Select Committee on Education and Employment Appendices to the Minutes of Evidence


Memorandum from the Institute of Management

  Please find enclosed the Institute of Management's (IM) submission of written evidence in response to your inquiry into Age Discrimination in Employment.

  As you may be aware, the Institute of Management represents about 89,000 individual managers in the UK and embraces 560 corporate partners. Our members are drawn from all sectors of business and all sizes of company. The views and perspectives of our organisation are based upon the regular and rigorous research we conduct amongst the membership, and our day-to-day relationship with large numbers of UK managers through the training and development programmes we offer.

  As indicated in our submission, the IM has been actively involved in the development of the voluntary Code of Practice on Age Diversity and we welcome this opportunity to share our views and experiences with the Committee.

  I trust that you will find our submission to your inquiry helpful.


  1.1  The Institute of Management welcomes the opportunity to submit written evidence to the Committee as part of its inquiry into Age Discrimination in Employment.

  1.2  As you will be aware, the Institute of Management (IM), the largest organisation for professional management in the UK, has taken an active interest in ageism for some time. Our position on ageism is founded on extensive research among the UK business community.

  1.3  In 1996, we undertook a major research project into the subject and I enclose a copy of the report, Breaking the Barriers: A survey of managers' attitudes to age and employment, for your information. Unless otherwise stated, the statistical evidence cited in this submission is based on this research. It is planned that this research may be further developed in 2001 to provide a five-year longitudinal study of changes in employers' attitudes to ageism.

  1.4  The IM has also been actively involved in the DfEE's working party for promoting age diversity in employment, and contributed to the development of the voluntary Code of Practice on Age Diversity in Employment, particularly the drafting of the practical guidance for employers, which was published in June 1999.

  1.5  The IM is committed to equal opportunities and continues to raise the profile of discrimination issues amongst its members and welcomes opportunities to contribute to the development of public policy in this significant area.

  1.6  In our response below, we have directly addressed the majority of the questions posed in the Committee's terms of reference for this inquiry, dated 1 November 2000.


  2.1  We would challenge this initial proposition in that it implies that age discrimination only takes place against "older workers". The term "age" often fixes in peoples' minds an image of people who are "elderly" or close to retirement age. This acts to disguise the true extent of the problem as the evidence shows that key ages are 40 and 50 and that women experience age discrimination at earlier ages than men.

  2.2  The use of age as a decision-making criterion in the workplace can equally affect young people. In our research, 60 per cent of managers under the age of 35 feel they have been denied access to jobs because of their relatively young age.

  2.3  Overall, there is widespread consensus on the extent to which age discrimination exists. Age is an extensively used criterion for a wide range of vital workplace decisions. In our research, more than half of managers used age as a factor in recruitment and selection; 29 per cent in judging promotion; 25 per cent in relation to training; and nearly a third when making redundancy or dismissal decisions.

  2.4  Age barriers were also more likely to be found in larger organisations and especially where efforts were being made to reduce employee numbers. Managers in small businesses were found to be more positive about the future recruitment of older workers.

  2.5  In organisations that had undergone a downsizing programme, nearly six in 10 reported focusing on age for selection. More than four in ten say they have been the objects of age discrimination themselves when applying for jobs.

  2.6  Equally, there was widespread consensus on the need to change this behaviour. Eight in ten believed that their organisations should not focus on older employees as a means of reducing headcount.

  2.7  85 per cent believed that employers should treat age as an equal opportunities issue. Nearly seven in ten favoured legislation to restrict the use of age in job advertisements and 65 per cent favoured comprehensive legislation on age discrimination covering all aspects of employment.


  3.1  The Government's Foresight Ageing Population Panel published The Age Shift—Priorities for action in December 2000. This highlighted how the demographic profile of the UK is rapidly shifting and how businesses and organisations should be seizing the opportunities presented by both an ageing workforce and customer base. The report noted that:

    "at present there are 20 to 30 million more people in their 20s and 30s than there are between 45 and 62. By 2020 there will be a million fewer. Employers need to plan for the shift in the age balance of the working population, much of which will occur in the next 10 years".

  3.2  The benefits of promoting age diversity are now well-rehearsed. An age diverse workforce:

    —  provides a larger talent pool;

    —  provides a valuable mix of skills, experience and knowledge;

    —  more accurately reflects companies' markets and customer profiles;

    —  reduces staff turnover, resulting in reduced recruitment costs;

    —  increases productivity through a more motivated workforce; and

    —  demonstrates an organisation's commitment to anti-discriminatory employment practices.

  3.3  Our research has also shown that there is a clear recognition of a relationship between age and a range of important employment characteristics. Older workers, for example, may be seen as more reliable, committed and providing a better quality of work but are less flexible, energetic, ambitious and able to learn.


  4.1  In view of the IM's contribution to the DfEE working party that developed the voluntary Code of Practice on Age Discrimination, the IM welcomed its introduction.

  4.2  The current Code of Practice on Age Discrimination is commendable for its brevity and in capturing a series of statements of intent that should lie at the heart of any successful non-discriminatory policy as broad guides to business behaviour.

