Britain - "Age discrimination" legislation - age-old attacks on working conditions

Nov/Dec 2006

On 1st October, legislation against age discrimination at work finally came into effect, after many delays, supposedly to implement a European directive. It was heralded by the government as introducing "important new rights and opportunities" for workers.

Despite this rosy picture, however, this is very far from proposing anything to make life easier for older workers. Of course, age discrimination exists. If only because of the on-going intensification of work and longer hours make it harder for older workers to do their jobs. But this is not what this legislation is about.

Its primary objective is to ensure that workers carry on working longer than they do today. As if the reason why so many workers find themselves out of their past regular jobs before retirement age, had anything to do with "discrimination"! Mostly, it is due to being pushed out by their employers under all kinds of schemes designed to cut the wage bill. The majority of these workers are not replaced. But when they are, it is by resorting to casual labour or outsourcing - in other words, by getting the work done by workers who are not necessarily younger, but certainly on lower wages. But of course, Labour has no intention of stopping the bosses from cutting jobs as they please and the employers' permanent job-slashing is not even mentioned in this legislation.

Nor is there any mention of the worst discrimination of all - the scandal of the abysmal level of pensions. If many workers choose early retirement or voluntary redundancy, when it is offered, it is often because of bad health resulting from deteriorating working conditions - but certainly not because they can actually afford to stop working, even if they get their pensions immediately. Many have to find another job to get by. In fact, it is not just workers under 65 who cannot afford to retire, much as they might like to. More and more over-65s are forced to work in whatever jobs they can find, simply because they just cannot survive on their miserly pensions - the number of over-65s in the workforce has increased by 100,000 in the past year alone. A pension system which leaves workers in dire poverty is certainly discriminatory. However, the new legislation contains nothing which might end this scandal.

As to the bosses, they certainly have nothing to fear from it. In fact, the government is at pains to convince them that the new regulations will actually benefit them. Business, it says, cannot afford to throw older workers on the scrap heap, thereby losing valuable experience and skills; the economy would benefit from older people contributing to a growing workforce and one which is more adapted to employers' needs, so ending age discrimination is good for individuals, business and society!

According to Labour's "classless" demagogy, "fairness and productivity go hand in hand". The point, however, is that bosses' profits and workers' interests do not! And once again, under the hypocritical pretext of granting workers "new rights", this government is offering the bosses new ways of undermining workers' conditions.

A law the bosses can stretch as far as they want

By the government's own admission, the last thing they intended was to force companies to treat older workers better.

So, the Department of Trade and Industry (DTI) carried out a lengthy consultation exercise, which was mainly aimed at finding out which age-based practices were used by employers, and whether they wanted to keep them! As a result, the legislation has been made extremely elastic, as far as employers are concerned. Very little is definitely ruled out for them. Even in clear cases of direct discrimination, where the employer sets an age qualification for recruitment, benefits, and so on, they are invited to "objectively justify" the practices they wish to retain and they will be able to retain them - unless, as a result of a legal challenge, the courts decide otherwise. But this still leaves the burden of fighting these discriminatory practices entirely on workers' shoulders!

The legislation itself demonstrates just how easily it can be stretched, by resorting to a sleight of hand with statutory redundancy pay. As it stands, this is linked to age. Workers aged 18-21 are entitled to half-a-week's pay per year of service, 22-40 year olds to 1 week and the over-40s to 1.5 weeks. For everyone, the weekly pay used is subject to a £280 maximum and length of service is limited to a 20-year maximum. Clearly, this is discriminatory. Given that redundancy pay works out at best to a miserly £8,400, raising everyone's entitlement to match that of the over-40s would have cost the bosses very little. Instead, apparently the government went as far as toying with the idea of bringing the entitlement of the over-40s down to the lowest level! Eventually, they rejected this idea, probably for fear of a legal challenge.

So, to ensure that employers will not have to fork out a penny more for their job-cutting, the age bands will be kept, together with the existing maximums. Only one thing has been changed: the upper age limit for entitlement to redundancy pay - which was 65 - has been scrapped. But that presumably need not cost employers anything, since they can forcibly retire anyone over 65, without having to make them redundant.

