The legal considerations of managing an ageing workforce

As people live longer, they are likely to work longer too, and so it is no surprise that an increasing number of employees are planning to work past retirement age. From March to May 2019, more than half of the annual increase in the number of people in work occurred among those aged from 50 to 64 years, according to Office for National Statistics (ONS) figures. An ageing workforce brings with it a number of legal and ethical implications that employers need to consider. 

The Equality Act 2010 provides protection against different types of age discrimination, including: 

  • less favourable treatment because of age (direct discrimination);
  • the application of a provision, criterion or practice (PCP) that disadvantages a particular age group (indirect discrimination);
  • harassment related to age;
  • victimisation. 

Since the elimination of a compulsory retirement age in April 2011, it has been up to individual employers to decide whether or not to set retirement ages within their organisations. It is only possible to fix a retirement age for a job, and avoid this being discriminatory, if certain legal requirements are met. A fixed retirement age, which is on the face of it both directly and indirectly discriminatory, can be objectively justified if it can be shown that it is a proportionate means of achieving a legitimate aim. 

For direct age discrimination to be justified there must be a legitimate social policy aim, such as fairly distributing employment opportunities to both younger and older workers, or the efficient planning of the departure and recruitment of staff. Further, employers cannot just rely on their own private interests/business needs and they must also be able to support these aims evidentially and empirically. 

Businesses tend to wait to be approached about retirement age by an employee because the need to set a retirement age can be very difficult to prove.  Tribunals certainly set a high bar in this regard. 

Ethical issues for employers 

HR practitioners are likely to experience an increasing number of ethical dilemmas in this area. As workers live longer and working lives are extended, organisations need to tackle age discrimination in the workplace and work to change the negative stereotyping of older workers when it comes to both retention and recruitment. 

Whereas younger workers are often seen as motivated and keen to develop new skills, there is a common misconception that older workers are more likely to be slow, tire easily and have less interest in career progression and learning new skills. Organisations need to plan for an ageing workforce and harness the benefits. 

Key considerations 

  • The needs of older and younger workers may change at different career stages, but do not make assumptions. It is important to treat all workers as individuals. Consult with workers, taking a consistent approach with everyone, to get an understanding of their career goals so that you can plan accordingly;
  • Promote health and wellbeing and encourage workers to maintain good health. This will become increasingly important within the ageing workforce;
  • Set up initiatives to retain experienced workers and best utilise their skills and experience. For example, encourage coaching, training and mentoring of more junior staff;
  • Flexible working is key. Workers need flexibility at different stages of their working lives and a workforce made up of a diverse range of ages can provide the balance organisations often seek;
  • Provide workers with better financial guidance around pensions and saving for retirement. Whilst some older workers will choose to continue working because they enjoy what they do, others may still be saving towards retirement.