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Comments from ACCA
October 2003

ACCA is pleased to have the opportunity to comment on this consultation document from the Department of Trade and Industry.

ACCA supports the introduction of statutory rights on this matter. Eliminating unfair discrimination on the basis of age is socially just and an acknowledgement of the demographic changes taking place in UK society. It will also constitute an essential legal foundation for the Government�s aim of encouraging more of the workforce to work longer. Without such a foundation, the likelihood of individual workers being in a position where they can delay drawing their state or occupational pensions will be much reduced.

Our principal concern is that, in implementing the Directive on equal treatment, individual businesses should not be precluded from adopting recruitment practices which are appropriate in the context of the specific markets in which they operate. Many businesses direct their products and services to particular age groups, most obviously the young but increasingly the middle aged and elderly too, and they adopt marketing strategies which enable them to reach those target groups. Recruitment is an integral element of such strategies. In our view, where there is a demonstrable commercial imperative for a business to recruit staff of a particular age range for particular positions, in the context of the particular product or service that the business is selling, then this should be deemed to be a �legitimate aim� for the purposes of article 6 of the Directive and should be capable of exemption from the basic prohibition on discrimination.

Our other main concern is connected to the proposed abolition of mandatory retirement ages. Abolition may be an inevitable consequence of implementing the Directive. But it would create its own problems if employers were required to retain staff on the payroll past the point where they were physically and mentally capable of doing their jobs or where they retained a real commitment to their work. Even if compulsory retirement ages are invalidated, we consider that employers should be able to retain some degree of discretion as to whether to keep on employees in their 60s and 70s.

Our comments on the specific questions posed in the document are set out below:

Chapter 3: Outlawing Age Discrimination

We consider that it should be possible for employers to discriminate at the recruitment stage if the hiring of individuals of a certain age range is �appropriate and necessary� in the context of the type of position concerned and the commercial focus of the company. We do not believe that a provision of this kind would amount to a general loophole. It would only apply to positions where the marketability of a business�s products or services were enhanced by the involvement of individuals of the same age range as the intended consumers, for example, shop assistants in retail businesses which concentrate exclusively on fashions for the young and sales persons for firms which sell insurance products and holidays aimed specifically at the middle aged and elderly. We believe it is reasonable to argue that the presence in direct sales roles of persons who are in the same age range as the intended consumers is or can be a significant marketing advantage; by the same token it would be commercially detrimental to companies if they were prevented from availing themselves of this advantage.

Positions in such businesses which were not related directly to sales would not qualify for exemption of the kind we are proposing. While we appreciate that our proposal would constitute �discrimination�, we believe that legislation should not restrict unduly necessary commercial freedom.

Separate from the above point, one of the specific practices listed in para 3.17 is �promotion�. We query whether promotion should be capable of being justifiable expressly on the grounds of age. The suitability of a person for promotion should depend on his or her qualities, experience and aptitude. Chronological age should not be a justifiable factor.

The aims set out in paragraph 3.15 seem reasonable. Further to our comments above, however, we consider that it should also be a �legitimate� aim to maximise the marketability of a firm�s products or services (subject to the action taken being appropriate and necessary).

Chapter 4: Retirement Age

We consider that the abolition of fixed retirement ages would send a clear message to workers that they will not be expected to leave their employment solely by virtue of having attained a particular age. This would help reinforce the Government�s objective of encouraging more of us to defer drawing our pensions.

Abolition would certainly produce the potential for disagreement on this matter.

We believe that many employers would not appreciate being obliged to keep workers on the payroll whose mental or physical energy levels were in decline, and will wish to be able to continue to retire people in that category rather than risk causing damage to the efficiency and vigour of their businesses. We accept that the trigger point for a decline in personal effectiveness may not in all circumstances be 60 or 65 � that point may come earlier or later depending on the individual. But in principle, it would seem to us wrong if employers did not have some discretion as to whether or not to retain a worker in his or her 60s or 70s.

It will be difficult, we believe, for most employers to argue that a particular retirement age, be it 60, 62, 65 or 70, is �objective� and �necessary� in the terms of the Directive. An alternative approach may be for UK law to recognise the right of individual employers to adopt �provisional� retirement dates; employees would be entitled to retire once they reached that age but could continue if they wished. Continued service could, however, be made subject to periodic performance and efficiency appraisals. If, on the basis of these regular appraisals the employer concluded, fairly, that the worker concerned was no longer capable of performing effectively in the context of his or her role, then the employer would be entitled to insist that the worker be retired (as opposed to dismissed, thus avoiding the unpleasant connotations of dismissal). The assessment of efficiency would have to be carried out on an objective and non-discriminatory basis. This idea would, we accept, require the addition of another aim in the list set out in paragraph 3.15, viz the continuing efficiency of the employer�s workforce.

Other than in respect of point (e), no.

Chapter 5: Unfair Dismissal

As suggested in our comment above, we believe that it should be possible for employers to retire individual workers where they exceeded a provisional retirement age and their subsequent performance was deemed to be unsatisfactory on an objective basis.

Chapter 7: Recruitment, Selection and Promotion

Yes: the cost of training new recruits to attain the required level of effectiveness is a legitimate concern for employers.

Point (e) seems to be sufficient for this purpose.

As we said in our response to the questions posed in Chapter 3, we suggest that employers should, in defined circumstances, be entitled to recruit staff from particular age groups.

Chapter 8: Pay and Non-pay Benefits

Yes. In our view, benefits which are calculated on the basis of length of service are not in themselves discriminatory as long as they are offered to any employee who fulfils the conditions. Non-pay long-service benefits are particularly important in the case of employers which cannot afford to offer competitive wage levels.

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