Australia’s population is ageing and, as it does, the proportion of our workforce aged in their 50s, 60s, and 70s will continue to rise. For many of these older Australians, remaining in the workforce is not a choice – it’s a necessity flowing from the loss of savings during the GFC and unrelenting increases to the cost of living.
As more and more older Australians remain in the workforce, more and more employers find themselves facing difficult conversations about performance, reliability, and capacity. And many employers aren’t dealing with these conversations very well!
In the worst case scenario, they attempt to enforce ‘mandatory retirement’ when employees reach a specific age (usually 65), despite the fact Australia abolished compulsory retirement years ago. This results in some mild embarrassment at best, and legal action at worst. So this month we take a look at the key things you need to know when it comes to older workers.
- No Compulsory Retirement Age
As already noted, Australia no longer has a general, compulsory retirement age. While workers are required to reach certain specific ages before becoming entitled to publically-funded pensions and other benefits, these age-related restrictions do not equate to a ‘compulsory retirement age’.
This means there is, in effect, no maximum age for employment – if an employee can do the job and wants to remain in employment – they usually have the legal right to do so.
- Legal Risks of Forcing Retirement
Forcing an employee to retire because of their age is, quite simply, against the law. Not only would such conduct amount to age-based discrimination, it would also qualify as an ‘unfair dismissal’ under the Fair Work Act 2009. A dismissed employee would accordingly have the right to lodge a claim against their former employer, and seek an order from the Fair Work Commission (FWC) for their reinstatement.
Even passively ‘encouraging’ an employee to give up their job could amount to ‘constructive dismissal’, exposing the employer to expensive, time-consuming – and rather embarrassing – litigation.
- Capacity and Disability
Ultimately, an employee is legally-entitled to continue working for as long as he or she is able to fulfil the ‘inherent requirements’ of their job. This means that if, as a result of the natural consequences of ageing, an employee is no longer able to safely and competently perform the key requirements of the role, their employer may be able to consider dismissal.
However, if the employee has an age-related condition that qualifies as a ‘disability’, the employer is required to make ‘reasonable adjustments’ if these will allow the employee to continue performing the inherent requirements of their role.
For example, imagine you run a hospital and have a registered nurse on staff aged in his early 70s. You’ve recently begun receiving complaints from both nurses and patients about his conduct. Apparently he is no longer able to safely move patients and, recently, he gave the wrong pills to a patient because he couldn’t read the printed label. Do you have grounds to dismiss this employee?
The answer here would depend on:
- a) whether mobility and the ability to read medication labels are ‘inherent requirements’ of the role (we’d suggest they are), and
- b) whether you’re able to make any ‘reasonable adjustments’ to accommodate this employee’s disabilities (which appears unlikely in these circumstances).
Accordingly, you would be in a position to initiate the dismissal process, subject to further consultation with the employee. You could, of course, also consider redeploying this employee into another available position.
Of course, in the real world situations are often far more complex than the facts set out in this example. This means every case involves a careful consideration of ‘inherent requirements’, ‘reasonable adjustments’, and ‘disabilities’.
- Difficult Conversations
As the above example demonstrates, employers will become increasingly required to engage in ‘difficult conversations’ in the years – and perhaps decades – ahead. However, if these conversations are handled sensitively and professionally, they can be the catalyst for positive change in your business. Here are some hints that will come in handy:
- Pick the right time for the discussion. Don’t hastily convene a meeting just after your employee has made a mistake or a complaint has been received. Make sure you choose a time when neither of you will be interrupted, and both of you can speak freely without being observed or overheard.
- Know your rights and responsibilities. As noted at the outset, it can be rather embarrassing to be told all about your legal responsibilities by the employee him or herself! So be sure to obtain expert advice before meeting with the employee.
- This is absolutely critical, because if you focus too much on what you have to say, you may miss important information your employee is trying to share with you. Based on our experience with these discussions, most older employers have already given careful thought to their retirement before they’re asked to meet with the boss. In fact, in a number of cases, the employee has been patiently waiting for their boss to arrange the meeting so that they can announce their retirement plans.
- Consider options. Retirement or the status quo aren’t the only two options available. Partial retirement, part-time employment, flexible working arrangements, and many other alternatives can also be considered (subject to the employee’s consent). In fact, an employees who has been employed by you for more than 12 months and who is aged 55 or over has a legal right to request flexible working arrangements, at any time, under the National Employment Standards (NES).
- End the meeting with a clear plan. Make sure both of you know what will happen next, and when it will happen. This will help prevent genuine misunderstandings – and possible disputes – down the track.
- Document everything. It’s absolutely essential to follow-up the meeting with a letter which clearly confirms what was discussed and agreed.
- Final Thoughts on Our Ageing Workforce
While the ageing workforce creates some obvious challenges, it also creates some incredible opportunities for you and your business.
Older workers have a lifetime of experience under their belts, they have often built strong relationships with clients and commercial partners over many years, they are generally more settled than other employees, and they are usually your most emotionally mature and astute workers.
These are all highly sought after personal traits…meaning your ideal employee might just already be working for you!
Workforce Guardian HR experts are available via email, phone or face-to-face (depending on your needs and location) to help you with the expert HR consulting and employment relations assistance you need. For more information and advice, click here.
FREE HR HEALTH CHECK FOR KEY ADVISORS
Under section 550 of the Fair Work Act 2009, key business advisors such as accountants and bookkeepers can be held personally liable as an ‘accessory’ for their clients’ breaches of Australian employment law. Workforce Guardian’s FREE Fair Work Liability Check will confirm whether you’re exposed to potential penalties of up to $54,000 for each of your own and your clients’ breaches of Australian employment law. If you answer no/unsure to any of these questions, you should take urgent action to reduce your risk of accessorial and personal liability.