APPENDIX 5
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. INTRODUCTION
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. EVIDENCE THAT
OLDER WORKERS
ARE TREATED
LESS FAVOURABLY
THAN YOUNGER
WORKERS AS
A RESULT
OF THEIR
AGE
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. BENEFITS OF
PROMOTING AGE
DIVERSITY
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. EFFECTIVENESS
OF THE
VOLUNTARY CODE
OF PRACTICE
ON AGE
DISCRIMINATION
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:
— Training and development
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. RECENT DEVELOPMENTS
IN ANTI-DISCRIMINATION
LEGISLATION
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. AREAS AFFECTED
BY LEGISLATION
FOR FURTHER
CONSIDERATION
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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