The Rising Cost of Age Discrimination: What Employers Need to Know
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Age discrimination in the workplace is an increasingly costly issue for employers, with compensation claims soaring in recent years.
The Growing Impact of Ageism in the Workplace
Recent figures indicate a sharp rise in compensation awards for age discrimination cases. Fox & Partners report that the average payout in 2022-23 soared by an astonishing 624%, reaching £103,000, compared to just £14,000 the previous year. High-profile cases, particularly those involving senior professionals, have contributed to this surge.
Consider the case of a senior executive at Vesuvius, a FTSE 250 engineering company. After being dismissed and labelled an “old fossil” by his employer, he was awarded £3.2 million for age discrimination. This case serves as a stark warning to businesses about the risks of failing to address age-related bias in the workplace.
The Legal Complexities of Age Discrimination
Age is a unique characteristic under UK employment law. While employers can, in some cases, justify retirement policies, such as promoting intergenerational fairness, they must prove that their actions are proportionate and serve a legitimate social policy objective. Dismissing an older employee under the guise of redundancy simply to replace them with someone younger could result in costly legal action.
In the UK, an increasing number of senior employees are questioning the fairness of their dismissals. Many suspect that their redundancy was merely a pretext for the company to replace them with younger workers, a practice that can expose employers to significant legal consequences.
How Employers Can Avoid Costly Claims
Instead of risking a tribunal and damaging their reputation, businesses should concentrate on fostering a workplace that values employees of all ages. Research indicates that multigenerational teams are more productive and innovative. Additionally, keeping experienced employees can lower recruitment costs and enhance overall workplace morale.
Here are some key steps employers can take:
Ensure succession planning policies are clear, fair, and non-discriminatory.
Train managers to recognise and prevent age bias.
Offer flexible working arrangements that suit employees of all ages.
Encourage knowledge-sharing and mentorship between different generations.
Future-Proofing Your Workforce
With an ageing population and five generations now working side by side, businesses must rethink their approach to workplace diversity. Expanding flexible work programmes beyond just parents of young children and supporting career progression for older employees will be essential for long-term success.
Call a specialist employment lawyer
Magara Law is an employment law firm with offices in Bicester, Banbury, Reading, and Paddington, London, and serves clients nationwide.
For more information or to contact our employment law team at Magara Law, call 01869 325 883 or email roy@magaralaw.co.uk.
