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Age laws could expose UK employers to £73 billion in litigation costs 3 April 2003
For the first time, the new age laws will rank ageism alongside other forms of discrimination, such as sex or race, giving employees the right to bring legal cases against their employers. In the UK today, 14%* of UK workers feel they have been discriminated against because of their age. To illustrate the scale of the problem, the EFA and legal firm Lewis Silkin have drawn up an estimate of the overall, long-term exposure to risk that businesses are facing: if all of these people pursued a claim under the new laws, total payouts could amount to £73 billion. In the first year of the legislation alone, it is estimated that UK employers could be facing legal claims in the region of £193 million. *CIPD Age, Pensions and Retirement Survey 2003 To help employers prepare for the legal deadline of December 2006, the EFA is launching ‘One Step Ahead’ , a practical Toolkit designed to ensure that employment decisions and policies are based on ability, not age. The Toolkit was developed with some of the UK’s leading employers, and is sponsored by The Royal Bank of Scotland Group. It consists of 20 checklists, which cover a range of essential employment issues, including recruitment, training, promotion, harassment, retirement and redundancy. Howard Davies , chair of the EFA , says: ‘It is essential that all businesses carry out a policy review now to see where age bias might be lurking. Many employers are under the impression that the 2006 age discrimination legislation will require them to make only minor adjustments to their recruitment and retirement policies – but they are in for a shock. We hope that the EFA Toolkit will be a catalyst for change, helping to take businesses beyond mere compliance with the new laws to the forefront of best practice.’ James Davies , from legal firm Lewis Silkin , the EFA member that calculated these figures, says: ‘We've looked into the potential implications of the new age discrimination laws – and the results only reinforce the need for employers to take the new legislation seriously. If they are not thoroughly prepared, they will be the ones footing the bill.’ How employers are working towards age diversity Amanda Jones, Group Diversity Manager at The Royal Bank of Scotland Group, which piloted the Toolkit, says: ‘Using the EFA’s ‘One Step Ahead’ Toolkit has been an invaluable exercise in helping us to identify areas that we needed to work on. This positions us well to maximise the business benefits that we so clearly see from having an age-diverse workforce and from recognising diversity in our customer base.’ Many other leading UK businesses including BAA, Manpower, Centrica, the Department of Work and Pensions, HM Land Registry, GlaxoSmithKline, Marks & Spencer and Tesco are already taking proactive, preventative measures by implementing the EFA’s ‘One Step Ahead’ Toolkit. ‘Processes to identify potential discrimination had focused on minority groups in the past’, says Stephen Golden, BAA Diversity Manager. ‘The Toolkit has not only helped us identify the changes we needed to make, but has also encouraged us to communicate the benefits of age diversity in the same ways we have done for other diversity areas.’ Ruth Hounslow, Public Affairs and Corporate Communications Manager at Manpower, says: 'To continue recruiting and retaining the best quality candidates for our clients, an age-balanced workforce is essential. Following an age audit, using the EFA's Toolkit, we are reviewing our company age policy and retirement plans, to further ensure the best workers in the labour market are recruited on the basis of skills and ability not age.' Every company should start by asking the EFA’s 10 essential questions:
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