Westminster “needs to be clearer” that prejudice, unconscious bias and casual ageism in the workplace are all unlawful under the Equality Act 2010, the women and equalities committee said.
Committee chair Maria Miller said the scale and lack of enforcement uncovered by its inquiry was “both alarming and totally unacceptable”.
Entitled Older People And Employment, the report concluded the employer-led nature of the government’s approach was “unlikely to present an adequate challenge to discriminatory practices or attitudes”.
The committee said it wanted to see recruitment agencies “accept greater responsibility, collecting data on where older workers are being excluded and developing a plan of action to remove discrimination from the recruitment process”.
It recommended the reporting of the age profile of workforces following the introduction of gender pay gap reporting to challenge discrimination.
Organisations which support older people said that the picture was reflected north of the Border, where Age Scotland warned that the “overwhelming majority” of companies do not have an age strategy and said older workers faced “unfair bias”.
The report noted: “It is unacceptable that the nation is wasting the talents of more than one million people aged over 50 who are out of work but would be willing to work if the right opportunity arose.
“People in later life are often playing many different roles in society, but those who wish to work should not face the current barriers of discrimination, bias and outdated employment practices.”
It added: “Too little is being done to enforce the law. Neither the government or the Equality and Human Rights Commission (EHRC), with its considerable enforcement powers, are intervening in the recruitment sector where so much of the evidence demonstrates unlawful ways of working.
“The public sector struggles to retain older workers when it should be leading the way, but the EHRC is not investigating whether the public sector equality duty is being met. We want it to do so.”
The report called on the government to work with the EHRC to agree specific enforcement actions.
Delia Henry, Age Scotland’s charity director, said: “This report is eye opening but sadly its conclusions are unsurprising. The overwhelming majority of businesses and employers in Scotland do not have an age strategy and as such will struggle to get the best out of the workforce. Older workers add tremendous value to the workplace but are too often faced with unfair bias and less opportunity as they get older. This must change.
“Age Scotland has been working with employers to make sure their organisations are age inclusive by focussing on their workplace policies, training, bias and engagement.
She added: “With an increasingly ageing population and more older workers saying that they are planning on working into their late 60s and beyond, it is vital that governments and employers get a firmer grip on this and make the most of a diverse and talented workforce of all ages.”
Charity Business in the Community last year warned that those over 50 are not receiving the computer training and skills development they need to succeed in the digital era, leaving them without the skills needed to continue working until retirement age.
Mrs Miller said: “Age discrimination in the workplace is a serious problem, yet despite it being unlawful for more than a decade, the scale and lack of enforcement uncovered by our inquiry is both alarming and totally unacceptable.
“The government and the EHRC have failed to get to grips with this.”
Dr Brian Beach, senior research fellow at the International Longevity Centre, called on companies to realise that all older people are not the same. He said: “Tackling ageism in the labour market and promoting age-friendly employment standards are vital steps to ensure that older people have the opportunities they want to work in later life. We support the committee’s call for stronger, clearer action by government and EHRC to address this issue.”