What is Age Discrimination in the workplace?
Age discrimination, or ageism, is the most widespread form of discrimination. The research organisation Age Without Limits says that a third of people hold ageist beliefs. Their report shows that two thirds of people feel they have been treated differently because of their age since turning 50, which, in a workplace, could be classed as discrimination. Age discrimination complaints need to be taken very seriously by businesses because of their propensity to develop into very complex and very expensive insurance claims.
It’s important to note: Not all treatment of people specific to certain age groups is discrimination. It’s crucial business leaders understand what defines age discrimination, and identify what measures can be taken to reduce the likelihood of a claim.
Age discrimination includes both indirect and direct discrimination, as well as unwanted behaviour known as harassment, and victimisation where someone is treated negatively because of a complaint. Direct or indirect discrimination can happen in any area of work. It infects everything, from decisions made, to behaviour, to language used. Age discrimination can be present within a whole host of company activity, from job adverts to recruitment to employment terms to training to promotions.
The Equality Act 2010 and Age Discrimination
Age is a protected characteristic under The Equality Act 2010. Alongside race, sex, disability and religion – age must be considered when promoting equality. The Equality Act aims to create a more equal society and places of work, helping rather than hindering employers when making decisions and acting justly.
It should be noted, there is an exception written into the Equality Act which specifically relates to age. It states that an employer can justify a decision made if it is proportionate and situational. This however is on an individual basis, not company-wide, and employers cannot force employees to retire.
The impact of Age discrimination upon employers’ liability insurance
Concerning risk management and insurance claims, companies with an older workforce are at greater risk of employer liability claims. Older workforces are more likely to require increased attention and diverse levels of duty of care – risk assessments will need to be broader in scope to account for more complex vulnerabilities.
At Romero Insurance, we have noticed a trend in the market involving age discrimination compensation. The average award for age discrimination claims has seen a prominent increase, soaring to over £100,000 – for comparison in 2020 the average figure was £9,000. This increase has been accredited to multiple factors, including an ageing workforce, a tighter focus on employment cases related to age, and the rapid technological advancement of the workplace.
Because of the increased compensation cost of age discrimination claims, businesses need to be even more astute at tackling age discrimination in the workplace. Complaints need to be addressed promptly, experienced investigators need to be appointed, and equality training should be mandated to help stamp out ageism.
How to properly handle an age discrimination complaint and claim
Even with extensive risk management and effective procedures in place, claims can be filed against your leadership team on the grounds of discrimination. This is why it’s important businesses have effective employers’ liability insurance, and access to the services of a dedicated broker. Employers’ liability claims are extensive, lengthy and potentially expensive; as an experienced & dedicated broker, Romero Insurance will take you by the hand and guide you successfully through the claims process.
At Romero Insurance, we provide businesses with the tools they need to properly handle an age discrimination complaint. This may involve access to training, a round-the-clock phone line for emergency guidance, or templates for emails or letters. Our partner, Sentient, the HR and Health & Safety outsourcing service boast a qualified team of professionals ready to talk to you. They are employment law specialists who have gone through this process multiple times with many other businesses.
In these complex situations, it pays to be experienced. At Romero Insurance, we understand the value of a strong employers’ liability cover, and our in-house claims team are experts at managing these types of scenarios.
For a non-invasive confidential review of your business insurance, contact us. With your permission, we will be able to perform a review of your insurance terms and provide a better offer than your current provider.
Examples of Ageism insurance claims
Martin Scott v Walker Morris LLP
Background
Martin Scott, an equity partner at Walker Morris LLP, was forced to retire at the age of 63. He had previously extended his retirement age from 60 to 63 but was denied a further extension. Walker Morris LLP had a policy requiring partners over 60 to reapply for extensions to stay on. This policy was intended to promote “intergenerational fairness” and provide progression opportunities for younger partners.
Tribunal Findings
The Employment Tribunal found that the firm’s policy was not a proportionate means of achieving a legitimate aim. The tribunal noted that there was no evidence that the firm needed to free up equity for younger partners or that partner performance declined with age. The tribunal ruled that Scott was subjected to less favourable treatment because of his age. The refusal to grant his extension was deemed unlawful age discrimination.
While the tribunal acknowledged the firm’s aims of workforce planning and maintaining a cohesive environment, it concluded that these aims did not justify the discriminatory policy.
Compensation
The compensation award has not yet been finalised, however given the average cost of such a case it is expected to be substantial.
Mr G Cowie v Vesuvius plc & others
Background
Mr. Glenn Cowie, a 58 year old senior executive at Vesuvius plc employed for around 40 years, was dismissed after nearly four decades with the company. He was derogatorily referred to as an “old fossil” and told he was incapable of managing ‘millennials’.
Mr. Cowie brought claims of age discrimination, unfair dismissal, and victimization under the Equality Act 2010 and the Employment Rights Act 1996.
Tribunal Findings
The tribunal found in favour of Mr. Cowie, ruling that he had been unfairly dismissed and subjected to age discrimination. The tribunal noted that the derogatory comments and the dismissal were linked to his age.
Compensation
Mr. Cowie was awarded a substantial compensation package, including over £20,000 in interest for injury to feelings, a basic award for unfair dismissal, and a compensatory award for loss of earnings. The total compensation amounted to £3.2 million, one of the largest awards ever given by an employment tribunal.
The majority of the compensation was due to the financial losses at play. Mr Cowie’s salary was £350,000 with add-ons. He was also part of a long term incentive plan which could have paid out significant sums were he not dismissed.
Here are some key steps employers can take to manage Age Discrimination:
1. Succession planning
Succession and promotions need to be clear and fair. Review your policies for any discriminatory bias, ensuring all employees are offered a fair opportunity. Promotions and recruitment need to be assessed to be equal, and not involve any protected characteristics such as race, gender, religion, or age.
2. Training
Managers and staff need to have undertaken equality and discrimination training. They should be able to recognise bias and help to prevent discrimination from taking place in the workplace. Managers should know the procedure when faced with complaints, and identify vulnerable colleagues.
3. Suitable working arrangements
Businesses should consider how they can provide workable solutions for their employees. One age group should not be prioritised; equitable solutions need to be offered.
4. Implement Mentoring
Businesses could promote mentoring, allowing different generations to mingle through the structure of mentorships or shadowing. This practice would help with colleague cohesion and encourage knowledge-sharing.
5. Take a stand
Companies could publish their policies online and publish material related to discrimination. Bulletin boards around the work premises, or in the company newsletters; get the message across by putting it directly in front of the eyes of staff. Emphasise your company’s no-tolerance attitude to discrimination.
By taking proactive steps, businesses can reduce the likelihood of a complaint or claim. No company wants the headache of a protracted legal dispute, and age discrimination cases are particularly messy and especially expensive, costing thousands even in the case of a successful defence.
If you are dealing with any kind of employment issue or official complaint by an employee, then it is very important to notify insurers before it progresses to a formal claim. This will ensure you have the fullest support system around your HR team, and don’t exacerbate the situation further.
If you have any questions about your insurance policy, please contact Romero Insurance. Our insurance law experts are on hand to assist with reviewing the scope of your coverage.
If you have any questions about HR support, training and template documents; please contact us to discuss Sentient. Their employment law experts and HR outsourcing services are available for instant guidance.
