Our Ageing Workforce
In a recent study conducted by HSBC, it was found that 19% of those questioned in the UK felt that they would not be able to fully retire. Government figures suggest that 7 million people are not saving enough for their retirement and with people living longer, any money which is saved has to stretch further.
What can we do now to help our workforce?
We can plan ahead. There are many ways to plan for the future. Some people will choose property and others, stocks and shares, but all employers should be thinking about their responsibilities to their employees under auto-enrolment NOW (see our article on this HERE).
How should employers deal with an ageing workforce?
One argument is that an older workforce can be an asset to a business due to its experience, loyalty and flexibility in terms of restructures or working patterns. However, others are concerned that retaining older employees means that younger people are not benefiting from as many employment opportunities as they may have done previously. Whichever view point is taken, employers should be mindful of their responsibilities towards all employees.
Recruitment, promotion and training opportunities – employers should not give preferential treatment to someone on grounds of their age, unless the age requirement is a genuine occupational requirement or is objectively justified. Employers also need to be mindful of the content of job advertisements to ensure they are not discriminatory.
Redundancy – redundancy selection should not be based directly or indirectly on age unless it can be objectively justified. Last-in-first-out selection criteria may indirectly discriminate against younger workers but it may be objectively justified if it is not the only or main criterion
Retirement – employers have two choices. First, they can abolish a fixed retirement age or second, they can retain one. However, if employers opt for the second option, they need to be very careful about doing so and will need to show that there is a legitimate aim to having a retirement age, that having the selected retirement age meets that aim and that it is proportionate to use that retirement age as a means of meeting that aim. Employers should be encouraged to have regular discussions with all employees about their future aims and aspirations. The important thing is for managers not to single out older workers for such conversations just to ask specifically about their retirement plans. By having these discussions, employers will be able to plan better for the future.
Provision of benefits – it is not unlawful discrimination for employers to stop offering benefits such as life assurance, health insurance and medical insurance to employees when they reach 65. This will rise in line with the state pension age.
Performance – some employers are not keen to address performance issues with a more mature employee for a variety of reasons. One of these reasons is that employers are concerned that accusations of age discrimination may arise. Performance issues need to be dealt with and as long as there is a performance issue and action is not being taken for some other reason, such claims can be usually be easily defended if they are in fact brought. Recent changes in the law introducing fees to the employment tribunal could well put vexatious claimants off taking matters further.