Advertising for ‘young, energetic’ workers, promoting on the basis of age and allowing ageist banter to continue in the workplace are just some of the issues that could wind employers up in the dock as of 1 October when the age laws come into play; Annie Hayes reports on how HR Directors from leading brand-name companies including John Lewis, AstraZeneca, Linklaters, Deloitte and Ernst & Young have prepared their organisations for the impending laws.

As of 1 October 2006 it will be unlawful to discriminate against employees on the grounds of their age. This will impact on all aspects of the employment relationship from recruitment to retirement and damages for successful claims will be uncapped.

Ernst & Young, the tax, auditing and advisory outfit and AstraZeneca, the pharmaceutical giant began their preparations a year ago.

Neil Osborne, AstraZeneca’s Head of Employment for the UK said: “Age already featured as part of our equal opportunities policy so our employees were used to thinking about it. We decided, however, to put a consultative committee in place last October in preparation, made up of employee representatives both unionised and non-unionised to consult with regarding the changes.”

Ernst and Young also put in place a working committee twelve months ago. Paul Quinlan, Senior Employee Relations Consultant for the firm said: “A year ago we put in place a project group. It was difficult because the legislation wasn’t set in stone at the time. It helped that we were part of the Employers Forum on Age – initially we set about making an initial assessment of our policies and questioning whether we had enough information in place to make preparations for change.”

For both these organisations and others the new legislation has permeated every aspect of the employment relationship meaning that employers have had to look at every area of the employment cycle from hiring to firing and leaving the organisation.

Recruitment policies:
Paul Cushing, MD of RPCushing Recruitment told me that a key challenge for recruiters has been training them to stop hiring employees that fit their stereo-type, if it’s a company that is thought of as young or mature for example. One way of achieving this he says is by adopting a competency based approach to recruitment ensuring that businesses do not exclude any potential candidates.

“Both older and younger candidates have something to bring to the table. For example, an older candidate may have extensive sector knowledge and experience, or want a stable and secure ‘job for life’ now that their children have flown the nest. A 20 year old graduate might be full of energy and new ideas, keen to make an impression and climb the ladder in their first ‘real’ job. They might be flexible and able to work long hours to impress, due to their lack of family commitments outside of office hours. There are definitely advantages to hiring candidates at both ends of the age spectrum.”

Advantages aside, in practice, for many employers this has meant a large-scale review of their recruitment policies.

John Lewis, the retailer told me that they began a review of their recruitment practices ahead of the legislation and said that whilst it wasn’t the biggest driver in designing the new process, they ensured that it complied with any guidance given.

This review also involved revising the John Lewis Department Stores’ application form including moving the applicant’s date of birth from the main part of the form to the separate monitoring form. Launched in August, this ensures that when branches are considering whether an application should progress to the next stage, it is based on skills and relevant qualifications rather than any other factors.

For law firm Linklaters a thorough review meant making certain that recruiting partners were also complying.

Jill King, HR Director for the firm said: “We’ve carried out a systematic and thorough review of all our HR policies and practices using the helpful Policy Review Toolkit provided by the Employers Forum on Age. We’ve also worked with external suppliers, such as recruitment agencies, to ensure those working on our behalf have a compliant and enlightened approach. This is all part of our talent strategy which includes a commitment to a diverse talent pool.”

For Osborne, preparations involved training recruitment partners including writing job adverts and managing the selection process.

“There weren’t massive amounts of changes that were required but we had to get our recruiters to think about things differently for example working out what value phrases like: ‘Ten years experience’ was short for.”

Like John Lewis, Ernst and Young also had to move date of birth references from applications to their diversity page and also made sure that there was a good awareness of the legislation and its meaning amongst recruiting partners.

“One example of how things can go wrong is when a recruiter asked an American candidate how old he was. There was quite a reaction, especially when he didn’t get the job,” comments Quinlan.

Elisabeth Vale, HR Partner at Deloitte told me that the firm took a wider approach: “The most important thing for us, is getting the right people to do the right job for our firm and its clients. Our values and attributes inform who we hire and how they will feel about working with us.

We are determined however, to look in every possible corner of society to find people who fit our talent criteria. Our talent strategy is critical to the success of the firm and consequently we keep it under constant review. Any new employment legislation would have to be reviewed in the context of our business strategy and this is the case for the anti-age discrimination proposals.”