When it comes to selection for redundancy, though, the government is firm. Redundancy on a "last in, first out" basis was, so far, in many workplaces, the only protection for workers - albeit an imperfect one - against arbitrary redundancies. But no longer. Under Labour's new regulations, this protection will definitely be illegal. Not that the government intends to place any restriction on the bosses' right to throw out workers, old or young, on whatever basis - it has no plans to enforce the right of workers to make a living. However, under the cover of fighting age discrimination, they are giving employers the freedom to choose whom they want to sack!

Extendable retirement age

Some companies, like Sainsbury's, Asda and B&Q, have already done away with a mandatory retirement age. 1% of Sainsbury's workforce is now over 65 and Sainsbury's workers can contribute to their pensions until they are 75 (it is not hard to imagine why many workers would have to take this option, given the abysmally low level of wages in retail).

Labour holds these companies up as models and ideally, they would have liked to generalise this practice by having no default retirement age at all. The second best option for them would have been to have a default retirement age of 70. But they came up against objections from employers. It seems most employers are more concerned with being able to get rid of older workers with impunity, once they are worn out.

So, for the first time, the legislation set a National Retirement Age (NRA) of 65 - which is the age at which any employer can force a worker to retire (unless employers have their own contractual retirement age, which is also allowed under the new regulations).

However, no-one knows what will happen to this NRA when the State Pension Age is increased, as is already planned. Will we see workers being forced into retirement before they are entitled to their state pension?

The DTI makes a song and dance about the "privilege" workers are granted under the new law, of having the right to ask their employer to keep them on longer, once they've been notified of their retirement. However, the bosses are under no obligation to grant such a request - in fact, they do not even have to give a reason for refusing it. Not only that, but there is nothing that prevents them, if they agree to keep someone on, from doing it on worse terms - in the same way as it is not uncommon already to see workers being made redundant, only to return immediately to their old jobs, but as temps and on lower rates. The difference is that, thanks to this new legislation, the bosses will not even have to pay a temps agency!

Another supposed "gain" for workers is that the new legislation removes the upper age limit for claiming unfair dismissal - which was 65 up to now. However, this is pure hypocrisy: why would an employer open himself to such a claim, if he can simply force workers into retirement at 65, as the legislation allows him? Similarly, although the upper limit of 65 for entitlement to Statutory Sick Pay has also been removed, employers are still able to get rid of workers of any age for taking "too much" sick leave. And since workers over 65 are more likely to have health problems, they are also more likely to find themselves out of a job before long. If this is not discriminatory, what is?

Shrinking pensions

The recent government-commissioned Turner report on pensions, with its recommendation to increase the State Pension Age for everyone, was already based, among other things, on the pretext that keeping more workers in work was a way to reduce age discrimination. Naturally, Labour took up this recommendation and is planning to raise it to 67 by 2044 (despite the fact that Alan Johnson, the then Work and Pensions Secretary, stated in 2004 that "this Government will not raise the state pension age").

But the fact that the state pension is woefully inadequate is seemingly not considered as discrimination against the elderly. 20% of pensioners - 2.2 million - currently live in poverty, despite "extras" like Pension Credits and winter fuel payments. The effectiveness - or lack of it - of the latter can be judged by the fact that an estimated 23,000 over-65s died as a result of the cold last winter! The state pension has increased by only about 9% over the last 5 years and although the Labour government may at last have promised to restore the link between the state pension and earnings, abolished in 1980 by Thatcher, this will not happen until 2012, at the earliest. By that time, the basic state pension will have fallen even further, relative to average earnings. But even this re-linking of the state pension is not definite - Labour has qualified this "promise" by saying it will be "subject to affordability and the government's fiscal position".

Given the meanness of the state pension, workers' occupational pensions are vital to survive in retirement. Many workers now face reduced occupational pensions because of employers' attacks on their pension schemes over the past period. Many final salary schemes have been either completely closed down (and their members transferred to more expensive money purchase schemes), or frozen, meaning that the benefits they will pay to all non-retired members will be lower by the time they retire.

