Third Age Employment Network - Archived News December 2004

Taen were invited on to the Moneybox programme recently to give our views on the Government's recently announced plans to introduce a national default retirement age of 65 in the 2006 age discrimination regulations

Despite the recent flattening off in business confidence and a small fall in the number of vacancies, many employers are still expecting to recruit more staff in the New Year.

According to the Manpower Employment Outlook Survey, of the 2100 UK employers it surveyed, 20% expect an increase in hiring in the first quarter next year.

Employers in eight of the nine sectors surveyed have positive hiring intentions for the next 3 months. The most optimistic are employers in the Finance and Business Services and Transport & Communications sector. The only sector reporting gloomy job prospects is Agriculture.

The picture in the regions is also positive with employers in 11 of the 12 regions anticipating taking on staff in the first 3 months of 2005.

Meanwhile the NHS has decided to specifically target the over 50s and those who may be considering changing their career later in life. NHS Careers has opened a new recruitment website for older jobseekers - ‘Experience Matters’.

The Health Secretary John Reid said, “There’s never been a better time to work in the NHS. The NHS can offer great careers both for young people and those with more experience of life, with jobs that fit around people’s lives and provide fantastic development potential and opportunity, regardless of age.

The new website will provide extremely useful information to a group of people who are vital to the NHS. The NHS values older people, whose skills, talent and life experience could make a real difference.”

First there was the debacle surrounding the Individual Learning Accounts scheme, then earlier this year the plug was pulled on the e-University after hardly any students enrolled, now the Government is also going to close the NHS University (NHSU).

The university was set up just over a year ago to teach people working in the healthcare sector, as well as those entering it for the first time or those returning to work in it after a career break.

Allegedly something close to £50 million has been spent on the NHSU to date. Now it will be replaced by a new Institute for Learning, Skills and Innovation which will employ 300 people rather than the 1500 currently employed by the NHS University.

John Reid, the Health Secretary, also announced the NHS Modernisation Agency will be dissolved in July next year.

Bob Fryer, the Chief Executive of NHSU, will be moved to a new role as National Director For Widening Participation in Learning for the NHS.

We will have to wait and see whether, as in the case of the failed E-University, the Directors and senior managers of the NHSU received performance bonuses despite its failure.

Despite such high profile (and costly) failures as the those detailed above, some of the Government’s learning programmes do seem to be succeeding. One such is Basic Skills training.

The National Audit Office (NAO) has confirmed that the Public Service Agreement target to increase the literacy, numeracy and language skills of 750,000 adults by end of 2004 have been met.

“Since 2001, 2.4 million adults across England have taken up a massive 4.8 million courses in literacy, language and numeracy skills. Over 750,000 of these learners have gone on to achieve nationally recognised qualifications – a commitment we set out in our Skills for Life Strategy. We are now concentrating on raising the status and quality of literacy and numeracy tuition and recruiting a professionally qualified workforce….

“Hitting this target is only the start. Everyone needs a skill, and the country needs skills to survive in an increasingly competitive, global marketplace. The individuals who have acquired their new skills should be rightly proud of their achievements as literacy, language and numeracy will allow them to make the most of life and work opportunities.”

“This is a significant milestone – not only have we met our target on time, but with over two million people taking courses to improve their skills, the benefit to both individuals and society as a whole is significant. The report shows that progress to promote initiatives and engage employers may be slow as low skilled employees are naturally the hardest to reach and small businesses often need much convincing of the benefits of raising skills.

“There are still too many people who are being held back in their everyday lives because of their poor literacy, language or numeracy skills. This is why we have now increased our aspirations to help two and a quarter million adults improve their skills by 2010.

“The message to adults across the country is that there has never been a better time to gain a qualification, with thousands of free courses available across the country. All you need to do is call 0800 100 900 to find out about how you can get rid of your gremlins and ‘get on’ in life and work.”

The Get On Campaign, launched in 2001, encourages adults to return to learning to improve their literacy, language and numeracy skills.

The European Commission has announced it is referring 5 Member States to the European Court of Justice for failing to transpose the Employment Equality Directive. The Directive, which prohibits discrimination on grounds of age, disability, religion and sexual orientation in employment and vocational training should have been incorporated into the national law of Member States by December last year.

The 5 countries concerned are Austria, Finland, Germany, Greece and Luxembourg. Vladimir Spidia, the EU Commissioner for Employment, Social Affairs and Equal Opportunities, expressing his disappointment said, “But I am encouraged that many Member States, in particular the majority of the new ones, have made real efforts to put anti-discrimination legislation in place on time.”

Only France, Italy, Spain and Sweden had fully transposed the Directive into their national legislation by the December 2003 dead-line. The UK had transposed the regulations applying to sexual orientation and religion & belief in time, but had applied for – and been granted – a 3 year delay for those applying to age discrimination.

The next step for the European Commission will be to examine whether the Directives have been properly implemented by Member States.

The timetable for the 2006 age regulations has slipped further. The draft regulations and the accompanying consultation period are now expected next summer – at least a year later than originally intended. However they will still come into effect on the 1st October 2006 according to Patricia Hewitt – Secretary of State at the Department of Trade and Industry.

