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Business must adapt to the reality of an ageing workforce

by , PrintWeek

Office for National Statistics figures published this month show that our workforce is most definitely ageing. In fact this year, in the period between February and April, the number of people in employment in the UK who were over 65 broke the 1m mark for the first time.

The figures have revealed that of the 29.8m people now officially working in the UK, 3.4% are early baby-boomers and of all over-65s living in the UK, almost 10% are working. And the trend is picking up pace.There are multiple reasons for this change in working demographic: we’re living longer and are healthier and fitter; investment returns are low reducing the bought value of pensions; the cost of living is higher and people simply can’t afford to retire. But one reason that is having a big impact is the abolition in 2011 of the Default Retirement age (DRA).

Implemented in 2006 the DRA allowed employers to force their staff to retire at 65 and although staff could request to stay, employers were under no obligation to comply. But fierce lobbying from organisations such as Age UK led the government to reconsider and eventually scrap the legislation, accepting that it was unfair and counterproductive.

Essentially businesses can only dismiss over-65s on the same grounds as their younger colleagues: conduct, performance or redundancy.

However, the recently publicised UK Supreme Court case and subsequent Employment Tribunal of Seldon vs Clarkson Wright & Jakes, in which lawyer Leslie Seldon lost his six-year battle against being forced to retire at 65, has potentially paved the way for more employers to enforce their own retirement policies.

Although ‘retirement dismissal’ is considered unlawful direct age discrimination, the court ruled that the business could enforce its retirement policy on the grounds that it was "objectively justifiable" and was a proportionate means of achieving a legitimate aim.

This has, unsurprisingly, given rise to a number of concerns for both employers and their staff.

Social criteria

BPIF employment law solicitor Carole Banwell says that early indications in the development of case law surrounding retirement policy suggest that only "social policy" aims, staff retention and planning, and intergenerational fairness and dignity, will make the grade.

She says: "Whether the retirement policy adopted by an firm is considered a proportionate means will be very fact-specific and, to be accepted by the courts and tribunals, will need to be underpinned by hard evidence that there is no other, less-discriminatory way to achieve the aims."

The BPIF has experienced surprisingly few retirement claims from its members, according to Banwell, with the key to avoiding them being effective, rather than negative, and routine performance management.

BPIF chief executive Kathy Woodward says that an increasingly ageing workforce, although offering plenty of opportunities, could indeed result in some negative practice.

"Some will find their ability to consistently perform their roles to the required level increasingly difficult, which could project both the employer and employee into potential negative performance management processes," she says.

She advises businesses to think about how they can accommodate different working patterns and "twinning arrangements" with less experienced workers to ease the pressure on both the organisation and the employee.

But Woodward warns that if not managed correctly, businesses could face age discrimination claims, poor perception from staff, reduced productivity and increasing resources "sucked into individual performance management situations".

One HR specialist in the print industry told PrintWeek that an emerging theme, particularly among some smaller companies, was that people who had been expected to retire simply haven’t.

"The main consequence sadly being that those who would have been ‘good leavers’ had they left at 65 have ended their careers as ‘bad leavers’ on performance grounds, or we have had the fun and games of trying to get medical evidence to support the company’s assertions that the individual is no longer fit to carry out their duties."

But George Thompson, managing director of printing recruitment specialist Harrison Scott Associates, says that employers are looking for more "positive ways" to incentivise retirement such as ‘golden goodbyes’ and where that is not possible he says he is seeing a lot more discussion taking place.

"In the printing industry, managing directors are normally very hands-on and know their staff extremely well. They are often very entrepreneurial and will tend to be more flexible and open with their employees.

"We can’t deny that some employers will implement minimum standards of performance to effectively manage people out, but I really think there are more people talking about a fair means of doing things than anything else," he says.

Thompson also feels that it is unlikely, just because the DRA no longer applies, that there will suddenly be a glut of over-65s demanding to stay in their jobs.

Forum of Private Business policy advisor Rob Downes agrees.

"The more physically demanding a job, which applies to the printing industry, the sooner a person will be unable to manage. It’s quite likely that an elderly employee who finds a job is becoming increasingly difficult would not want to carry on," he says.

Downes says that if a person is fit and capable, of course they should be allowed to carry on, not least because of the wealth of experience they can share, but that to prevent coming unstuck or "landing themselves in a tribunal" employers need to be armed.

"Our advice would be to have proper HR systems in place, and if in doubt, seek legal advice. New pieces of legislation like this show why companies have to be on the ball. Mistakes can be costly and with the average tribunal cost at around £8,500, prevention is always better than cure."


OPINION

Employing older workers makes good business sense
Michelle Mitchell, charity director general, Age UK

Over the past 20 years, average retirement ages have been steadily increasing. With state pension ages set to rise and a continued squeeze on living standards, it’s reasonable to expect that this trend will continue for the foreseeable future.

In short, more older workers are willing and able to continue.

Since the end of the Default Retirement Age in 2011 it’s illegal to force people to retire unless it can be ‘objectively justified’ – and this will be exceptional. Employers will have to look at different ways of managing their workforce. And although this may be a challenge in the short-term, if done well it can bring significant longer-term benefits for business.

If there’s one take-home message from several decade’s worth of medical research into ageing, it’s that age cannot and should not be used as a proxy for ability or capability. It’s therefore inherently unfair to stop everyone from working beyond a particular age.

Last year’s judgement by the Supreme Court on the case of Leslie Seldon laid the principles for future justification of direct age discrimination. It found that assuming forced retirement is dignified "sounds suspiciously like stereotyping", and that while it is still possible for employers to justify this practice the test for proving such measures are "appropriate and necessary" has been made harder to pass.

Employers should consider ‘reasonable adjustments’ to the workplace. BMW recently demonstrated that by making some changes to a production line, for example changing the lighting and providing chairs, while staffing it entirely with older workers, productivity increased 7% in a year compared to a standard mixed-age line.

All these lessons need to be taken on board by employers, particularly in industries such as printing, and adopted in each and every workplace. It’s good for older workers, good for skills, and very good for business

 

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