  4.3  The IM also welcomed the Guidance and Case Studies that was published with the Code of Practice. This provided detailed guidance on six aspects of employment (see paragraph 4.7 below) where employers should directly consider the practical implications of the principles of the Code. This provides a vivid illustration and example of behaviours and practices that support non-discrimination. This is necessary to challenge current practice, grow understanding of the issues and for use as models for business to tailor and adapt.

  4.4  Since the voluntary Code of Practice has only been operational for 18 months, it is difficult to ascertain the effectiveness of the Code. Although the profile of the issue of age discrimination has certainly been raised amongst employers, this could also be attributable to other factors such as effective campaigning by non-Governmental organisations, changing demographics, and a tightening labour market.

  4.5  A research study amongst employers to gauge awareness and the levels of implementation of the Code of Practice on Age Discrimination would need to be carried out in order to make a fair assessment of its impact. The IM looks forward to the publication of the Government's evaluation of the Voluntary Code of Practice, which is due out this year.

  4.6  It is likely that the Code of Practice would benefit from updating in the light of feedback from the companies and organisations that have adopted the voluntary Code of Practice and the Government's recent evaluation.

  4.7  The Code of Practice already covers the following areas:

    —  Recruitment

    —  Selection

    —  Promotion

    —  Training and development

    —  Redundancy

    —  Retirement

  Within these categories, the Guidance and Case Studies on training and development could be explained to address particular areas such as ICT where ageism has still been shown to be a barrier. According to the Employers Forum on Age, a recent survey of nearly 1,400 professionals in the IT sector found that two-thirds feared they would be unable to get a job once they reached 45 (report published 17 October 2000).

  4.8  The current Guidance on retirement states that "rules governing pension arrangements are complex. It would not be appropriate or sensible here to try to cover all possible approaches." This exemplifies the need for simplification and also for more flexibility in current pension structures and arrangements.

  4.9  The regulatory system for occupational pension schemes is complex and can put employers off providing occupational pension schemes in the first place or attempting to introduce greater flexibility into existing schemes. Pensions need to be simplified so that comprehensive high quality guidance is made available to employers and employees.

  4.10  Continuing attention needs to be given to ensure that disincentives to continued employment are removed. The Government has already recognised these needs and has proposed modernising tax rules on pension payments to allow for more flexible retirement, however this review has not yet been published. Current Inland Revenue rules prevent employees downshifting to part-time work while drawing part salary/part pension. This creates barriers to many who would otherwise continue working. A further objective should be to ensure the removal of financial and other barriers to working beyond the current retirement age.

  4.11  An aspect, which is not addressed in the current guidance, is pay and remuneration. This is another area of employment practice that can be subject to age discrimination, and is an area that should be included in any revision of the Code of Practice. The area of "employment and working conditions, including pay and dismissals" (Article 3) will be in the scope of future UK discrimination legislation to be introduced under the recent EU Directive (see para 5.1 below).

  4.12  "Working conditions" may also be another area that could be addressed. In order to retain older staff, many workplaces may need redesigning, including using an ergonomics approach, in line with the requirements of the Disability Discrimination Act. Action to reduce the incidence of work-induced stress and musculo-skeletal strains should become a priority since these are the most commonly cited reasons why older people leave work.


  5.1  The European Economic and Social Policy Council approved a Directive in October 2000 which will outlaw workplace discrimination on the grounds of age, religion, disability, and sexual orientation. This will require the UK to have age discrimination legislation in place by 2006. The IM would hope that by this date the vast majority of employers would already be compliant with the requirements of such legislation, having adopted the voluntary Code of Practice.

  5.2  The EU Directive is deliberately structured to allow member states flexibility in creating legislation which is suitable to local employment conditions. The development of UK discrimination legislation will need to take place in close consultation with industry to ensure that employers do not face a confusing array of new legislation.

  5.3  The IM considers that three new discrimination acts (on age, sexual orientation, and religious belief) would have the potential to create more confusion than clarity. A preferred option would be to codify existing legislation into a single Equality Act, supported by regulations and codes of practice written in plain language. A single Equality Commission could then be responsible for enforcement.

  5.4  As with the Code of Practice on Age Discrimination, the IM would encourage the Government to ensure that legislation is backed up by comprehensive and practical-based employer guidance, so that employers are in no doubt about what will or will not constitute discrimination.


  6.1  Further issues that will need to be addressed in the context of introducing discrimination legislation in the UK are as follows:

    —  As mentioned above (see para 4.11), the current Code of Practice on Age Discrimination only covers "conditions for access to employment" and does not cover "employment and working conditions, including dismissals and pay". If the Code of Practice is to form part of the final legislation it will need to be revised accordingly.

    —  Existing UK legislation covers all forms of gender, racial and disability discrimination, including the provision of goods and services, whereas the EU Directive is only about discrimination at work. Will UK legislation be limited to employment?

    —  What will be the role of Employment Tribunals? Recent ACAS figures already show a 32 per cent increase in disgruntled workers launching tribunal cases against their employers in the last 12 months. Any legislation must therefore ensure that only those with legitimate age discrimination claims are encouraged to take litigious action.

    —  How will the UK determine (under Article 4) which "occupational activities" are to be exempted from the scope of UK legislation?

    —  What will be the impact on SMEs, which are less well equipped to ensure that their procedures are able to cope with rafts of discrimination and employment laws?

The Institute of Management

January 2001

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