Beware the pitfalls of an older workforce

Jacqueline Kendal

With the number of people working between the age of 50 and 64 soaring in recent years, Jacqueline Kendal looks at the pros and cons of an older workforce.

There are clearly advantages of having a mature workforce. People over 50 are recognised as being more likely to be loyal, help motivate other staff and mentor new recruits as well as possessing an admirable performance record.

For example, McDonalds reports 20% higher performance in outlets that employ workers over the age of 60. Some organisations also report a decrease in the short-term sickness or absence rate.

However, there are an increasing number of pitfalls that need to be avoided. If they are not they can pose a real risk to employers and their companies.

Some organisations report an increase in long-term absence rates or age-related health conditions. These need to be carefully handled as otherwise there is a risk of an age discrimination and/or disability discrimination claim.

It is now usual to avoid having a fixed retirement age and employers must ensure it is removed from the contract of employment and that staff are aware there is no fixed retirement age.

Employers need to require employees to give notice, usually the same period as if they were resigning, should they wish to retire. This will assist the employer with handovers and succession planning.

If a fixed retirement age is retained or revised upwards ensure you can justify this objectively. To do this you must identify the legitimate aim being met by having a fixed retirement age and considering whether there are other ways of meeting this aim.

Ensure your retirement policy is up to date and, if there is no fixed retirement age it should be aspirational. The focus should be on workplace discussions and facilitating employee wishes with minimal disruption to the business.

It is also essential that any share schemes and any associated documents are defined flexibly enough to provide for retirement through choice.

Appraisals and performance management may need adjustment so that it is possible to demonstrate criticism and performance management is applied consistently, regardless of age. Dealing with any performance problems as they arise will protect the organisation from allegations that older workers are being singled out.

It is important to build discussions about future aspirations and plans into the appraisal process so that such discussions are not focused on people in a certain age group.

Employers need to bear in mind it is not lawful to refuse to recruit someone because they are within six months of 65 or the normal retirement age (if higher).

It is acceptable to withdraw or withhold certain benefits to employees aged 65 or over, such as life assurance, PHI or medical insurance. However, there may be benefits that must be available to such an employee, for example, an employee over 65 may still qualify for opting into an auto-enrolment pension scheme.

Older employees can certainly be an asset to businesses but employers need to look hard at the risks and make an informed judgement. Failure to do so could be costly.

Jacqueline Kendal is head of employment law at Rosling King LLP