Denmark (54.2 per cent) and Sweden (64 per cent).

  44.  Each summer the Government publishes an analysis of the labour market position of older people (50 to state pension age). Over the two year period to April 2000 the employment level of older people rose by 6 per cent. While levels of unemployed older people had fallen the proportion who were economically inactive remained largely static at 30 per cent.

  45.  To provide additional help for older jobseekers, that specifically addresses the problems of those worst off, the Government introduced New Deal 50 plus. Launched nationally in April 2000, it is a major new programme offering personal advice, help with jobsearch, a cash employment credit (£60 per week for full-time work and £40 per week for part-time work), and an in work training grant of up to £750. Each year it is expected to help 45,000 over 50s, who have been on benefits for over 6 months, or their dependant partners, back into employment. In its first eight months it has already helped 25,000 people aged 50 or more, move from benefits into work with the employment credit. For 2001-2, we plan to help about 45,000 older people into work. We are also developing 3rd Age Apprenticeships within New Deal 50plus to help older jobseekers into work in specific skills shortage sectors, drawing on the programme's training grant, to help the employer provide skills training.

  46.  Our major training programmes for adults out of work, have no upper age limit. UK On-line Computer Skills for employability is attracting considerable demand from older jobseekers, with over half of the participants over 50. We are also developing additional help with basic skills for all jobseekers with such a need.

  47.  From April 2001 the Government will nationally launch New Deal for Disabled People to offer additional job broking and help for those people on Incapacity Benefits who want work in some capacity. Just over half the people who are in receipt of Incapacity Benefits are aged 50 and over.

  48.  The Government has introduced a range of employment and training help for jobseekers of all ages, each designed to specifically meet the needs of particular jobseekers. New Deal for Young People focuses on help appropriate for people aged 18 to 24 who are making the transition from education or casual work into sustained employment, at the beginning of their careers. For adults, New Deal 25+ and Work Based Learning and a range of other employment services are available. Many people aged 50 or over will be eligible for a range of help. Employment personal advisers help adults to select the provision most appropriate to help them into work.

  49.  The Prime Minister commissioned the report "Winning the Generation Game" which was published last year. It identifies action needed to overcome the barriers faced by older people in the labour market. An Inter-Ministerial Group is ensuring progress in areas which include pensions good practice, encouraging more flexible approaches to retirement, and more opportunities for volunteering and learning.

The European Employment Directive on Equal Treatment: Implementing Age Legislation

The implication of the Directive

  50.  The Government supports the terms of the Directive which will require the introduction of new legislation to put into effect "the principle of equal treatment", by 2 December 2006. This requires law prohibiting direct or indirect discrimination on the grounds of age in relation to:

    —  conditions for access to employment, self-employment or occupation, including selection criteria, recruitment conditions and promotion;

    —  access to all types and all levels of vocational guidance, vocational training (including practical work experience), advanced vocational training (which includes many further and higher education courses at colleges and universities) and retraining;

    —  employment and working conditions, including dismissals and pay;

    —  membership of, and involvement in, an organisation of workers (including Trade Unions) or professional organisation—and the benefits provided for by any such organisation.

  51.  The Directive covers both the public and private sectors.

  52.  However, the Directive does not apply to payments under state social security or social protection schemes; and, when transposing the age provisions of the Directive, Member States may choose to exclude:

    —  service in the armed forces; and

    —  membership of, or benefits under, occupational pension schemes.

  53.  If our implementing legislation so provides, it would not be discrimination where the less favourable treatment is shown to be objectively and reasonably justified by a legitimate aim, including legitimate employment policy, labour market and vocational training objectives, and if the means of achieving that aim are appropriate and necessary. The Directive provides the following list of (non-exhaustive) examples of situations where differences of treatment on the grounds of age are capable of being justified:

    —  the setting of special conditions on access to employment and vocational training, employment and occupation, including dismissal and remuneration conditions, for young people, older workers and persons with caring responsibilities in order to promote their vocational integration or ensure their protection;

    —  the fixing of minimum conditions of age, professional experience or seniority in service for access to employment or to certain advantages linked to employment;

    —  the fixing of a maximum age for recruitment which is based on the training requirements of the post in question or the need for a reasonable period of employment before retirement.

  54.  The Directive also allows for differences of treatment based on age to be justified where a person's age is a genuine and determining occupational requirement. For example, it might be a genuine requirement for these purposes for the presenter of a TV youth programme to be young.

  55.  Implementing legislation will need to make provision for individuals who consider that they have been discriminated against contrary to the Directive to seek redress in the Courts or tribunals—and to be awarded appropriate compensation where the allegations are upheld.

  56.  All laws, regulations and administrative provisions contrary to the principle of equal treatment will have to be repealed; and implementing legislation will need to ensure that provisions contrary to that principle in things such as contracts of employment, collective agreements, and the rules governing membership of employers, workers or professional organisations, can be annulled by Courts or tribunals, if not amended.

  57.  We intend to take full advantage of the long implementation period to consult with employers, individuals and expert groups to develop clear and workable legislation. We want to take employers with us. It is also our intention to promote vigorously the business benefits of age diversity.