Redundancy policies:
Currently, statutory redundancy payments are related to the employee’s age, length of continuous service with the employer, and weekly pay up to a maximum.

Many organisations have had to remove the age-based criteria for such payments.

John Lewis told me that prior to the age legislation their redundancy package was based on a formula that took account of pay, age and length of service.

However, this has now been reviewed and as a result the Partnership element of a redundancy payment is calculated with reference to pay and length of service only.

And the same is true for AstraZeneca who previously based their redundancy payments on a complex calculation taking into account age and service.

Osborne comments: “We’ve now changed it so it’s just based on length of service not age so employees get a fixed multiplier of salary for every year of service.”

Retirement policies:
A change to retirement ages has been by far one of the biggest changes to employment and for many businesses has meant a gradual process of consultation.

After digesting the guidance set by the DTI, from July 2006 the John Lewis Partnership offered options to staff who wished to continue working past the current retirement age, including the opportunity to look at flexible working.

AstraZeneca updated its retirement policy because it previously had the age fixed at 62: “We did this in a low-key way because we didn’t want our employees to feel they had to work until they were 65. The vast majority of our employees that are approaching retirement are in final-salary schemes which we closed in 1996 so they’re in a good position and many have chosen to retire anyhow at age 62 but if people want to work beyond 65 then we look at it,” comments Osborne.

Ernst and Young also had to move their retirement age from age 63 to 65 and for certain ages this meant increasing contributions.

Long-service awards, management, harassment and bullying:
Quinlan also explains why changes were made to their long-service awards policy and performance management processes:

“We used to make payments, fairly small ones to our employees who’d served at least 25 years, this was part of a retention initiative – we’ve had to justify the business case for that. We’ve also had to change our insurance provision for employees raising the ages from 62 to 65 and ensuring our life assurance policies don’t expire too early.

“Our performance management reports also used to include date of birth – we’ve decided that it is no longer relevant especially for promotions which are decided by a round-table committee that no longer takes age into account. We’ve additionally had to make sure that pay and benefits are no longer linked to service – so just because someone has been here for twenty years they’re not paid more – it’s based on performance and grade.”

But preparations haven’t just been confined to policy upgrades, Quinlan points to the more sensitive cultural issues such as managing age-related banter in the workplace.

“There is a wider societal issue there – age has become more of a humourist topic. We looked at whether we should be policing cards that say things like ‘You’re over the hill’ – but decided that was going too far – the aim is to have an environment that is free of ageist behaviour,” but says Quinlan without the need to compromise the humanistic elements of working with people, clamping down on birthday celebrations for fear of litigation he believes is one step too far at this stage.

Communication channels:
Of course another huge challenge has been communicating the changes effectively. At John Lewis the new options for retirement were communicated through the Gazette, the Partnership’s magazine while personnel teams from each branch were being made aware of the new procedures and were given copies of presentations to highlight the new addition to the policies.

AstraZeneca chose the softly, softly approach: “We didn’t announce the changes with a big fanfare. We sent letters to the people approaching retirement and talked to their managers about how to handle it,” says Osborne.

Whilst at Ernst and Young they posted information on the intranet and provided training as a means of briefing managers and employees about the forthcoming regulations.

For many employers the forthcoming regulations represent one of the most complex, sensitive and far reaching changes in employment law since the 1970’s. Whilst many of the larger organisations have had the wheels in motion for twelve months or more others are not quite as prepared. A recent survey by Peninsula employment law firm shows that with just less than two weeks to go until the new age discrimination regulations come into force, 86 per cent of employers have not changed their HR procedures and practices in readiness for their new obligations.

Peninsula’s senior employment law specialist Mike Huss said of the findings:

“It’s quite shocking to see many businesses are not yet prepared for the new measures. The new laws will open the door to a rise in employment tribunal claims.

“Race discrimination, sex or religious discrimination applies generally to small numbers of people. Age discrimination applies to every single employer and every single employee. Procedure is everything, and awards for discrimination are unlimited. Employers must therefore get it right.”

As our HR Directors above have shown changes can be made to ensure that compliance is met but employers must act now to make sure they don’t fall foul of the new laws.