It is no secret that the composition of Australia’s population is much older today than it has been in the past, and both the number and proportion of older people is growing steadily. In 2014, the number of people aged 65 and over was 3.4 million, a three-folder increase on the decade prior. This trend is expected to continue, particularly as the “baby boomer generation” ages. Based on population projections by the Australian Bureau of Statistics, by 2064 there will be 9.6 million aged 65 and over, and 1.9 million aged 85 and over. Against this demographic background and the increase in sophisticated technologies, the government has made it a financial imperative to lift employment participation rates and boost productivity including by offering incentives to employers who employ older people. The only problem is that the definition of an older worker seems to be getting younger, as employers tend to implement cost cutting measures by shedding older workers through redundancy and other change management programs.
The issue of age discrimination according to the Federal Government Willing to Work Inquiry in 2015 noted that Australian companies are less likely to employ or promote older workers due to false perceptions that they are resistant to change and “won’t fit in”. This finding, as warns the then Age and Disability Discrimination Commissioner, The Honourable Susan Ryan AO, is a huge problem facing Australia. Many employers who still harbour deep prejudices that older workers are less productive and refuse to learn new systems, especially IT systems, can expect to face claims of age discrimination.
Not only does the issue of age discrimination create a very real risk for employers but it is also creates a wider social crisis. Older Australians who are unable to work are now facing real risks of poverty, lack of housing and suicide.
The Legal Landscape
From a purely legal perspective, discrimination on the basis of age in employment is prohibited under several pieces of State and Federal legislation and in particular the Age Discrimination Act 2004 (Cth) (“the ADA”). In this regard, the ADA broadly provides that an employer must not discriminate against a person on the grounds of age in the following circumstances:
(a) in the arrangements made for the purpose of determining who should be offered employment; or
(b) in determining who should be offered employment; or
(c) in the terms or conditions on which employment is offered; or
(d) in determining whether the employee can access opportunities for promotion, transfer or training, or for any other benefits associated with employment;
(e) by dismissing the employee; or
(f) by subjecting the employee to any other detriment.
However, there is an exemption to discrimination on the basis of age where the employee would be unable to carry out the inherent requirements of their employment because of his or her age. In determining whether it is lawful then to treat a person less favourably based on age, in circumstances where such treatment would otherwise be unlawful, the following factors apply:
(a) the person’s past training, qualifications and experience relevant to the particular employment; and
(b) the person’s performance as an employee;
(c) the person’s actual ability to perform the inherent requirements of the role (rather than the perceived ability) and
(d) all other relevant factors that may be reasonable to take into account.
In addition, the Fair Work Act 2009 (Cth) (“FW Act”) provides that an employer must not take adverse action against an employee or prospective employee because of their age (or any other protected attribute, such as race, sex, disability). Adverse action includes such things as dismissing an employee, altering an employee’s position to
their detriment or refusing to employ or promote a prospective employee.
A recent survey known as the National Prevalence Survey (2015) (“the Survey”) found that age discrimination is becoming more rampant in Australian workplaces and therefore it is more likely Courts and Industrial Tribunals will be tasked to deal with such complaints. In summary, the Survey concluded:
- 58% of those who looked for paid work reported they were a target of discrimination because of their age compared to 28% of those who worked for a wage or salary, and 26% who were self-employed;
- 41% of those on an income of $35,000 or less reported that they experienced some form of discrimination, compared to 20% of those earning more than $150,000;
- 32% who had participated in the workforce in the last two years, reported that they were aware of other workers aged 50 years or older experiencing age discrimination, and of those 10% believed that it occurred all the time, and 46% said that it occurred frequently;
- 33% of managers aged 50 years and over reported that they took an employee’s age into consideration when making decisions, while 34% of managers had experienced age discrimination themselves.
A Stern Warning to Employers
In light of these findings, there have already, unsurprisingly, been significant decisions dealing with the issue of age discrimination handed down by Australian judicial bodies. Most notably, the Federal Circuit Court in Fair Work Ombudsman v Theravanish Investments Pty Ltd & Ors [2014] FCCA 1170 involved proceedings commenced by the Fair Work Ombudsman against the employer (and company directors individually) of Mr Cheng Peng Lee, who was told his employment would be terminated on his 65th birthday. In this case, the restaurant operators wrote to Mr Lee stating that company policy was not to employ staff who attain retirement age, which in the employee’s case was 65 years. The employee responded by pointing out that the threatened termination of his employment was irrefutably an act of age discrimination and lodged a complaint with the Fair Work Ombudsman. As a result of a consequential investigation and prosecution by the Fair Work Ombudsman, the company was fined a total of $29,150 for contraventions of the ADA. In addition, the joint directors of the company were penalised a further $4,180 each and were ordered to pay the employee $10,000 in compensation. In his decision, Justice Burnett observed that:
“Discriminating against workers because of their age can have a terrible impact on their self-respect and dignity and deprive them of an equal opportunity to make a positive economic benefit to the company and the wider community.”
Benefits of Employing Mature Age Workers
Contrary to public perceptions that mature-aged workers’ are less productive and unlikely to respond positively to change, the Federal Governments Willing to Work Inquiry reported that businesses and employers benefit from promoting human rights and preventing discrimination within their organisations. Proven benefits include access to a larger talent pool, increased productivity, improved job satisfaction and customer engagement, higher rates of retention of talent, and avoiding costs (including reputational) associated with complaints of discrimination. Further, the report highlights that many businesses and employers with good practice examples and leading strategies to facilitate and promote the participation of older workers benefited from having diverse workplaces.
In addition, in recognition of the important role and experience mature age workers bring to the workplace, the Australian Federal Government has introduced the “Restart Wage Program”, a wage subsidy payment of up to $10,000 (GST inclusive) if an employer employs a mature age job-seeker for 12 months or more. To receive this financial assistance, an employer will need to employ an active mature age job-seeker who satisfies the following criteria:
- is 50 years of age or older;
- has been on income support for six months or more; and
- is registered with a jobactive or Disability Employment Services or Community Development Programme provider.
Tips for Employers
Employers have a legal responsibility to take all reasonable steps to prevent age discrimination. Such steps may include implementing workplace training and putting in place policies and procedures to create a discrimination-free working environment. Employers should also consider gathering information to help better understand the composition of their workforce and should promote age diversity within teams to encourage a variety of perspectives, experiences and skills.
If you wish to discuss any aspect of this article or require specialist advice or assistance in relation to an employment or industrial law issue, please do not hesitate to contact us.
This alert is not intended to constitute, and should not be treated as, legal advice.