The old-timer on the left has a lifetime of experience to offer, but the whippersnapper on the right is an IT graduate and an ace with a mouse. From 1 October regulations outlawing age discrimination come into force and you’ll have to treat them both equally if you don’t want to end up in an employment tribunal.
White men of construction: your time has come. No longer must you remain at your desks while others win five-figure compensation claims in employment tribunals on grounds of race or sex discrimination. From 1 October, you too can have your day in court as the EU’s new age discrimination laws come into force.
Whereas earlier legislation on sex, race, disability and sexuality discrimination have not had a huge impact on the overwhelmingly white and male construction industry, age is expected to make a much bigger splash. The Employment Equality (Age) Regulations 2006 apply to every worker from school leavers to retirees and relate to just about every interaction between companies and their staff. What’s more, claims can be unlimited.
All this has some employers quaking in their boots. Lawyers, meanwhile, are gleefully anticipating a litigation frenzy and bandying around phrases like “the biggest piece of employment legislation in 30 years”.
“The legislation is so complicated that it’s going to lead to a rash of frivolous and malicious unfair dismissal claims. The employer will have to pay its legal costs whereas the employee can get legal aid,” worries contractor Colin Harding. “They’re very distracting, these cases, and they have to be taken seriously because claimants nearly always have legal representation.”
In their simplest sense, the regulations make it illegal to treat anybody differently on account of their age. But the way they are implemented is far from straightforward.
The rules outlaw a range of common employment practices, such as specifying how many years of experience job applicants must have, rewarding long service with extra holiday or adopting a policy of last-in, first-out for redundancies. Employers can still do these things, but they will have to prove there is a “core business reason” for doing so. “It’s going to be jolly, jolly hard,” warns Edward Goodwyn, a partner in the employment department at Pinsent Masons. “The guidelines make that perfectly plain.”
Retirement is one of the biggest issues: employers will have to adhere to a strict prenotification procedure of letter writing, hearings and appeals – or it will automatically be considered unfair dismissal (see “Five new ways to break the law”, below).
The legislation is so complex it’ll lead to a rash of frivolous and malicious unfair dismissal claims
Colin Harding, George & Harding
Such a wide-ranging law also throws up unexpected contradictions. Building columnist and Gleeds senior partner Richard Steer complained three weeks ago that the regulations remove the retirement date from partnership contracts and could cause stagnation and recruitment problems for practices set up in this way. Companies are also bracing themselves for the impact on the complex area of pensions, although they’ve got until December to comply there.
The regulations cover not only direct but indirect discrimination. For example, requesting that job applicants have five years’ experience discriminates against people under 21 who have not been working for that long, and specifying that they must be a graduate is unfair to people over 50 who are less likely to have gone to university.
It’s impossible to know how strictly the rules will be implemented. Hundreds of pages of guidelines have been produced but, like previous employment legislation, it will all depend on case law. “The big question is how litigious people will be,” says Goodwyn.
It is hard to gauge how ready the industry is for the regulations. While most companies claim they’re up to speed or that much of the legislation is common sense and they were doing it anyway, a quick scan of the job ads in Building still reveals turns of phrase that will be risky to use come Monday.
For larger companies with dedicated human resources departments, complying with new law is all in a day’s work. Andrew Edge, the head of HR operations at Bovis Lend Lease, has spent about five months preparing. “I’m very close to signing off a new application form. It’s no longer mandatory to disclose your age, but we do have to monitor to make sure the age of people who are appointed doesn’t differ significantly from all those who applied. There will be a bit you tear off [the form] before it goes further in the process.”
Age or time served in the company will no longer be a factor in choosing which Bovis staff are sent on training courses. Edge is also about to kick off a £10,000 programme to train managers in how to apply the rules when recruiting employees.
He believes, though, that construction will have less difficulty complying than other industries where he’s worked. “In this sector, experience and grey hair count for something, much more than in retail. A lot of clients like the comfort factor of dealing with people not in the first flush of youth who’ve seen problems before and know how to tackle them.”
In recruitment ads you will have to say less and less – it will have to be pretty bland. You can’t use words like ‘junior’ or ‘senior’
Bel Appleby, Ridge
At Ridge, a multidisciplinary consultant with a staff of 180, HR manager Bel Appleby has also attended briefings with lawyers. “A lot of them are scaremongering. But it is going to be difficult, we’re going to have to be more aware.” She agrees that recruitment will be most affected. “You have to say less and less – it will have to be pretty bland. You can’t use words like ‘junior’ or ‘senior’.”
Ridge already allows staff to work on past 65, but Appleby gives one area where firms might want to discriminate against older job seekers: succession planning. “You start recruitment for a successor two or three years before someone very senior leaves the business. If you’ve got someone in their sixties, you’re not going to recruit someone of the same age to replace them.”
It is the industry’s many smaller firms, without the resources to hire HR teams and lawyers, that are in gravest danger of falling foul of the law. “There’s a lot of fear in the small business community,” says Simon Briault, spokesman for the Federation of Small Businesses. “They don’t really understand their obligations because the way the legislation is drafted is so woolly. They will probably find themselves sitting in employment tribunals. It could be very disruptive and for construction firms with tight margins it could be the end of the road.”
For these firms, retirement will be the biggest flashpoint, believes Goodwyn. Failure to follow the prenotification procedure means firms will automatically be liable for four to six weeks’ pay. “With the timeframes and all the meetings you have to hold, it will be easy to trip up on red tape. If the systems aren’t set up, reminders won’t be triggered. It’s easy to make a hash of it,” says Goodwyn.
Gerry Lean, industrial relations director at the Construction Confederation, agrees. “It places a pretty significant administration burden on employers. How many smaller firms are going to do this? Most only wake up the week before the bloke’s 65th birthday.”
Of course, the amount of trouble firms get into will depend on how willing people are to bring claims against them. In a survey carried out in August by recruitment consultant Poolia Parker Bridge, three-quarters of under 25s were aware of the legislation, compared with just under half of 45 to 54 year olds. Nevertheless, claims are more likely to come from older staff who have less to fear from blotting their copybook with future employers. In this survey, one in eight of the 45 to 54 age group said they had suffered some form of ageism.
“A lot comes down to awareness of rights,” says Richard Linskell, an employment partner at Dawsons Solicitors. “People are generally aware that they have more employment rights, but it’s whether they put two and two together and realise they’ve got a claim.”
Lean thinks they will. “We live in an increasingly litigious society,” he says. “Guys get down the pub, someone says I’m going to claim for this, no-win, no-fee lawyers obviously ramp it up and these things get their own momentum.”