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


Memorandum from the Employers' Forum on Statute and Practice (EFSP)

  1.  EFSP, the employers' forum on statute and practice, is an employers' membership organisation with members from the private, public and voluntary sectors. EFSP is primarily concerned with making practical sense of employment and social legislation. It operates in the vital but neglected territory in which public policy, as determined through the political processes, is translated into practice obligations that organisations and those who work for them must fulfil.

  2.  EFSP welcomes the opportunity to submit evidence to the Committee's inquiry into Age Discrimination in Employment. This is a most timely inquiry given the recent adoption of the EU Directive establishing a framework on equal treatment in employment and occupation which covers amongst other issues age discrimination. EFSP recognises the importance of the equal opportunities agenda both at EU and UK level. Furthermore, at EU level, Article 13 provides the European Commission with a new-found opportunity to legislate in areas where legislative powers have not been available in the past. The UK has extensive experience in the field of equal opportunities on which legislation should draw as they frame regulations to meet the extended agenda.

  3.  Our written evidence below follows the order of the questions posed by the Committee.

In what ways and to what extent are older workers treated less favourably than younger workers as a result of their age?

  4.  There are occasions when older workers are treated differently from others. They will tend to qualify for more generous treatment when redundancies occur, on account of their longer service and closeness to the normal age for retirement, and that can lead to a stronger focus on them when it comes to the search for volunteers or, in cases of compulsion, to selection for dismissal.

  5.  Occasionally, an older worker will be recruited on terms which are less generous than might be offered to a younger person. They may be exempt from National Insurance, which would affect the gross pay the employer needs to offer and the employee to accept to achieve equality in net terms with a younger person. They may also be excluded from the employer's pension arrangements. Older workers may not be looking for the same package as a younger worker. They may already be receiving a pension from previous employment or may be quite prepared to take on work at a lower rate, for other financial reasons—eg where they have previously received a large redundancy payment from a previous employer. They will not necessarily see this as "unfair", since they may feel that, for example, their speed of response could be slower. The Committee, however, should note that although such situations occur, there are also employers that take a different approach and positively recognise and promote the business benefit of age diversity in the workplace.

  6.  In the voluntary sector, in which a number of EFSP members operate, utilising older workers on less generous arrangements than would be offered to full time staff can allow the charity to offer more services than would otherwise be possible. Many voluntary organisations employ older workers on a part time basis to utilise expertise gained in professional life that the charity could not normally afford. A number of these workers do not wish to earn a comparable salary to existing workers as they view it as their contribution to society.

What benefits does promoting age diversity in the workplace offer to employers and employees?

  7.  Employers who focus, at all times, on criteria that find the most suitable person to do the job will benefit through drawing talent from a wider recruitment pool. This will generally remove the occurrence of discrimination in the recruitment of employees. It also provides reassurance to all employees about fairness in treatment of staff, and is likely to strengthen their loyalty and commitment accordingly.

In what circumstances (if any) is the use of age as a criterion for the recruitment and retention of employees justified?

  8.  There may be certain circumstances in which age is used, justifiably, as a criterion for recruitment and retention. Many organisations pay particular attention to graduate recruitment. It is in the national interest that young people who stay on to do full-time higher education after school should be able to find good openings in the labour market when they qualify. Not all graduates, of course, are young, and older students should usually expect to receive comparable treatment, but their lack of suitable experience could place young graduates at a particular disadvantage in the labour market.

  9.  It is widely recognised that maintaining a good age balance across an organisation helps ensure a continuity of performance. A business in which the age distribution has become seriously skewed may need to take corrective action, and in such cases may wish to give preference to particular age ranges for some positions, though without compromising on the general principle of recruiting the best person for the job.

  10.  Very occasionally, there may exist a health and safety reason which requires an age criterion to be attached to a particular person. This is commonly recognised in respect of the armed forces, and in some comparable civilian posts (eg pilots) the requirements of the job may effectively justify either or both a minimum and a maximum age.

  11.  Furthermore, there may be circumstances where practicalities related to the length of training may require the employer to stipulate an age criterion for employment. For example, if a particular profession or occupation required a long period of training, employers would consider the use of an age criterion, as employing someone close to retirement may mean that they would never complete the training or use the skills for a long enough period to justify the investment. The newly adopted EU Directive 2000/78/EC establishing a general framework for equal treatment in employment and occupation seems to allow for this. It states that "differences of treatment on grounds of age shall not constitute discrimination, if, within the context of national, law, they are 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. Such differences of treatment may include, among others:.... (c) 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." National law within the UK should reflect this important provision.

How effective is the Government's Code of Practice in promoting age diversity in the workplace?

  12.  EFSP recognises that the Government's Code of Practice has not yet been as effective as might have been hoped when it was published. As Ministers themselves have noted, one consideration here is its relative novelty. It may also have been overshadowed rather by other legislative developments, of which there have been many over the last few years. In this respect, the absence of a legislative underpinning may have placed the code at a disadvantage. In a tightening labour market, however, the business case for action has not diminished and still remains the best basis for persuading those who are more reluctant to act that they must change their approach.

In what ways do other Government policies such as New Deal help or hinder older workers especially unemployed job seekers?

  13.  The concentration in the early stages of the New Deal on targeting younger age ranges will inevitably have an impact on the relative position of other age ranges. Given the relatively high incidence of involuntary long-term unemployment amongst older workers, the case for giving them comparable assistance is strong. We believe, however, that this is now being addressed in subsequent phases of the programme, although our members have no particular experience to record yet in this respect.

Is there a case for anti-discrimination legislation and, if so, what provisions should it include?

  14.  EFSP is concerned principally with the practicality of legislative proposals rather than with the pros and cons of the public policy which informs them. In this case, the question has effectively been settled by the adoption in November of the EU Directive 2000/78/EC establishing a general framework on equal treatment in employment and occupation.

  15.  This not only covers the area of age discrimination but also sexual orientation, religion or belief and disability. The UK is required to implement much of the Directive by December 2003. However, in the case of age and disability, the effective date has been extended to 2006.

  16.  Following discussions with our members on the detail of the adopted Directive, EFSP has a number of points that it hopes the Committee will consider as Members of Parliament begin to contemplate the means for implementing the Directive here.

  17.  The issue of age discrimination in employment is not only a broad issue, but also more complex than might first appear to be the case. It will require a well-considered and thorough debate.

  18.  The requirements of the Directive have now been established. The relevant Government department should begin to consider its implementation as soon as possible to ensure that interested parties are given a full and early opportunity to consider the issues and offer advice. Here as elsewhere, full consultation at an early stage is needed to ensure that the implementing legislation is clear, well-considered and concise. Employers need proper advance notice of the detail and definitions to be used to ensure effective implementation. They need time to adapt their policies and to train staff.

  19.  EFSP members are concerned that many of the terms used within the Framework Directive itself are lacking in definition and find that the text is confusing. It is hoped that the Government can develop the framework provided by the Directive providing greater clarity for those implementing the legislation. This will ensure that the legislation is implemented correctly.


January 2001

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