The Federal Government's recent proposal to increase the age pension age to 70 by 2035 has generated a great deal of discussion, not least from employees and employee organisations about difficulties already faced by mature age workers in obtaining and retaining work. The Federal government proposes to meet these concerns in part by employer cash incentives for hiring long term unemployed jobseekers aged 50+.

But should employers need cash incentives to employ mature age workers? Earlier this month we explored the benefits of attracting and retaining mature age workers with Sageco, a mature age workforce specialist consultancy firm.

On the flipside, employers already face hefty penalties for breaching laws that prohibit age-based discrimination in the area of employment. In this post, we summarise some of the key laws relating to age discrimination in the workplace.

Whilst there are some exceptions to the rule, employers in Australia generally cannot discriminate against employees (or job applicants) on the basis of age. Australia did away with the concept of compulsory retirement long ago, although there are a small number of occupations where age limits apply (for example, judicial officers). Prohibitions against discrimination on the basis of age now exist in federal and state anti-discrimination laws, and also under the Fair Work Act. The Fair Work Act now also contains specific provisions allowing employees aged 55 and above to seek flexible working arrangements.

Protections against age discrimination in the Fair Work Act are contained within general protection provisions which prohibit adverse action based on, amongst other things, age (see section 351). In April 2014, the Office of the Fair Work Ombudsman succeeded in its prosecution of an employer for breach of these protections.

The employee concerned was a long-serving restaurant employee who took a period of long service leave in April 2011. Upon his return to work, the employer told the employee that he would work part-time. Shortly after, the employer issued the employee with a letter informing him of its plans to terminate his employment on his 65th birthday, stating that it was "the policy of the company that we do not employ any staff that attains the retirement age, which in your case is 65 years". When the employee queried why his effectiveness as a food and beverage attendant at 65 years of age was less than his effectiveness at age 64, the employer advised the employee that it did not wish to enter into further correspondence with him.

The Court found against the employer, ordering payment of $10,000 to the employee, in addition to substantial monetary penalties against the employer and its two directors:Fair Work Ombudsman v Theravanish Investments Pty Ltd & Ors.

The conduct in this recent case was overt. However, unlawful discrimination may also be indirect or unintentional. In Hopper & Ors v Virgin Blue Airlines [1] a requirement that candidates demonstrate "Virgin flair", which was described as including a candidate's "ability to have fun" was found to discriminate on the basis of age where the recruiters themselves were young and gave a bias to "fun" based on their own age.

Employers may also run foul of their obligations by making assumptions about what an employee can or cannot do based on age. In Webforge Australia Pty Ltd v Richards [2] an employer was found to have unfairly dismissed a 65 year old employee after deciding that it would not be possible to train the employee in new technology to be used in his stock controller position. The then Australian Industrial Relations Commission disagreed, and awarded the employee the maximum monetary compensation available for unfair dismissal (26 weeks' pay).

Employers need to be mindful about how their recruitment, training and termination procedures may impact applicants and employees based on age. Employers should also genuinely assess whether biased assumptions based on age have any bearing upon important workforce decisions, and address these assumptions and biases objectively when they arise. Breach of anti-discrimination and general protection laws may attract orders for compensation, or, where brought under the Fair Work Act, monetary penalties, including for managers or directors knowingly concerned in any contravention.