With the phasing out of the default retirement age (“DRA”) nearly complete employers are now no longer able to compulsorily retire employees. Early reports suggest that very few employers have tried to maintain a fixed retirement age but those who have will have to be able to justify it by demonstrating that they have a legitimate aim and that settling on a particular retirement date is a proportionate means of helping them achieve it.

Increase in age discrimination claims

Statistics released by the employment tribunal services show that age discrimination cases are on the up. Although proceedings for almost all other areas of discrimination have remained relatively steady, 6,800 age discrimination claims were brought between April 2010 and March 2011, a 79% increase in comparison with 2008/09 figures, and a 32% increase from 2010.

Moreover, the average compensation awarded by the tribunals in age discrimination cases was £30,289 compared to £14,137 in disability discrimination cases, £13,911 for claims of sex discrimination, and £12,108 in allegations of race discrimination.

Managing an ageing workforce

So, with age discrimination claims on the rise, good management practice will become all the more important in managing an ageing workforce. The removal of the DRA provides the opportunity for employers to reassess the systems and processes used for handling employees and their performance. Effective workforce management involves recognising that employees of all ages can contribute to an organisation’s success while responding to their individual strengths at different stages in their careers.

Practical steps

Recruitment

First of all, employers must ensure that recruitment and selection procedures concentrate on job requirements and not candidates’ ages. Focussing on the type of experience required for the job, instead of years of experience, should ensure people of varying ages are not excluded. Employers should also make sure their dedication to age-neutral policies appears on job adverts where there is mention of your equality policy

Flexible working

Employers may also wish to consider offering flexible work patterns to attract employees of all ages. This approach supports age diversity, since people at all stages in their working life may benefit from greater flexibility.

Appraisals and Performance Management

Now is also a good time for employers to evaluate how appraisals and performance management systems operate across the organisation. Integrating workplace discussions into the appraisal system provides an ideal opportunity to communicate regularly with employees. Approaching these conversations with an open mind with a view to establishing an employee's future plans for the short, medium and long term and how these can be incorporated into the organisation’s future are all positive steps for organisations to take.

It is important however for employers to make sure their managers avoid questions or statements suggesting that employees should retire, or offering it as an alternative to an otherwise degrading departure from work. Anything too direct could be viewed as discriminatory as could any indication that an employee is thwarting a younger employee’s future career development. The aim should be to understand older employees’ future plans and to manage younger employees’ promotion prospects. Ensuring employees of all ages are involved in transparent career planning at regular stages will become invaluable in managing employees’ expectations while reducing the risk of inadvertently discriminating on the grounds of age.

Training

Training encourages staff to continue learning and increases productivity. It is important that employers make all employees aware of the various training and career development opportunities available. Clear communication will increase awareness of what training is available within the organisation as well as highlighting the benefit to employees’ career plans. The removal of the DRA also gives rise to some difficult issues for managers in dealing with an ageing workforce. Training for them can be crucial in encouraging understanding and awareness of the issues they may face and help in overcoming any barriers to change.

Promotion

Employers need to also make sure that they avoid age restrictions on courses or in connection with opportunities for promotion (unless any such decision can be justified), as failing to provide older employees with training may count as age discrimination. Older employees can be invaluable in helping to support and train new or less-experienced workers.

The Future

As the employment landscape settles down and as the majority of both employers and employees get used to operating without a retirement age it will be interesting to see what issues emerge but taking a practical approach and maintaining even handedness with all employees will stand employers in good stead and help them avoid becoming another tribunal statistic.

If you have any questions or comments on the above please contact Jill Bell, Claire Hendry or Olwyn Godfrey or your usual contact in theEmployment and Pensions Unit.

This bulletin is for general information only and does not constitute legal, investment or other professional advice. Please contact us should you require advice on any particular legal issue. Anderson Strathern LLP accepts no responsibility for any loss that may arise if reliance is placed on any information or opinions expressed in this bulletin.