Demographic pressure is not the only factor persuading smart companies to adopt age-diversity policies. By 2006 at the latest, the UK and other EC countries must introduce anti-age-discrimination laws alongside those on disability, race, gender, sexual orientation and religion.* Businesses that don't comply face prosecution.

The number of employment tribunal applications in the UK has trebled in the past 10 years and is anticipated to continue to rise. It is therefore important that employers ensure all employment decisions are transparent and taken for the right reasons.

Even before age legislation has been introduced, British companies are being challenged on age discrimination, particularly where there is an overlap between age and equal opportunity areas already protected. Potential legal redress is available via legislation covering unfair dismissal, sex discrimination and equal opportunities.

By ensuring that age employment policies and practices are fair and non-discriminatory employers will minimise the risk of high legal costs, damage to reputation and declining morale and motivation.

In addition to the business case, by 2006 there will be a legal imperative to remove 'age' from employment decision making.

The EFA recommends that employers review their polices for unjustified discriminatory age practices now, rather than waiting until it is legally required.

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Cost implications of age legislation

The impact on companies that fail to comply with age legislation could be significant. In the USA, where similar laws have existed for several years, a fifth of all discrimination claims in America are based on age.

Between 1988 and 1995, people claiming age discrimination were awarded an average of $219,000 compared to $147,799 for race discrimination and $106,728 for sex discrimination.**

Although age discrimination is not yet fully recognised in UK law, other discrimination-case awards give an indication of the levels of compensation that might be expected. The average award for disability and race cases is nearly £10,000, while sex equality cases average at more than £7,000. The average legal costs for defending a discrimination case amount to £5,000 per case, with approximately the same amount being paid by companies in management costs.

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