Age before beauty

Age is a sensitive subject. Just recently a 53-year-old maitre d' at Gordon Ramsay's restaurant in London's Connaught hotel claimed that he was sacked in a campaign to force out older staff. Although this argument wasn't the reason that he won the subsequent tribunal, the case highlights an increasingly prickly area, because by 2006 there will be a law against ageism.

The details of how the EU directive behind this will be implemented in the UK won't be known until the autumn, but employers should take note that it is likely to have more wide-ranging effects than any other employment law, including statutes concerning sexism. Not only will it embrace every worker from the time they are recruited through to their dismissal or retirement, it will have an impact on areas such as the minimum wage, training and redundancy.

Off-loading staff
Such are the implications that observers fear some unscrupulous employers might be tempted to off-load older staff members before the law comes into effect. Certainly, employers will have to start looking at their employment practices now if they are to be on top of the situation by 2006. Nigel McEwen, a partner at law firm Tarlo Lyons, reckons they should pay particular attention to training.

"In a recent survey," McEwen says, "nine out of 10 people over 50 said they didn't think they got proper training, because employers don't invest in people near the end of their career. The new law will mean they can claim discrimination." And he warns that everything will be open to scrutiny. "You won't, for instance, be able to advertise for someone ‘energetic'," he says, "as that will discriminate against older people, or alternatively for someone ‘experienced'."

But where will it stop, and will it be practical in the hospitality industry? Will, for instance, the gorgeous young things staffing Schrager's trendsetting hotels soon be replaced by doddery old duffers? No one from Schrager Hotels could comment, but Juliette Joffe, co-owner of the seven-strong world music-themed Giraffe restaurants, makes no bones about the fact that older people would not fit into her funky outlets. "It's not that I don't want them," she says, "it's just that they're wrong." She adds that older people don't even apply for jobs at Giraffe. "The average age of staff is 19-26," she says. "We are very busy and people need to put in the hours. It's a young people's game."

Not necessarily, says David Goldfarb, director at recruitment company Mayday, who points out that unsocial hours or shiftwork often suit older people. "Look at those who work at B&Q or Homebase," he says. "They can play golf during the day and they aren't so bothered about going to a party every Saturday night."

But come on, take the fast-paced conveyor-belt service at restaurant chain Yo! Sushi - is it really practical to have older serving staff? Operations director Gary Thomas says it's not an issue he has had to wrangle with as, like Joffe, he finds few people over the age of 40 apply. "But they would absolutely fit in," he adds. "Our customer base is broad, so our employees can reflect that."

He adds that while the pay and required skills of the servers tends to attract young students, management positions that need greater experience pull in older applicants. Besides, the six-year-old company has developed managers who are now in their 40s. "People are ageing with this company," Thomas says, "and, when I am recruiting [at management level], experience is critical."

But perhaps the new law is a red herring. Perhaps the debate should not be about whether older people are equipped for the job but, as Goldfarb points out, whether employers have woken up to the fact they will have to embrace older workers to plug a shocking skills shortage within the next few years, caused by a declining birth rate. Government statistics show that, by 2011, some 35% of the population will be aged over 55; only 12% will be aged 25-34.

Goldfarb hits the nail on the head when he says: "I hope employers are realising that there is a dwindling supply of young folk, so there will have to be a swing to taking on older staff or they won't have any staff at all." The bottom line is that competition for staff will heat up across industries (not just within them), so employers will have to start making themselves more attractive to older workers.

Lena Joffe of Joffe Lloyd Associates, a consultancy for companies wanting to implement age-diversity policies, argues that employing staff with a range of ages gives a business access to a wide pool of experience, while older people make good mentors - and are absent less. "A balanced-age workforce reflects more accurately the age profile of a business's customers," she says, "and it has been shown that customers relate well to being served by staff of their own age. Also, recruitment costs go down as staff turnover lessens significantly."

But, unlike Goldfarb at Mayday, Lena Joffe reckons older people may not be as attracted to industries that operate on shifts or which need seasonal staff. "You need to look at how you make your environment more welcoming," she says, "and to attract older staff you will have to place advertisements where older people will see them."

There are obviously challenges ahead for employers but, on the bright side, Hilton's Andrew Johnson, HR director for the UK and Ireland, believes that the new laws will help to focus the hospitality industry. He says: "All the laws - ageism, sexism and so on - will ensure people will develop a robust approach to recruitment and hone skills, so this will drive professionalism."

Johnson says that Hilton already has an 18-70 age range so, as a large, traditional company, is it more geared up to benefit from older workers? "We wouldn't want an older person if they were not the best person for the job," he says. "But staff should understand guests and have the life experiences to relate to, say, a guest with children or an older guest - and there tends to be a lower absence rate among older staff."

For Johnson, however, there are bigger issues at stake. "The Government needs to make changes to pensions and other benefits, such as medical and life insurance," he says. "People look to reduce their hours when they are older but, if they have a final-salary pension, that won't be attractive. The challenge will be to provide the right benefits for an ageing workforce."