As they stand, occupational schemes often include age-related rules which are unfavourable to workers. But many of these rules are already explicitly exempted from the new regulations. These include minimum and maximum ages for pension scheme membership as well as setting a maximum number of years for pensionable service. Employers will be able to keep other age-related rules, too, as long as they can "objectively justify" them in terms of business need. In other words, the ways employers have been limiting the cost of their pension schemes at the expense of pensioners will remain.

However, the new regulations open the way for the bosses to reduce the benefits offered by existing schemes under the pretext of age discrimination. Already, the government (and the Scottish Executive) used this pretext when trying to remove the so-called "Rule of 85" from local government pension schemes - this is the rule which allows employees to retire from age 60, on full pension, if their age and their length of service add up to 85 or more. This, together with the new legislation, gives the green light to employers who might wish to challenge other age-related provisions in their pension schemes. Lloyds TSB has already done just that, removing from the rules of their scheme the entitlement to a full pension for anyone made redundant over the age of 50.

Of course, MPs do not have the same worries about their inflation-proof, final salary pension scheme. They can expect a pension of around £12,000/year if they spend only 8 years in the House and nearly £40,000 if they hold on for 26 years. It remains to be seen whether the lavish pensions package enjoyed by the Cabinet, which allows ex-ministers to retire at 60 on at least £50,000 pa, will be considered discriminatory...

No respect for seniority nor for the youth

Despite all the reassurance from the government, there was an element of panic among firms at the unknown opportunities the new legislation might open up for litigation against them. An insurance broker in Bournemouth even banned the sending of collective birthday cards between employees, apparently afraid of being taken to court for any "ageist" comments they might contain!

However, employers have been quick to seize the opportunities offered to them by the new law - and the scope for them to abolish any benefit, if it is based on length of service, is clear.

It appears that Royal Mail, for example, may try to use it to end the traditional practice of workers being able to choose duties on the basis of seniority. However, the existing arrangements would still remain perfectly justifiable under the new regulations. Nevertheless, some RM managers seem to want to use the opportunity to put job allocation under their exclusive control, arguing that going by seniority constitutes indirect age discrimination, even if the law does not say this. Of course, if the jobs were not so hard and the shifts not so long, allocating them would not be an issue in the first place. But things being what they are, the system of seniority is considered less unfair by RM workers, whatever its flaws - and certainly fairer than what would happen if managers got away with allocating jobs according to their whims.

This is all the more hypocritical as while Royal Mail tries to use alleged "age discrimination" against seniority, they still refuse to provide sick pay to those with less than 12 months' service - which is discriminatory, to say the least!

Of course, age discrimination affects most younger workers as well, and not just new Royal Mail recruits. And the government is directly guilty of this, by setting an age-related minimum wage. That young workers should be expected to make a living on £3.35/hr, just because they are under 18, or on £4.45/hr if they are under 22, is a scandal - all the more so as no-one can make a decent living even on the adult minimum wage of £5.35/hr. If fighting age discrimination has any meaning, it should involve ending these differentials and setting the minimum wage to the same (decent) level for all workers.

But the government has made it an exception under its legislation. It is surely no comfort to young workers, in and out of casual jobs on lousy wages, to hear the government's cynical justification that, far from being discrimination against young workers, allowing employers to pay them less is actually to their advantage - because, says Labour, it makes them more "employable" despite being in competition with more experienced older workers! As if this government, which has done nothing to provide decent facilities for young workers to acquire real skills, gave a damn about them! But what it certainly does give a damn about, is to keep providing the bosses with a young workforce which is 20 or 40% cheaper!

Sure, the lower age limit for claiming unfair dismissal, which was 18 up to now, has been scrapped. But what good is that when teenagers, new to a job, are so commonly employed on a temporary basis, precisely so that they can be fired at will?

