According to figures published by the Office of National Statistics, of the 29.8 million adults currently employed in the UK, 17.5 million of them are between the ages of 25-49, whilst some 8.6 million are +50 years old. With an ageing population still struggling to cope with the effects of the recession, and the Government’s abolition of the default retirement age in April 2011, the dynamics of the UK’s workforce are likely to change over the next decade as people stay in work for longer. Yet are employers ready?

Age discrimination pitfalls

Kate Bostock, Director of Product at fashion powerhouse ASOS, quit her job last month amid remarks from the company’s founder that “strategy wasn’t the issue. It was more about cultural fit and time of life”. Said founder went on to explain that “[the] average age [of our workforce] is 27 or 28”. Ms Bostock is 56.

These comments come as employment tribunals seek to clamp down on age discrimination in the workplace. High profile cases brought by Miriam O’Reilly (of Countryfile fame) against the BBC, and the ongoing dispute between John McCririck (of Channel 4 Racing), the broadcaster and IMG Media Limited, demonstrate how tribunals are grappling with this issue and holding employers to account.

Most recently, Tony Shiret (affectionately known as the “Godfather of Retail” and formerly a leading analyst at Credit Suisse) brought proceedings in the tribunal against the bank for age discrimination and unfair dismissal following termination of his employment. Mr Shiret claimed that the bank had instigated a redundancy process which was heavily weighted against him on the grounds of his age (55), rather than his experience or ability. Mr Shiret argued that the bank’s redundancy process had been fixed in favour of his younger colleagues.

Judge Brown, noted that whilst Mr Shiret’s performance “had certainly not been as stellar as it had been in previous years”, he had been treated less favourably than other employees in the redundancy selection pool when scored against the relevant selection criteria. This less favourable treatment had occurred on account of his age and the fact that one of his junior colleagues (and a star performer at the bank), Mr Malic, had threatened to resign.

Mr Malic was 35 years old, had recently moved house, had a young family and wanted to increase his earnings. Having received a job offer from a smaller bank for a higher salary than that offered by Credit Suisse, Mr Malic requested an “important chat” with senior management.

Judge Brown found that Mr Shiret had been unfairly preselected for dismissal in favour of his younger colleague so as to open up the promotions path for Mr Malic and encourage him to stay.

There are a number of lessons that can be learnt by all employers from Credit Suisse’s experience in this case.

Objective justification cases

In the recent cases of Seldon v Clarkson Wright & Jakes and Homer v Chief Constable of West Yorkshire Police, the tribunal held that an employer can objectively justify discriminating against a particular age group of employees (and have a defence to a claim of age discrimination), if it is able to prove that the discrimination complained of is a proportionate means of achieving a legitimate business aim.

In Seldon, the tribunal held that the employer firm was justified in retiring a 65 year old partner, in the interests of promoting intergenerational fairness, encouraging workforce planning, and contributing to a congenial workplace culture by limiting the expulsion of partners through performance management. Yet relying on the “objective justification” defence should be a last resort for employers.

Preventing age discrimination claims

Evaluate properly and fairly

Perhaps first and foremost, employers must not make assumptions about their employees based on their age (or, indeed, any other protected characteristic listed in the Equality Act 2010 such as race, disability etc.). If an employer does so, it will be exposing itself to the risk of such employees bringing claims against it for discrimination. Each individual has to be assessed on a case by case basis. An individual’s suitability for continued employment ought to be premised upon meritocracy and their ability to satisfy the requirements of the role for which they were employed, not the fact that they have recently celebrated their 40/50/60th birthday.

Whilst in Shiret, Judge Brown accepted that, as a younger employee, Mr Malic had greater potential, he found that Credit Suisse had failed to acknowledge the importance of Mr Shiret’s role as a mentor for junior employees.

Educate staff in equality and diversity legislation

In addition, employers need to ensure that their workforce (from caretakers to CEOs) is well versed in equality and diversity legislation. Training sessions, workshops, and presentations regarding equality and diversity issues ought to be given (and attendance at these events recorded). Policies and procedures should be updated on a regular basis and circulated (or otherwise clearly made available) to all employees. Allegations of discriminatory conduct ought to be investigated in accordance with company policy, no matter how apparently innocuous such allegations may at first seem (“office banter” included). If an individual has raised a complaint about discriminatory conduct but for whatever reason wishes to remain anonymous, employers ought to ensure that the allegations are investigated sensitively.

Consider ambition of all staff

Employers also need to recognise how best to accommodate the ambitions of all their staff, regardless of age, and implement appropriate measures which suit their business model as well as their workforce.

Measures could, for example, include offering long term incentive plans to staff, creating new opportunities for employees by way of sideways moves or internal promotions, setting out clearly defined promotion paths and workforce planning so that junior staff know by when they can realistically expect vacancies further up the professional hierarchy to arise, implementing an effective performance management process and appraisal system, rewarding good performance via bonuses or enhanced benefits in kind, increasing top performers’ salaries as a way of retaining those individuals, or publicly applauding star performers so as to encourage other employees to replicate their success.

This is by no means an exhaustive list of steps employers can take to retain the best people and companies may have to think creatively in this regard, particularly in light of the current economic climate, but they are nonetheless a good starting point. Whilst such strategies may be easier for larger companies to implement (primarily as a function of the greater resources they have available), small to medium sized employers can tailor these to suit their overall business model.

Mark Twain once said that “age is an issue of mind over matter; if you don’t mind, it doesn’t matter”. Yet people do mind and age does matter. Employment tribunals are tackling this issue head on. So, if a lesson is to be learnt from recent case law, it is this: employers should too.