The Government has always promised it will give employers (and others) time enough to prepare for the age regulations. The original plan was to have 2 years after the regulations were approved by Parliament to do so. This meant Parliamentary approval would have been needed by October this year.

This requirement to give employers enough preparation time was one of the main justifications the Government gave for requesting (and receiving) a 3 year delay from the EU on the implementation date for the regulations. The original date should have been December 2003. The new timetable means employers will be lucky to have even 1 year between the approval of the regulations and when they come into effect.

Many employers have been delaying their preparations until the final, approved regulations are available – a strategy encouraged by the Government. Now they are going to be pressed to be ready in time.

TAEN has always argued that the Government was taking too leisurely an approach to bringing in the regulations. Most organisations’ and managers’ priorities are set on a ‘needs must’ basis so that given 2 years to prepare for something, most will leave it to the last few months, the last minute – or even later.

On that basis, a further erosion in the timetable won’t have a significant impact as the Government obviously built in enough ‘slippage’ room to the process. But for those employers, other organisations and individuals that did want and need the time to prepare properly, this delay is bad news.

One of the consequences of the Government’s decision to opt for a national default retirement age of 65 is that hopes of extending employment rights to people working on past state pension age have been dashed.

At present these older workers do not have rights covering unfair dismissal on the grounds of age or the right to statutory redundancy pay, if they are made redundant. The retirement age decision means they will not acquire them via the 2006 age discrimination regulations.

Age campaigning groups have vowed to test the legality of the default retirement age.

However, in the meantime the Rutherford case is being taken to the House of Lords in January for a decision. Earlier this year the DTI managed to successfully appeal an employment tribunal’s original decision granting these rights.

A new survey from the law firm Eversheds shows many businesses don’t believe discrimination laws are worth the paper they’re written on.

Eversheds questioned over 2,000 people, including senior management and HR professionals, to monitor awareness and opinions of current and future discrimination legislation. Over half of all respondents (54%) felt that the current laws in place fail to stop discriminatory behaviour in the workplace with 65% of those in senior management and 36% of HR professionals sceptical as to whether the legislation really works.

The survey also uncovered significant confusion among some senior managers and HR professionals as to what is covered by discrimination legislation and what is not.

While most knew that race (94%), disability (93%) and gender (92%) discrimination were covered by law, a significant percentage was not aware that there was legislation in place to protect against sexual orientation and religious discrimination.

One in five senior managers (19%) were unaware there were laws protecting against discrimination on the grounds of sexual orientation and nearly one in four (25%) didn’t know about religious discrimination.

Worryingly, a large percentage of senior managers thought there were laws to protect against discrimination on the grounds of weight (19%) and appearance (14%), when there are no such laws in place.

HR managers fared slightly better on sexual orientation (93%) and religion (94%) but a few still thought there were laws on weight and appearance (5% each).

The number of women having children in their 30s and 40s continues to rise whilst the number doing so in their twenties or younger has decreased.

New statistics on births and deaths from the Office of National Statistics show that the average for women at first birth in the England & Wales has reached 27.4 years.

It also shows that if the patterns of fertility in 2003 were to remain unchanged, then an average of 1.73 children would be born per woman – an increase of just under 5% from the average of 1.65 children in 2002. The reason for the increase is unclear, perhaps a few power black-outs this winter would give the figures a further boost…

The latest employment statistics show there are more people in work, fewer people unemployed or claiming Jobseekers Allowance but more people economically inactive.

The number in work rose by 55,000 over the past 3 months to 28.44 million and is up by 217,000 over the same period last year.
The claimant count was down by 3,400 in November at 833,000 and the unemployment rate was 4.7% at 1.39 million, down by 86,000 versus November last year.
There were 7.9 million people of working age economically inactive up by 5,000 on the previous 3 months and 78,000 on the year.

Interestingly the number of people in full-time jobs increased by 92,000 to 21.11 million over the past 3 months, while the number in part-time jobs fell by 37,000 to 7.33 million.

So after months of delay we know. The Government has bowed to pressure from the CBI and other business organisations and decided to set a mandatory retirement age of 65 in the 2006 age legislation.

Employees will have the new ‘right’ to request to work beyond the age of 65. Their employers will have to consider such requests seriously but will be under no real pressure to agree to them. And in a failed ‘sop’ to age campaigning organisations such as TAEN, the Government has promised to review the question of retirement ages in 2011 – 5 years after the age legislation comes into effect - but has not committed in advance to abolish them at that point.

The Employers Forum on Age, whose members employ around 14% of the UK’s workforce, described the announcement as a “fudge” and “the Government failing to make a decision.” They added that “the extension of the right to request to stay on post-retirement merely formalises what is already occurring….Simply postponing the decision leaves everyone in the dark. After 5 years of debate we are no further forward and the same arguments will be made in 5 years time”

The Chartered Institute of Personnel and Development (CIPD) said, “By ducking the issue, the government risks giving employers an excuse to delay action they need to start taking now if they are to attract and retain talent in a tight labour market. Age discrimination exacerbates skills shortages that risk undermining the UK economy.”

