Reforms needed to keep mature age employees at work
December 3 2003 - Professor John McCallum
and Jeanine Parsons from the College of Social and Health Sciences at the University
of Western Sydney believe that governments and employers need to reform the workplace in
order to stop older workers from making an early exit.
"Research coming out of the European Community shows that about one third of workers aged
55 are leaving work before retirement age because of the disadvantages they experience,"
says Professor McCallum.
"Older workers still have a wealth of experience and knowledge to offer
organisations. By introducing changes such as older worker health insurance, better
occupational health and safety practices and increasing the awareness of age
discrimination legislation, employers and governments can provide better conditions
for older staff and increase their ‘work ability’.
"Programs to help older workers re-enter the workforce and more flexible
working conditions can also help motivate older people to stay in the job longer."
John McCallum says the increasing number of older workers opting for early
retirement will put added pressure on our social services.
"We've known for sometime that workforce participation rates for older
ages are declining, but what is of real concern now is the growing trend to early
retirement," he says.
"In 1997, 77 percent of men and 87 percent of women retired from full-time
work during the five years prior to them becoming eligible for the age pension. The
attraction of a superannuation lump sum is also proving irresistible to older workers,
with retirement rates increasing dramatically at the superannuation preservation age of
55 years.
"The result is lost taxation revenue that early retirees otherwise would
have contributed. And with older Australians now expected to live twenty years past their
retirement age, it places extra strain on social services in terms of pension outlays and
health and aged care costs.
"Governments should be looking to gradually increase the pension age for
women so that it is the same as for men, and gradually increase the superannuation
preservation age to 60 in order to ease the pressure on the social security system."
He also believes in the need for employers to change their
attitudes to the older workforce.
"Many older workers have been caught up in restructures and as a result
have been retrenched and forced into early retirement. This is remarkable since research
indicates that three out of five employees who face management-initiated retirements
would like to keep working," he says.
"Mature age workers who remain relatively handicap free are more than
capable of advising, consulting and managing in the workplace. And technological support
and work practices can be employed to a greater extent where mature aged employees
continue to work in direct labour."
John McCallum also says that we can look to Japan for advice on how to
keep older workers in the workforce.
"The Japanese have a high regard for the knowledge and experience of
older workers. They've implemented a system of age-related job change called 'Tienen',
which allows workers to change from senior positions so they don't have to completely
stop work," he says.
"They also have Silver Human Resource Centres, where older workers make
the transition from a corporate role to community-centred work. These centres have proved
to be very popular and help keep older Japanese active both mentally and physically.
"If we are to lift the current participation rate of workers aged 55-64
years from 49 percent to 59-63 percent as Prime Minister Howard has indicated, it's going
to take serious reforms at the worker, employer and government level. Only then will the
community have the capacity to finance Australia's ageing population."
Professor McCallum's and Ms Parsons' paper, 'Older Workers in an Ageing Society: The case
for legal and policy reform', appears in the Australian Law Reform Commission's Reform,
Issue 81, Spring 2002.
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