Organised discrimination against workers

The age discrimination legislation is the latest addition to what one government spokesman called a "fantastic framework of rights for workers". According to the government, these include regulations against discrimination on grounds of religion and gender, as well as the introduction of the minimum wage, various "family-friendly" initiatives and the implementation of the Working Time Directive. But, at best, these measures have made only a marginal difference. At worst, they have handed employers new tools for attacking workers.

Past anti-discrimination legislation has proved to be a double-edged sword for workers. It provided workers a basis on which to challenge the most blatant cases of unfair treatment by their employers - but only by lengthy and expensive recourse to the courts. And while a few very large compensation payments to high-flying women in the City have made the headlines, most workers who take their employers to tribunal for discrimination get much smaller payouts. If they win their cases at all, that is.

However, the same legislation was used repeatedly against workers. Probably the most spectacular case occurred when sex discrimination legislation was used to challenge the fact that men had to wait until 65 to draw their state pensions, while women were entitled to them at 60, Major's government did not lower the state pension age for men - instead it was decided to phase in an increase to 65 for women, which will be completed by 2020!

The harassment part of anti-discrimination legislation has also become an instrument in the hands of the bosses for sacking workers (how long before someone is sacked for making a joke construed as ageist?) when they do not use it to divide the ranks of workers by pushing workers to bring harassment cases against their workmates.

The same can be said of all the so-called "new rights" brought in by Labour with so much fanfare.

The minimum wage, which was supposed to become "a symbol of decency and fairness and the values that bind our country together", according to Blair, is a symbol of poverty pay. While it may have raised the wages of some exceptionally low-paid workers initially, it has now become a benchmark used by the bosses to keep wages as low as they can. Paying such low wages has become the norm in a large part of the economy, rather than the exception. As it turned out, the minimum wage was primarily a mechanism to keep wages to a minimum!

Likewise for the Working Time Regulations, which were supposed to limit working hours, for the first time. However, not only were there "opt-outs" allowing people to work more than 48hrs/week on a regular basis, but the "normal" 48-hour maximum was made meaningless by the fact that it was meant to be an average - resulting in many companies introducing annualised hours. As a result, the bosses have been able to play havoc with workers' lives by increasing or decreasing working hours according to their whims. This does not stop the government from claiming hypocritically that this gives workers more flexibility to manage their lives by allowing them to ask (only to ask!) for flexible hours to suit them. But try to make such a request when working on trains, an assembly line or in a mail sorting office!

Real rights can only be won through the class struggle

That these new "rights" should turn out to be primarily "rights for the bosses", cannot come as a surprise. What else can be expected from a Labour government which has shown so consistently that its primary concern is the interests of big business and its booming profits?

But real gains for the working class have never come from the "generosity" of the ruling class and its trustees in government. Winning them has always been the result of the working class' tipping the balance of forces in society, through their fights. Whether legislation followed or not, it has always been this relationship of forces which has forced the bosses into toeing the line set by workers.

It was the great working class mobilisations, first of the Chartist movement and then of the last decade of the 19th century, from the 1889 dockers' strike onwards, which compelled the bosses to reduce the length of the working day. Legislation only played a secondary role in this - as an admission of the power of the working class.

Conversely, it is the retreat of the working class over the past two decades, due partly to the pressure of unemployment and casualisation on workers, and partly to the bankruptcy of trade-union machineries bent on seeking partnership with the bosses, which allows Blair and his accomplices in the Labour leadership to get away with smuggling in yet more attacks against workers' conditions by portraying them as benign "new rights".

Oh yes, discrimination should be confronted in society. But no amount of legislation will do this under the present system of exploitation. For instance, how can a society in which the social contribution of the majority of people - the working class - is measured in terms of their labour productivity (or, to put it more crudely, their ability to produce profits for the ruling class) not be plagued by age discrimination? Ending age discrimination, and in fact all discrimination, is not a question of legislation, but a question of social organisation.

In the meantime, as long as capital rules society, fighting discrimination on a day-to-day basis can only be the task and responsibility of a living working class movement. And this will only happen through a revival of this movement through the class struggle, in which the working class will take it upon itself to fight the fundamental social discrimination on which this society is based - capitalist exploitation.