Six Year Implementation Period

  58.  The Directive provides for a six year implementation period for both age (and disability).

  The Government supported the six year implementation period for age to ensure we would have the time to consult closely and extensively with employers, individuals and expert groups, to prepare clear, workable and beneficial age legislation. We listened to our social partners during the consultation on the Directive. Employer groups were concerned about confusion and a rush to litigation, and age representative groups expressed concerns about ineffective legislation. We agree the importance of producing clear guidance for employers to enable them to prepare for legislation, and the need to develop workable legislation to effectively outlaw age discrimination based on ill-founded prejudice, and the inappropriate use of age criteria. We will take the time needed to achieve this. As we look to the extensive consultations ahead, it would be wrong to predict at this stage the necessary timescale. That does not mean we will do nothing in the meantime.

  59.  We are already tackling age discrimination by vigorously promoting the Code of Practice on Age Diversity and the benefits to be realised. Indeed the evaluation of the impact of the Code and a range of related research will report by the summer 2001 and help to inform the targeting of our further action to stop unjust discrimination. We must ensure all employers understand the benefits of age diversity.

A Single Equality Act or Separate Acts?

  60.  We are at a very early stage of consideration. We will want to take account, amongst other things, of business views on issues of consistency and timing. We will need, also, of course, to take account of what the Parliamentary timetable allows.

Age Legislation Covering Employment

  61.  We attach particular importance to consulting widely with employers and others to ensure a practicable and workable approach. It is too early to give a considered and definitive view. It would not be helpful to speculate ahead of consultation and discussion. Our commitment is to implement the Directive, which is confined to employment and vocational training and guidance.

Burden of Proof

  62.  Article 10 of the Directive provides for the burden of proof to shift to the respondent only after the complainant has proved facts establishing a prima facie case of discrimination. This will not require a particularly significant change from the practice currently applied by employment tribunals in Great Britain in race and sex discrimination cases following the judgment of the House of Lords in Zafar v Glasgow City Council [1998] IRLR 36. In essence, that case set out that, where an applicant produces compelling evidence of discrimination, a tribunal is entitled to infer that the employer is indeed guilty of discrimination unless the latter produces a satisfactory explanation. However, the Directive will require this approach to be formalised as a rule of law. The same will apply in the context of sex discrimination—by virtue of the Burden of Proof Directive 97/80/EC, and in the context of race discrimination—by virtue of the Race Directive 2000/43/EC.

Exceptions and Derogations on Age

  63.  We have not yet decided how the derogations provided for in the Directive will be transposed into national law. We intend to carry out an extensive consultation exercise before making firm decisions in this respect, or before starting to prepare draft legislation. But it should be borne in mind that the derogations are permissive only, and are likely to be construed narrowly by the European Court of Justice. It will therefore not be open to the Member States to provide for sweeping, open-ended exceptions that would undermine the whole purpose of the Directive. This Government would not want to do so in any event; indeed we are committed to developing workable legislation which will produce a fair balance between the legitimate needs of employers on the one hand, and the need to eliminate age-related prejudice on the other.

Occupational Pensions and Retirement

  64.  In light of Article 6.2 of the Directive, the United Kingdom (and other Member States) will be entitled to exclude the fixing of ages for admission to, or for entitlement to benefits payable under, occupational pension schemes from the scope of the legislation implementing the age provisions of the Directive. Our current intention is to make use of this derogation.

  65.  There is no such derogation in respect of compulsory retirement ages. They will be unlawful unless employers can show that they are objectively justified—in accordance with criteria specified in legislation transposing the Directive. In fact we are already promoting the concept of flexible and phased retirement for the benefit of employers and individuals—and the business benefits of existing good practice.

Timetable for Implementation of Age Legislation

  66.  We currently anticipate that legislation implementing the Directive would not come into force until December 2006. As mentioned above, it will take time to produce workable legislation and clear guidance; and employers will need time to prepare for the legislation. The exact timescale will be determined in the light of responses to the wider consultation exercise.

Implications for the Non-Statutory Code of Practice on Age Diversity

  67.  The evaluation of the impact of the Code, and how it has worked in practice, will help to inform our decisions towards the shaping of age legislation and any statutory codes of practice supplementing that legislation. The scope of the voluntary code is, of course, narrower than that of the Directive. The Code has provided an essential foundation for tackling age discrimination. The evaluation, and related research will report fully by the summer and provide useful information towards wider and extensive consultations with employers, individuals and expert groups, covering issues raised by the scope of the Directive.

Department for Education and Employment

January 2001

1   McKay & Middleton (1988). Back

2   1994. Back

3   Ibid 1. Back

4   Evaluation of the Code of Practice on Age Diversity in Employment: Interim Summary of Findings From Wave 2 (June 200). Back

5   Drury (1993), Walker, A (1993), Taylor, P. (2000). Back

6   Taylor, P. "Factors Affecting Retirement Behaviour", 2000. Back

7   Taylor & Walker, 1993. Back

8   Chartered Institute of Personnel and Development (CIPD), January 2001. Back

9   Ibid 4. Back

10   Campbell, N. (1999), Walker, A (1993), Taylor, P. (2000). Back

11   Education and Training Statistics for the United Kingdom, DfEE, 2000. Back

12   Kodz, J et al, (1999), Taylor, P & Walker, A. (1995), Metcalfe and Thompson, 1990). Back

13   Social Focus on Older People, ONS, 1999. Back

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