Patricia Hewitt, Secretary of State at the DTI, partially justified the Government’s decision by explaining, “We have listened to strong representations arguing that many companies still rely on a default (mandatory) age for business planning purposes.” Employers had also claimed that mandatory retirement ages allow them to exit poorly performing older workers with dignity.

But the CIPD said, “There are still employers out there who use mandatory retirement ages as a cover for poor management. Effective management of people ensures that people who perform well are retained and people who do not are managed or removed. Mandatory retirement ages are a poor substitute for performance management.”

The Government’s decision runs directly counter to the spirit and intent of EU’s Equal Treatment Directive which is being introduced into the UK via the 2006 age legislation and which seeks to end the use of age as a proxy for ability and contribution in employment decisions. It flies in the face of the demographic trends, the pensions crisis and the Government’s own ‘extending working lives’ exhortations.

Perhaps we shouldn’t be surprised at these contradictions as the Government has always talked a better game than its played.

Raising retirement age from 60 to 65 and moving to a ‘career average’ pension scheme are the main reforms the Government is proposing to the pension arrangements covering 550,000 civil servants. The proposals also make flexible retirement easier – giving civil servants the opportunity of cutting down to two or three days working a week towards the end of their careers.

There was unanimous opposition from Civil Service unions towards the proposal to raise the retirement age. However the idea of moving away from a ‘final salary’ towards a ‘career average’ calculation for their pensions was given a cautious welcome by at least one union, Prospect, who described it as being superior to the present arrangements. It would favour the low paid, early leavers, late joiners and women who take career breaks. Those who would lose out most are higher ranking, senior civil servants.

The proposals are out for consultation with all public sector staff until March and would be introduced for new civil servants from 2006 and to the remainder by 2013. Transitional arrangements will be introduced to protect older workers. Unions are afraid that other public sector employers will follow the Government’s lead.

It is estimated that earlier this year there were still over a ¼ million (272,000) jobs paying less than the national minimum wage. This equated to just over 1% of all jobs in the UK.

According to the Annual Survey of Hours and Earnings recently published by the Office of National Statistics, people in part-time work were over 3 times as likely as people in full-time work to be paid less than the minimum wage.

Unfortunately the datasets used for the survey do not break the information down by age cohorts but a report earlier in the year revealed over 25% of working women aged 55+ earn less than £5 an hour.

Nearly 2/3rds of businesses oppose any extension to the legislation which gives employees the right to request flexible working. In fact the survey of 1200 (mostly small) businesses by the British Chambers of Commerce (BCC) found even higher opposition amongst firms employing fewer than 50 people – with nearly 3/4s (72%) against any such move.

The Government has decided to outlaw compulsory retirement ages in the 2006 age legislation. According to informed press comment, Alan Johnson, Secretary of State at the DWP has finally persuaded Patricia Hewitt , his opposite number at the DTI, that if it is wrong to sack someone on the grounds of their gender, race, disability, sexual orientation or religion or belief, then it is wrong to pension them off because of their age.

The decision is likely to bring a furious response from business leaders. They had campaigned fiercely for the establishment of a national retirement age of 65, with flexibility for individuals and employers to agree earlier or later departure.

News of the Government’s alleged decision is based on a leaked letter circulated to cabinet ministers in mid November. An announcement is expected before Parliament rises for the Christmas recess.

If the story is correct then TAEN’s campaign to outlaw compulsory (mandatory) retirement ages will have been successful. However, we’ll hold the celebrations until the decision is confirmed – and we’ve read the small print…..

In his Pre Budget Statement last week, Gordon Brown stressed the overall importance of improving skills within UK plc. Improved skills will not only help UK companies compete more effectively, they will also improve individuals’ employment prospects and overall employability he said.

The Chancellor confirmed there will be a national roll-out of the Employer Training Pilots (ETPs) scheme. Up till now only a third of the country was covered by the scheme which reimburses employers for most, if not all, of the costs of providing training for staff in basic skills and up to NVQ level 2.

Being ‘pilot’ programmes, a number of variants operated in the various schemes around the country. One of the most contentious of the variants was the ‘wage compensation’ allowance paid to employers in some of the areas to encourage them to release their staff for training. There is a strong debate going on as to how effective (and necessary) it was in getting employers signed up and their ongoing support of it. At the moment the Government still hasn’t decided whether wage compensation will be a standard feature of the national scheme.

The ETPs appear to have been very successful in getting employees with low, or no, qualifications and who have not normally been offered or involved in qualifications-based training to take it up. For instance, almost 80% of ETP learners are aged over 25, over half are female and 11% are from ethnic minority backgrounds.

Nearly 9 out of 10 (88%) of the employers who have become involved in the ETPs are from the private sector.

The new national programme (when it comes) will be called the National Employer Training Programme.

From TAEN’s point of view the problem with the Government’s plan is that the current ETPs are due to end in August 2005 and the national roll-out is not expected to start till a year after that - and not be completed till 2007/08. What happens to all the momentum and enthusiasm, provision, networks and support structures that have been built up in the pilot areas in the time between ?