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
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
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 reasonseg
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
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
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
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
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