There are rumours that this summer the Government is likely to set a mandatory retirement age of 70 to tackle the pensions crisis. McEwen at Tarlo Lyons has the last word, pointing out that the Government will also have to look at discrepancies in the minimum wage between workers under 22, who get £3.60 an hour, and those aged 22 and above, who get £4.20. "A lot of people think this law is about older people," he says, "but younger people will also get rights."

What the law says

There are already laws against sexism and racism; in 2004, the anti-disability discrimination law comes into effect, and by 2006, there will be legislation against ageism.

The European Framework Directive, which deals with equal treatment in employment, covers direct and indirect discrimination, harassment and victimisation. It does, however, recognise that there should be an exception where there is a genuine occupational requirement for an employee to be of a particular age, such as in the theatre.

It also acknowledges that there will be situations in which differences in treatment are justifiable and should not constitute unlawful discrimination. These might include fixing a minimum age where seniority of service is relevant, offering enhanced benefits to longer-serving employees, and fixing a maximum age where the investment in training would justify an expectation of a reasonable period of service before retirement.

Until the directive is brought into force, discrimination on grounds of age is not unlawful in the UK. There is, however, a code of practice that deals with the key aspects of the employment cycle.

• Recruitment should be on the basis of required skills and abilities.
• Selection should be on merit on grounds of skills and abilities.
• Promotion should be based on the ability or demonstrated potential to do the job.
• All employees should be encouraged to take advantage of training opportunities.
• Redundancy selection should be on grounds of objective job-related criteria.
• Retirement schemes should be fairly applied in the light of individual and business needs.

Source: Alexandra Davidson, partner at law firm Berwin Leighton Paisner

The cost of not complying

The impact on companies that fail to comply with age legislation could be significant, says Lena Joffe of consultancy Joffe Lloyd Associates. She points out that the number of employment tribunal applications in the UK has trebled in the past 10 years.

Although age discrimination is not yet fully recognised in UK law, other discrimination-case awards give an indication of the levels of compensation that can be expected. The average award in disability and race cases is nearly £10,000, while sex equality cases average more than £7,000.

On top of this, legal costs for defending a discrimination case amount to £5,000. Companies incur about the same again in management costs.

In the USA, where similar laws have existed for 40 years, one-fifth of all discrimination claims are based on age, and age discrimination costs are higher in the USA than for other forms of discrimination.

Why wrinklies are the way forward

• Birth rates have been in decline since the 1960s, so fewer young people are entering the labour market.
• Nearly one in three of the workforce is now over 40.
• By 2011, 35% of the population will be aged over 55.
• By 2011, 18% will be aged between 45 and 55.
• By 2011, only 17% will be aged between 16 and 24.
• By 2011, only 12% will be aged between 25 and 34 (a marked decline from 1991, when they accounted for 16%).
• There is an untapped pool of people aged 50-65 who are not in work.
• Only 60% of men in the 50-65 age group are employed - that's 40% potentially available for work.
• More than half of employees now retire before the official company retirement date.
• Older workers are more ready to work part-time than younger workers.
• Older workers stay in the same job longer.

Source: Lena Joffe, Joffe Lloyd Associates, and Wrinklies Direct

Good practice

• Provide older staff with new skills through training.
• Advertise jobs with care - never ask for "experienced" or "energetic" staff, for instance.
• Be aware of the implications when the upper age limit is set for retirement - how will it affect calculations for pensions?
• To prevent a lawsuit in the event of dismissal or not employing a candidate, never ask for a date of birth.
• In appraisals, be careful in wording how the employee is performing. Never say, for instance: "I wouldn't expect someone your age to have to do this."
• Ensure fair training opportunities for all ages.
• Ensure you have a good case for dismissal and that age cannot be claimed as a factor.

Contacts

Nigel McEwen Partner at Tarlo Lyons
020 7405 2000

Alexandra Davidson Partner at Berwin Leighton Paisner
020 7427 1313
alexandra.davidson@blplaw.com

Lena Joffe Joffe Lloyd Associates
020 8995 6796

How B&Q did it themselves

In 1989, hardware retail chain B&Q opened a Supercentre at Macclesfield in Cheshire, staffed entirely by recruits aged over 50. Within six months, the results of the experiment were clear - in profitability, customer service and staff turnover levels, it had easily outperformed other B&Q stores.

Profits were higher by 18%, staff turnover was six times lower, and there was 39% less absenteeism and 59% less shrinkage. In addition, there was an improved customer perception of service and an increased staff skill base.

In a company that has 30,000 staff and hopes to increase the number of its warehouses from 80 to 175 by 2006, the recruitment of older staff has won the company not just good press and accolades but a well-balanced workforce. Feedback has shown that the older staff see their most important role as mentoring and sharing the benefit of experience with younger employees.