SMEs vulnerable to ageism claims

Up to two-thirds of the 3.8m small to medium sized businesses (SME) in the UK could face age discrimination claims unless they review their working practices before new regulations come into effect in October 2006, according to insurance group, Axa.

The new Employment Equality (Age) regulations will bring age discrimination into line with laws on sex and race discrimination in employment and vocational training.

According to Axa's annual survey of SME managers, four out of 10 small business leaders are not aware of the new legislation and more than four out of 10 of the third of respondents that were aware, have not begun to take action or review their company practices.

Of those questioned, more than half of SME managers were concerned about the negative effect of increased employers' liability likely to be incurred with an older workforce, and almost a third were worried about having to fund longer pension plans.

And while nine out of 10 small business leaders believe investment in training and mentoring courses are important to overall success, nearly a quarter felt the cost and time they would need to invest in training older workers would have a negative effect on the profitability and productivity of their business.

AXA's Lou Macari said: "Older workers offer years of experience and can instil a greater sense of continuity in companies while younger workers tend to move between businesses and industries on a regular basis. However, considerations such as training, flexible working and increased expenditure on pensions, employers' liability and healthcare insurance, will always have a more noticeable impact on cash-conscious SMEs than big corporates.

"We urge SMEs to take time to audit their employment policies and review pension schemes, retirement policies and healthcare arrangements as part of their overall planning and strategy, so they are prepared well ahead of October 2006.

More information