UK: An Age of Change – Age Discrimination Liabilities For Recruitment Agencies

The 1st October 2006 saw the introduction of what could be the most influential piece of legislation in 30 years. The Employment Equality (Age) Regulations 2006 ('the Age Regulations') provide protection to employees, applicants, contract and agency workers, partners and various other parties against discrimination, harassment and victimisation on the basis of actual or apparent age. The Age Regulations afford similar protection to that provided by the other discrimination laws, including uncapped financial damages.

There are a number of new themes running through the Age Regulations. We highlight three below as perhaps the most important for recruitment agencies to be aware of, before going on to describe how you can prepare for the introduction of these new rules.

One of the new themes running through the Age Regulations is the ability to 'objectively justify' discrimination on the basis of age. This allows employers to defend claims of age discrimination on the basis that the discrimination was a proportionate method of achieving a legitimate business purpose. How the Employment Tribunals in practice will interpret this remains to be seen, but what is certain is that a relatively high standard of "objective justification" will be required.

The Age Regulations also provide for a complicated set of rules regarding retirement, whereby it will be discriminatory to retire any employee before the age of 65 if this cannot be objectively justified. It will also be an unfair dismissal if an employee is dismissed at or above the age of 65 without a proscribed procedure having been followed. The procedure will require an employee to be given advanced notification of the intention to retire them, rights to request not to be retired, rights to meet and to appeal against any decision. What is notable from an employer's perspective is that provided it has a normal retirement age of 65 or above, and the fixed procedure is followed, it will be possible to avoid age discrimination and unfair dismissal claims, no matter how unreasonable the reasons for retiring that employee. Advanced planning and organisation will be key.

All employers, including recruitment agencies, will be covered by the Age Regulations. However, there are additional specific rules relating to "employment agencies" that are likely to apply to recruitment agencies. These make it unlawful for agencies to discriminate against jobseekers on the grounds of age:

(a) in the terms on which the agency offers to provide any of its services;

(b) by refusing or deliberately not providing any of its services; or

(c) in the way the agency provides any of its services.

This gives jobseekers a stand-alone right to bring a claim against an agency where they can show the agency has discriminated against them – for example, by turning them away or by not including them in their shortlisting of candidates for employers on the grounds of age.

The Age Regulations create a double jeopardy for recruitment agencies. Not only can agencies be the subject of claims on their own account, they will also be held liable for damages if they discriminate on the instructions of a client. For example, if a secretarial recruitment company was asked by a client to provide an older secretary for the purposes of providing gravitas to a secretarial pool made up of younger secretaries, this would almost certainly be considered discriminatory. Equally, a request for a younger secretary who might be more malleable to the ways of an organisation or who might suit the image of the particular client would also, almost certainly, be discriminatory.

The only way in which an agency can avoid liability where it has acted on a client’s discriminatory instructions is to show that (a) it acted in reliance on a statement made by its client to the effect that the client was lawfully entitled to refuse employment on an ostensibly discriminatory basis; and (b) it was reasonable for the agency to rely on that statement. The Employment Tribunal will decide what is 'reasonable' in these circumstances. It is likely to apply a relatively stringent test which may involve agencies having to test the reasons given by a client – something that may be difficult in practice. It is also worth noting that this defence only applies to offers of employment or engagement, not the terms that are offered.

It is likely that recruitment agencies will also experience additional interference from their clients in the way they operate their businesses as clients will now be strictly liable for any acts of discrimination by the agencies that they use. A practical consequence of this is that they are likely to seek to shift some of the burden for compliance onto the agency. This is likely to manifest itself in two obvious ways:

(1) they will seek to look at the policies that agencies have in force to prevent discrimination, i.e. equal opportunities, retirement, and redundancy policies.

(2) they may now seek contractual provisions in their terms of business with agencies that will prohibit absolutely any discrimination by the agency in the selection of candidates. The purpose of this will be to enable clients to seek recompense from their recruitment agencies in the event that a candidate sues them.

In many businesses, age discrimination is commonplace and therefore, the biggest hurdle may be to affect a culture change whereby age discrimination becomes unacceptable. This cannot happen overnight but by making some of the changes below, a business can take practical steps to limit short-term risk, and facilitate a change in new culture over time.

Businesses should, preferably with legal advice, look at the following areas:

• Advertisements - Agencies should check the recruitment literature that they use for themselves and for clients. Check the terms of job advertisements, job descriptions and person specifications, specifically for language that could be construed as age-related. For example, avoid specifying a minimum or maximum length of experience where this cannot be argued as strictly necessary.
• Pictures - Consider whether any pictures/images used in your literature create an image that would exclude or alienate certain age groups.
• Client/Agency Instructions - Check written communications to ensure that they do not convey discriminatory instructions. Agencies who receive instructions from a client employer that could be discriminatory should obtain the client’s justification for the instruction in writing and follow up with further questions if the explanation is not compelling.
• Qualifications - Check if qualifications specified in job adverts or person specifications disadvantage any particular age group and, if so, consider alternative ways of asking for experience.
• Application forms - Requests for dates of birth or age should be removed from the application form and included in separate equality/diversity monitoring forms. Requesting details of education or employment may lead to assumptions based on age so their necessity should be considered.
• Photos - Does the business or agency require photos with completed applications forms? If so, consider what purpose these serve and whether their use is objectively justifiable.
• Interviews - Is there any written guidance for interviewers or interview panels? If so, check that guidance in relation to age-related issues. If not, consider preparing guidance and giving training to ensure age discrimination compliance.

• Retirement clauses – Check whether there is a contractual normal retirement age of 65 and if not, think about changing it to 65.
• Benefits – Check whether qualification for benefits is based on length of service. If so, see if the business can take advantage of the various exemptions that might apply.
• Bonus schemes and share schemes - Check whether any scheme differentiates between "good leavers" and "bad leavers" and whether retirement age is used as a "good leaver" criterion. This is likely to be discriminatory.
• Retirement policy – Any existing retirement policy will need updating to include the new retirement obligations on employers.
• Redundancy policy – Any reference to age or length of service as a criteria for selection for redundancy should generally be avoided.
• Equal opportunities and diversity policies – these policies, including any anti-harassment or bullying policy, must be amended to prohibit discrimination, harassment or bullying on the grounds of age.

• Training - employers should give up-to-date training to managers on equal opportunities with a specific focus on age related issues.