Life expectancy has increased by 0.15% from 2022 to 81.77 years, which is a further 0.15% increase on 2021. As the state pension age is also scheduled to increase to 68 between 2044 and 2046, employees are either choosing to stay in employment for longer or because financially they need to. This can create both challenges and opportunities for employers.
Challenges and considerations
All employees benefit from legal protection against discrimination under the Equality Act 2010 (‘Act’). The following protections are those that are most relevant to the types of discrimination that can affect an ageing workforce including:
- Direct or indirect age discrimination
- Harassment on the grounds of age, sex or disability
- Direct or indirect disability discrimination
- Discrimination arising from a disability
- Positive obligation to make reasonable adjustments for disabled employees
- Direct or indirect sex discrimination
It is therefore important that employers consider their legal obligations under the Act and the risks associated with an ageing workforce. Employers should provide mandatory equality and diversity training for all employees, which should be in conjunction with an effective equality, diversity and inclusion policy to avoid discrimination in the workplace. Employers also need to be aware that employees have the right to request flexible working arrangements. This may become more frequent as employees draw closer to retirement and have the desire to gradually reduce their hours. Employers must ensure they consider any such requests in line with their flexible working policy and statutory requirements.
Whilst the default retirement age of 65 was removed in 2011, some employers have determined that the health and physical fitness of their workers is essential and have chosen to retain a mandatory retirement age to support intergenerational fairness or other types of diversity. However, employers need to ensure that they can objectively justify that default retirement age.
With the UK being in recession and the cost of living continuing on an upward trajectory, employers may be looking at restructuring or downsizing exercises resulting in redundancies. However, this can give rise to age discrimination issues and employers should seek legal advice to ensure that employees use a fair and reasonable selection criterion to avoid any potential age discrimination claims. Similarly, as employees get older, there is a higher risk of health issues which may amount to disabilities or deemed disabilities under the Act and employers must ensure they consider making reasonable adjustments to avoid the risk of disability discrimination claims.
The government has recently rejected a call to make menopause a protected characteristic under the Act, however employees may still bring claims for unfair treatment or discrimination as a result of going through the menopause or perimenopause, or because they are suffering from menopausal symptoms. There is a suggestion that older women are being driven to leave their jobs and citing menopause and the lack of related support from their employers as one of the potential reasons for quitting. That being the case, menopausal employees are potentially leaving employment at the peak of their experience, which will likely have an impact on business productivity and diversity.
Employers should also carefully consider their legal obligations under the Act in relation to their selection processes for internal promotions and recruitment to avoid the risk of age discrimination claims.
Opportunities and benefits
Older employees who have gained years of business skills and experience are able to use that knowledge and experience to transfer to junior employees through mentoring programmes. Older employees are also able to help with different customer bases and bring a different perspective to a business.
The UK has also faced a shortage of labour due to Brexit and COVID, which is likely to continue as younger people choose to remain in education for longer and entering the workforce at a later stage, and the baby boomer generation slipping into retirement. Clearly certain industries such as those involving physical labour may not see an increase in employees choosing to work for longer, however for most industries, businesses are increasingly looking to their older employees to fill any labour shortage gaps.
In relation to recruitment and promotion decisions, an employer may take positive action to improve age diversity, provided that certain statutory conditions are satisfied, and they do not exceed the limitations set out in the Act.
With the above challenges, also comes huge benefits to employers and businesses retaining and recruiting older employees. However, employers are reminded of their legal obligations to avoid any potential risks of age and disability discrimination claims and are encouraged to seek legal advice if they require clarity.