The UK is committed to legislating against age discrimination in employment and, under the EC Directive on Equal Treatment in Employment and Occupation, is expected to have legislation in place by December 2003.
This important study looks at what can usefully be learned from other countries’ experiences and analyses the options for the UK. It identifies legislation against age discrimination in employment in 13 countries, and looks in detail at Australia, Canada and the United States where legislation has been established for some time.
The international experience points to the importance of some key choices for UK legislators:
The United Kingdom has committed itself to legislate against age discrimination in employment for the first time, by signing up to a recent European Commission Directive. A number of other countries already have such legislation. This study looked at what can be learned from those countries' experiences and analysed the options for the UK in designing age discrimination laws. The study identified legislation against age discrimination in employment in 13 countries, and looked in detail at three (Australia, Canada and the United States) where it has been established for some time. It found:
- Legislation has had a positive effect on employment rates of older workers in the United States. This is mostly due to them leaving jobs at a later age, rather than to more of them being hired.
- Employer behaviour has changed in countries with legislation, to the extent that explicit discrimination, especially in recruitment, has reduced. However, society's and employers' attitudes to older workers do not yet appear to have shifted as much as towards groups such as women and people from minority ethnic communities, where legislative protection has, generally, operated for longer.
- Forbidding employers to set mandatory retirement ages may have made them a bit less likely to hire older workers, but there is no evidence that this has been a major disincentive.
- Whether to deal with both age and other forms of discrimination in a single law and agency. To do so would show that age discrimination is viewed seriously, but age also risks taking a 'back seat' in a single agency.
- What powers to vest in the commission that will enforce the legislation: in particular, whether to give it proactive powers of investigation and regulation.
- Whether to permit employers to set mandatory retirement ages.
- What to exempt from the legislation. Human rights considerations must be balanced with economic efficiency and other objectives; but too many exemptions tend to discredit anti-discrimination laws.
Discriminating against workers on the basis of their age can be unfair to individuals and harmful to the economy. In particular, the assumption that someone is 'too old' to be sufficiently adaptable to do a job as well as a younger person wastes talent and potential in many workplaces. At a time when populations are ageing, as they presently are in most OECD countries, the economic cost of age discrimination is likely to grow.
The UK government has adopted a voluntary Code of Practice on age diversity, and is now considering how to legislate against age discrimination, following its adoption of an EC Directive requiring it to do so (Council Directive 2000/78/EC). It can look for a precedent at the experience of several countries that have already adopted such laws. Although in most countries laws have only recently been enacted, nationwide laws date back some 30 years in the United States, 20 years in Canada and 10 years in Australia. These three countries were looked at in greatest detail, although the choices taken by other countries, in most cases more recently, were also considered.
The evidence from Australia, Canada and the United States, though limited and uneven, shows that legislation has indeed made an impact on discrimination in these countries.
The most comprehensive evidence comes from the United States, where:
- Research comparing differences over time and across states with different levels of legislation shows that age discrimination laws significantly increase employment rates of older workers. This is mostly due to them staying on in jobs until later ages, rather than higher rates of hiring of older workers.
- There is some evidence that employers may be a little less likely to hire older workers because they are not allowed to set mandatory retirement ages.
- The legislation has also strengthened the relationship between employees and employers. Some US economists suggest an implicit understanding that workers in career jobs have low pay relative to productivity when younger, and are rewarded for loyalty with higher pay when older. Outlawing age discrimination prevents employers from reneging on the second half of this compact.
More generally, in Australia, Canada and the US:
- Legislation has had a marked effect on some forms of direct discrimination, for example in advertising vacancies or in the process of selection for promotion.
- However, there is no clear evidence so far of a significant shift in the attitude of employers and society to older workers. This is likely to be a long-term process. There is evidence that legislation can only help to change attitudes if it operates in conjunction with other policies to promote equal rights and educate employers and workers about their obligations and rights.
In October 2000, the European Council passed a new Directive requiring government to introduce equality in employment legislation, including on age discrimination. The UK must introduce such legislation by December 2003, or at the latest by December 2006 if it applies for an extension.
The Directive sets very broad minimum requirements, obliging countries to prohibit age discrimination with respect to the labour market, including access to training as well as to jobs. It leaves many matters of detail up to governments.
Analysis of age discrimination legislation in different countries reveals that its impact depends to a great extent on how its conditions are designed and enforced. The UK has a number of important choices to make within the broad framework of the EC Directive. Specifically, legislators must take decisions about:
While each of the above choices on its own is important, the effectiveness of the new legislation will also depend on the internal consistency of the legislation and the overall stance of Government policies to promote, monitor and enforce non-discriminatory behaviour. The overall character of legislation and its enforcement needs to make it clear that age discrimination is being taken seriously. Too many exemptions and a half-hearted approach could instead send the signal that the UK is reluctantly signing up to a measure imposed by European legislation. Overseas experience has shown that changing hearts and minds on age discrimination is far from easy, and that it is only through doing so that equal respect and treatment of people of all ages will become possible.
Zmira Hornstein, an independent consultant and former civil servant, carried out this study between April 2000 and April 2001. The study assembled existing evidence, with the assistance of experts in different countries and with reference to written documentation, rather than involving primary research. In the three main countries, detailed papers (which are chapters in the final report) were produced, by Professor Sol Encel of the University of New South Wales for Australia, by Professor Morley Gunderson of the University of Toronto in Canada and by Professor David Neumark of Michigan State University in the United States.
A key part of the project was a workshop held in London in March 2001, which brought together
an international group of people specialising in this field. The group included economists, lawyers, sociologists, and people working in research, national governments, the European Commission and stakeholder organisations. They discussed the evidence as presented in the country papers, and considered the options available to the UK and other countries in the process of forming new legislation to combat age discrimination. The conclusions of the workshop fed into the final report.