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Preparing the Future For An Aging Workforce

Preparing the Future For An Aging WorkforceBetween 2010 and 2050, the number of people aged between 65 to 84 is expected to double and the number of people 85 and older is expected to quadruple which means australia’s workforce will age radically over the next few years. These statistics were a significant item on the 2014-15 Australian federal budget agenda which foreshadowed an increase to the aged pension from age 65 up to 67 by 2023, and to age 70 by 2035. While this does not seem like a significant jump, the addition of other factors will see the needs of the ageing workforce become top of many agendas. These other factors include the superannuation guarantee contributions proposed at 9.5% as at 1 July 2014 rising up to 12 % by 2019, and the inability to access superannuation benefits until age 55 which will be tiered up to age 60 over the next five years.

Paired with the increasing challenges faced by employers with respect to work health and safety, there will indeed be a few hurdles along the way.

HIGHER LIFE EXPECTANCY VS LOWER HEALTH EXPECTANCY
On 22 November 2013, the Australian Productivity Commission released a research paper entitled “An Ageing Australia: Preparing for the Future”1 which identified the effects of ageing on economic output and the resulting implications for government budgets, as supported by changes in the three P’s: Population, Participation and Productivity.

Of the many key points made in the Commission paper, the good news is, the mortality rate is lower and people are living longer. However, while death rates may have fallen, the ‘health expectancy’ of individuals who are currently between 50 to 60 years of age is in significant decline. As a result of this trend, there are currently more people in the workforce with some kind of physical or mental disability or limitation and this will continue to increase as the population ages. Given the expected changes in recruitment practices, mature aged workers will likely be concerned that they will be faced with age and disability discrimination and unemployment aggravated by financial pressures. The outlook is grim.

WORKPLACE HEALTH & SAFETY
What does this all mean for employers? Greater attention will need to be placed on health and safety at the workplace, particularly in light of the increased number of workers who are more vulnerable.

The objective of the various state and federal work health and safety legislation is to protect the health and safety of all workers. All workers are afforded the same protections and as such, the work health and safety legislation does not discriminate based on a worker’s age.

The primary focus of work health and safety legislation is the duty owed by a ‘person conducting a business or undertaking’ (PCBU). This duty is aimed at ensuring, so far as is reasonably practicable, the health and safety of workers engaged in work for the business or undertaking. As such, mature age workers will receive the same level of protection wherever they perform their work consistent with the protections provided to all workers.

DISCRIMINATION
Just as more attention is placed on how the ageing population will affect government policies and budgets, there is an emergent interest of how a mature aged workforce will influence employers’ decision making with respect to recruitment practices, particularly in labour-intensive industries that have higher risks to health and safety such as the building and construction, mining and petroleum and gas industries. As a consequence, the longevity and reduced costs associated with employing a younger worker may be given preference over the loyalty and experience of an older worker.

Are employers putting themselves at a greater risk of claims being made against them by older workers by hiring younger, less experienced workers due to growing concerns over, for example, a negligible risk of aggravating a pre-existing injury?

Conversely to the obligation to protect the health and safety of all workers, the various state and federal legislation also protects the business or undertaking from any allegations of discrimination based on age or disability. If an individual is not able to perform the inherent requirements of his or her position because of an attribute such as their age or a physical or mental disability, then it will not be unlawful to terminate the person’s employment or use this as a reason to not employ that person.

However, before any decisions are made, an employer must first consider whether or not reasonable adjustments could be made that would enable the person to perform the job, without causing the employer unjustifiable financial hardship.


“However, while death rates may have fallen, the ‘health expectancy’ of individuals who are currently between 50 to 60 years of age is in significant decline.”


INCENTIVES TO IMPROVE HEALTH EXPECTANCY
In reality, some employers will not have any option but to employ younger workers given the nature of certain industries and positions.

For those who have a choice, the hidden costs of employing mature employees may outweigh any additional incentives offered to employers, particularly if the health expectancy of the ageing workforce is in decline and the rising cost of health care increases.

The proposed Restart programme (another highlight of the 2014-15 federal budget to incentivise businesses) to employ workers over age 50 appears to be an afterthought by the government to overcome some of the pressures faced by policy makers. However it may give employers the ability to offer programs to employees to promote a healthy and safe workplace.

For those employers who want to maintain productivity and a loyal workforce, a proactive approach over the next 5 to 10 years should be taken to improve health expectancy of the ageing workforce. Employers may want to consider introducing incentives to promote a healthy lifestyle, such as:

  • provide flexible working arrangements (rostered days off/flexitime/job sharing)
  • assess functional capacities and physical job demands as soon as there is a change to technology, duties and equipment
  • make reasonable accommodations or adjustments
  • provide subsidised private health care or gym memberships
  • encourage innovation
  • offer reimbursement for courses
  • conduct regular risk/worksite assessments
  • provide access to an employee assistance program
  • offer addiction counselling (smoking cessation/weight loss).

Research suggests that creating a healthy culture in the workplace will increase employee productivity and promote long term health benefits and in turn, a safe workplace.

Profile

Melissa_Demarco

MELISSA DEMARCO
CBP Lawyers, Senior Associate

Melissa Demarco is a Senior Associate with CBP Lawyers in their Brisbane office. Melissa has extensive experience in advising large employers in highly unionised industries and has a record of delivering practical solutions in complex disputes. She has extensive experience advising employers on a variety of issues involving Work Health and Safety, discrimination and harassment, redundancy, performance management and workers’ compensation matters. In addition, she assists employers with issues arising from employment contracts, awards and industrial instruments and workplace policies.

Melissa can be contacted on email: mmd@cbp.com.au

Reference
1. Productivity Commission 2013, An Ageing Australia

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