Making better use of older workers

In March 2004, the European Commission issued a policy document looking at ways in which the EU and its Member States can improve the labour force participation rate of older workers. The aim is the help the EU to meet its target of a 50% participation rate for older workers by 2010.

On 3 March 2004, the European Commission issued a Communication (COM(2004)146 final) on Increasing the employment of older workers and delaying the exit from the labour market. The EU’s 'Lisbon strategy', agreed in March 2000 (EU0004241F) and supplemented at Stockholm in March 2001 (EU0104208F), sets a target of an average labour market participation rate of 50% by 2010 for workers aged between 55 and 64. It also aims to increase the average exit age from the labour market by five years by 2010. However, at present it would appear that the EU is in danger of falling short of these targets. The average employment rate for older workers is 40.1% and the average exit age increased by less than half a year between 2001 and 2002.

In this context, the policy of 'active ageing', whereby older workers are encouraged to remain in or rejoin the labour force, has been identified by the Commission as a priority area for the EU. In its latest Communication, it highlights early retirement as a 'short-term answer' to economic downturn and corporate restructuring. It believes that, in the longer term, early retirement entails a permanent loss of 'human capital' and growth potential, as it is difficult to reverse once the economy improves. The Commission also states that there is no evidence that older workers cannot make a full contribution to employment growth in expanding sectors. By contrast, it notes that employment growth for older workers exceeded that for other workers in most service sectors between 1998 and 2002.

The Communication sets out a number of key conditions for the employment of older workers, including:

• appropriate financial incentives;

• continuing access to training;

• good health and safety conditions at work;

• flexible forms of work organisation;

• effective labour market policies; and

• improved quality in work.

Although national government policies provide a framework for active ageing, the Commission states that the social partners have a particularly important role when considering aspects such as bringing pay into line with productivity and performance, work organisation, health and safety at work, lifelong learning, eliminating early retirement and putting into place age management schemes.

Margot Wallstrom, the acting commissioner for employment and social affairs, said: 'Europe’s older workers have much to offer, and we need to ensure that they are given the maximum support to remain in the labour market. Governments and social partners have their roles to play in ensuring that we maximise the potential of all our workers. The practice of using early retirement to restructure businesses must come to an end.'